Guide to Building a Successful Supplement Company
If you are someone who appreciates the benefits of supplements and have an interest in creating your own product, this guide contains essential information to help you get started. As someone who may appreciate the benefits of supplements and/or someone who has a background in the sciences, wellness or business, launching a supplements business may help you achieve an overall larger purpose of improving the health and wellness of others.
Several new supplement companies have been started in recent years, as the attention to personal wellness is growing rapidly. The Health & Wellness Food market is on track to hit $811 billion by 2021 and the Dietary Supplement market is forecasted to be worth over $278 billion by 2024.
For every new consumer-based products company, entrepreneurs need to identify the target audience, develop a customer acquisition model, and assess the competitive landscape before they can begin selling their product or service. Between distribution, marketing, financial planning, and legal matters, these are a few key steps to establishing a successful supplement company.
Initiate the Formulation Process
- Highlight the main features about your supplement that you want to advertise first and then work backward
- What are the key ingredients, and do they have clinical backing?
- How will the ingredients help your target audience be better?
- What makes your product better than other products in the market?
- What is your supplements’ competitive advantage over other supplements?
- Collaborate with a qualified manufacturer that can provide expertise in supplement production
- Developing trend-setting formulas can be a differentiator, yet your manufacturer will be key in determining the needs to make sure the product is repeatable and scalable.
- Borrow good ideas from your competitors, but don’t go overboard
- Paying attention to the competition is beneficial, yet copying and focusing mainly on the competition is a way to fall behind the trends rather than develop the trends.
- Identify a unique way to cater to your audience that your competitors are not doing
- Trust is a key factor that many brands struggle to develop and keep. Developing a tie to your consumer base is a way to keep them coming back.
Working with a manufacturer during this step can be a great resource for later on in your development. Use this time to build a relationship with them as there are manufacturers out there that provide services from formulation to the finished product.
Get Product Liability Insurance
While it may not be as exciting as some of the other items on this list, getting product liability insurance should not be forgotten. Most businesses have weathered through some tough storms, and those that come out on top have committed to protecting the downside as well. Product liability insurance will protect you against claims for personal injury or property damage caused by a product your company designed, sold, or supplied. When you’re in the chain of distribution, your chances of a lawsuit increase significantly. This shouldn’t deter you from working with other organizations because product liability insurance secures the longevity of your company by turning a lawsuit to a minor blip rather than a disastrous event to your business.
Find the Right Manufacturer
Notice how we said the “right” manufacturer instead of the largest. This is because the largest manufacturer may not be the right one for your business. More often than not, finding the right match becomes an intimidating task as many entrepreneurs find themselves spending a lot of time talking to a large number of manufacturers. But, don’t get overwhelmed because we have several tips to help you evaluate your options:
- Ask them questions, especially about the supplement industry. Get as much information you need to make a decision
- Are they the right size for you? Ask about their Minimum Order Quantities (MOQ)
- Choose a U.S. based manufacturer. They will have a stronger understanding of the U.S. regulatory standards
- Inquire about other services they can provide as some can offer testing, packaging, labeling, and quality control and assurance
- Be cautious of manufacturers that boast about their accolades as many industry awards are pay-to-play
- Plan a launch timeline and get an idea for a realistic amount of time to produce your product
Finalize Your Supplement Marketing Plans
At this point, you understand what your target audience is looking for in a product, who the key players are in your market, and how you will produce and distribute your supplements. You’re so close to being ready to sell, but you still need a plan to market your product. You cannot go into this blindly. Because of the rise of e-commerce and social media, it is has become even more crucial to deliver the right message to the right person at the right time. So, how do you do that? Well, it’s a lot easier than you think:
- Be Customer-Centric
- Determine the pros & cons of selling online versus in retail
- Utilize social media (Almost 80% of Americans use some form of social media)
- Be innovative and versatile with your advertising
- Leverage your fans and influencers (80% of your sales come from 20% of your customers)
- Collaborate for cross-promotional opportunities
- Reach out to influencers and offer them complimentary samples
Everything is finally falling into place, which means you are now ready to sell. And, based on your previous work before this point, you already know how you’re going to do it. The work doesn’t end here, this is the perfect opportunity to:
- Create a pricing structure that effectively works for your company
- Keep an eye out for future business opportunities (partnering with gyms, engaging with doctors, selling your product online if you are not already)
You Did It!
Did you complete everything above? If so, congratulations! You have finalized your formulation process, prepared for any bumps by obtaining product liability insurance, partnered with a manufacturer who is the perfect fit for your business, created a marketing strategy for a successful roll out, and finally begun selling your product. We know it wasn’t easy, but with your passion, drive, and belief in your product, you will easily start to generate sales in no time. You have a great foundation to get your business going, and we wish you the best of luck on your journey!