7 Smart Choices: Start a Supplement / Natural Product Business

You’ve made the biggest decision already – choosing to start a supplement or natural product brand.  But what’s next?

There are many decisions needed to determine your success. With limited time and resources, you want to make smart choices.  Use our checklist to make decisions that will transform your dream into a money-making reality.

1. Choose a Problem-Solving Product

The best products safely solve a consumer problem.  For instance, people seeking gastrointestinal improvement will reach for probiotic yogurt.  Vegans struggling to get enough vitamins B12 and D will select fortified foods or supplements offering these vitamins.  But how can you find new product money-making ideas?

Do your research.  The internet makes it easy to discover health and nutrition trends that can be monetized.  For instance, capitalize on the HerbalGram Herb Market Report that states U.S. herbal supplement sales grew 8.5% in 2017 to over $8 billion.  This market has grown every year since 2004.  Why not be the next success story?

Or want to help people lose weight?  Create a supplement with capsaicin. Want to help pregnant women fight morning sickness?  Try mint.

Also turmeric-based supplements and functional foods show new promise due to breakthroughs in bioavailability.   Studies have shown turmeric supports a healthy inflammation response.   A tumeric supplement that helps people suffering from inflammation has potential consumers searching for solutions.

Additionally, seek niche markets to find less competition and eager buyers.    Get creative when selecting niches.  Senior mountain bikers want energy, college students want more sleep, parents want clean-label functional foods.  There are millions of other niches with potential customers wishing for your solution.  Go out and wow them.

Formulate carefully and knowledgeably.  The best products are effective – and also safe.  Your name will be on the label, so it’s ultimately your job to ensure that the product you launch and sell delivers as promised and does no harm.

2.Find Your Natural Product Tribe

After choosing a product define your ideal customer so you can market to them, and not waste money.  Narrow ideal customer profiles by asking:

• Who are your ideal customers?

• Which characteristics do they share?

Conduct market research to verify your ideas and narrow down ideal customer traits, like gender, age and socioeconomic status.  Also verify potential customer’s wants and needs and their shopping habits.  For instance if consumers prefer online buying focus on that.

Next study your competition.  What are they doing right?  How might your product address their wrongs?  How does their product look? What about price? How does your competition use advertising?  What can you do better?

Another idea to find customers is to consult a knowledgeable expert in your niche.  Experts like to share their opinions and might even be willing to mentor a newbie.

3. Select a Trustworthy Manufacturer

Once you’ve chosen a promising product don’t disappointed customers with unfilled orders or low quality products.  To avoid this carefully consider your product requirements and then balance them with manufacturer location, cost and reputation.

Does it add value to your product to use a stateside manufacturer or should you look abroad?  US manufacturers may contract out services to other companies, so be sure to request location information for all players.  Also, what is your price-point?  Offshore manufacturers offer inexpensive prices but longer lead and shipping times, and you cannot easily audit their operation.

After narrowing down your manufacturer list, ask about ingredient sourcing, how suppliers and ingredients are qualified, quality control, laboratory analyses and distribution programs.  Ask for current regulatory compliance certifications establishing that the manufacturer complies with Current Good Marketing Practices (cGMP’s).  Also ask for references and whether the manufacturer has received any of the 483 FDA Inspection reports.  Search online for FDA Warning Letters, customer reviews and potential complaints.  Lastly, hire a qualified auditor to completely check out the operation completely.  This up front effort will bring you peace of mind and save you money and angst in the long run.  It’s priceless to know that you are entering into a relationship with an experienced manufacturer possessing a stellar operation – and equally important, you fulfill your cGMP responsibility by qualifying your manufacturer.  In addition to a supply contract, you and your manufacturer will need a Quality Agreement.  The Quality Agreement spells out which party is responsible for fulfilling the many cGMP requirements; these must be divided between the parties – under U.S. regulations, you cannot delegate every responsibility to your manufacturer.  See item 5 below – Check-off Legal Obligations.

 

4. Create a Fiery Sales and Marketing Plan

Drive sales with sizzling product design and labels.  Brainstorm ideas and then consider hiring a designer who knows your market and a regulatory compliance expert who understands your product, the claims you can and/or must make about it, and how that information must be presented.  Pros can maximize buyer attention and avoid negative surprises, such as FDA non-compliance actions.

Next decide which marketing tools will work best for your product.  Basic strategies include direct sales, media buying, blogging, pay-per-click, and in-person sales.  Do you want to focus on one strategy, such as online sales, or use a combination for best results?  Also create marketing channels through your website and social media presence.

Also, do you have an interesting product story?  Customers buy products based on emotion, so utilize your story to drive sales.  Clif Bars were conceptualized on a 175-mile bike ride when the creator realized “other” bars weren’t appetizing and felt he could do better. The company doesn’t disclose revenue but estimates are $500 million to $1 billion annually.

Maybe you’re a mom of a diabetic child so you create sugarless, kid-friendly functional foods.  Meaningful product stories boost sales by giving people a reason to buy.

Also consider other marketing options.  Start a niche newsletter with updates and information valuable to your customers, offer time-sensitive coupons for return visitors, create a loyalty or referral program, cross sell and upsell.

5. Check-off Legal Obligations

Don’t be surprised by a legal problem after you start selling – get out in front of these issues.  New businesses have legal obligations that vary depending depending on business structure and location, as well as product identity – so consult a business attorney and a regulatory compliance expert prior to entering into a manufacturing supply contract and Quality Agreement to protect yourself.

You’ll need to choose a business structure, register your company name, obtain business licenses and an Employer Identification Number (EIN) from the IRS for tax purposes.   Consult the US Small Business Administration website for tax requirements based on business structure and location.

You may also need business permits and licenses, and trademark advice.  Finally business laws and regulations vary by industry so make sure you understand which are specific to your business.

6. Make Your Supplement or Functional Food and Create a Distribution Plan

Finally it’s time to give the green light to the manufacturer you’ve selected.  Make sure you know of any possible delays in advance so you can plan accordingly.  For instance, Chinese manufacturers close for two weeks during Chinese New Year and this may cause delays of up to one month.  Many ingredients are produced in limited quantity, and planning for supply chain continuity is critical to your success.

Ask about discounts for larger qualities, multiple products and repeat orders.  Communicate clearly and often with your manufacturer to ensure your product is progressing per your expectations.

When your product is ready, both you and your contract manufacturer must subject it to quality control testing to ensure it is safe, pure and meets all label claims for identity, potency and quantity.  Your designated Quality Control expert must inspect the product and the test results against your Product Specification and verify that the product meets all of your standards before releasing it for sale.

Your manufacturer may provide distribution options, such as drop-shipping, or you can arrange your own product distribution.  To create optimal distribution channels, focus on customer needs.  If your customers buy online create an e-commerce website and fulfillment system for direct sales.  For additional sales consider selling to other online resellers or distributors.

Other channels include value added resellers, who add value to your product and then resell it.  For instance a fitness studio might bundle your supplement with functional foods and a gym membership to create a complete weight loss solution.

Additionally, you may choose to utilize catalogues, sales teams, consultants and retail outlets for sales.  You will need to experiment to discover the distribution channel(s) that best grow your market share and revenue.

7. Sell, Sell, Sell

Congratulations, you’ve done the work to successfully sell supplements or functional foods.  You established a legal business, found a promising supplement or functional food,  chose a manufacturer, specified what you want the manufacturer to make, created a label, set up marketing and distribution and verified the quality of the product.  Finally, it’s time to start selling!

Take your website and social media pages live and start your marketing channels (but be aware that everything you or an agent that you control claims about your product is subject to regulation and must be truthful – and you have to substantiate all efficacy claims).  Have your regulatory consultant monitor the claims while you sit back and enjoy watching customers discover your product.  As sales build, evaluate the success of marketing and tweak campaigns as needed.

Entering the supplement and functional food industry takes time and effort.  It’s not easy but making smart decisions will help your business dream come true and drive product success.

 

Kendeyl Johansen, a tech geek and award-winning journalist, creates multimedia health and wellbeing content.

 

Susan Ulery utilizes her legal background plus 20 years of manufacturing expertise in the dietary supplement industry to help clients overcome regulatory challenges.

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