Has it ever crossed your mind to start a supplement company? If you are from the fitness industry or are a fitness freak yourself, you will know the importance of supplements in bodybuilding. You can make the business a fruitful one if you have some great business sense and if you have good knowledge about fitness products.
The supplement industry is expected to be one of the lucrative businesses of 2018 and may incur yearly revenue of over 60 billion dollars by 2021. You can start a supplement business quite easily and cost-effectively. However, a lot of effort has to be put in to develop your own formula, work with manufacturers, outsource label and bottle creations, and build a sustainable brand.
If you don’t know where exactly you are coming from and what exactly you want to sell, you can end up being kicked out from the market soon enough. In this article, we will bring all of the aspects of a supplement business together and help you accomplish your goals.
How to Start a Supplement Company in Steps
Step 1: Measure Your Success – Define Your Product Line
You can create a successful supplement company if you:
- You are respected in the industry
- You inspire your competitors and customers
- If your products produce great results for your buyers
- If major retailers and distributors carry your products
Before you make a business plan, you will have to decide the type of supplements you want to produce and sell. Although there are a variety of options, not all have great profitability. It is quite easy to copy popular brands that are on the market.
You have to select products that have market value and have good nutritional goodness. Your brand should be able to differentiate itself from other supplement lines that have generic ingredients, such as whey protein, multi-vitamin, glutamine, creatine, and amino acids.
However, make sure your products address the general issues people face, including muscle mass gain, weight loss, boost stamina and memory, or deal with specific nutritional deficiencies.
The tip is you have to decide on a cutting-edge, unique product on one side and produce the common supplement line simultaneously. So when the customers who come to buy your unique product should not have to look elsewhere for other products that add to their supplement plan.
Step 2: Learn About Your Market and Define Your Customers
Once you have established an idea about what you want to produce, you have to create your buyer persona. Buyer persona means determining the characteristics of your target customer, who they are, what are they like, what they do, their age group, their gender, and their health habits.
You have to identify your buyer characteristics accurately to produce bang on results. When defining your customers, answer these following questions accurately:
- What characteristics of my target customers share? What age group do they fall into
- Why do my target customers need my product? What product qualities my target customers are looking for?
- How can my product fulfill the deficient need?
- Where do my target customers typically shop for supplements? Is there an existing product similar to the one I am planning to launch? If yes, what is the barrier to entry and how will I break it?
You have to learn how your customers’ source information about products, such as online, magazines, existing gyms, fitness centers, or any other outlet. You have to see if you can use these platforms to market your products. These questions will help you define your target market. You can also take help from marketing consultants and conduct surveys or focus on groups for your research work.
Step 3: Have A Look At Your Competitors
In order to set your business apart and be successful at it, you need to look at your competitors closely. You have to convince your target market that your product is better than your competitors’; having a good product is not enough alone. To find the differentiator, you have to understand how your opponents operate first and play their cards in the industry. Several factors will help you find the right information; here is a list of the elements that you must take into account:
- Competitors’ price – There are two types of prices, one that the seller charges the customers and the one that is overall. Make a note of both the costs, including the bulk ones and price per pill.
- Target customers – Check who your competitors are targeting. This is an important step that will help you determine your target customers.
- Value proposition – What values your competitor’s products propose? What disclaimers do your opponents mention on their product labels and what claims they make about their products?
- Marketing techniques – How, where and what tools are your competitors using to attract niche customers? How can you use the same tools to your benefit?
Once you have the answers for each question, you have to differentiate yourself in each element and set yourself apart from your competitors.
For instance, you can target those customers that your competitors have overlooked or you can get yourself a certification that your competitors don’t have and create authentic brand value, or you can remove unwanted ingredients from your products and price it cheaper than others.
Step 4: Produce Your Product
Once you have determined what should be your brand proposition and unique selling point, it is time for you to create your supplements. If you believe that it is much easier to create the product first and then determine the above steps, you are wrong. The best process to follow is first understanding the market, the trend, and your customers, then personalized product that fits the purpose and needs best.
Think about the unique qualities of your product that you will like to accentuate. You have to not only meet the needs of your customers but also have to offer more. You can follow your competitor’s process (established ones only) of product creation. However, leave space for creativity, expansion, and growth.
Step 5: Choose The Right Supplement Manufacturer
Although you are the mastermind behind product development, you will need someone who would manufacture the product by following you to the ‘T’. Since you are new in the business, let your manufacturer help you in defining the steps ahead.
If you have a clear business model and product design, finding a reputable and relevant manufacturer, who is willing to and can move your business forward, should not be difficult. Things you need to consider when choosing your manufacturer:
- Check the reputation and experience of the manufacturer in the industry. Will the manufacturer be able to produce a quality product? What other customers have to say about the manufacturer?
- Before signing the contract, see if the manufacturer abides all rules and regulations set by nutrition and food association. He should be NSF compliant.
- Will working with the manufacturer prove to be cost-effective for you? The manufacturer should be able to provide the services you need at an affordable price.
Step 6: Start Adding Brand Value To Your Products
Distinguish your brand by adding marketing keys, such as create great product labels, build a great brand website, and start an online presence through social media. Make sure your product name is unique, yet easy to remember. Make sure your business logo and label are attractive and simplistic.
Consult a professional team of web designing and graphics experts to help you design and create best, high traffic generating websites and logos.
Step 7: Register Your Business
Once everything is set, i.e., your product line, your marketing strategy and your list of customers, and just before you begin selling your products, you must establish your business as a legal entity. You should hire or consult an attorney who will walk you through the different types of businesses you can form and their pros and cons.
You have to cover all the bases, including obtaining legal licenses and food permits stated by your state corporation or municipality authorities. The permits and licenses to be obtained differ from business to business and state to state. Especially since you are entering into food and nutrition industry, you have to abide by the state laws related to food, health, and hygiene.
Step 8: Implement Your Customer Acquisition Strategy
Marketing is a continuous and evolving process. You cannot stop with one round of marketing efforts. It should be stimulating, changing, recurring. You should also understand there is no right or wrong way for customer acquisition. It doesn’t mean what works for you will work for another and vice-versa.
However, some of the common and popular marketing strategies that most businesses implement these days include traditional methods (direct sales, newspapers, brochures, pamphlets, and flyers), influencer marketing, pay-per-click advertising, social media marketing, SEO and blogging, and video marketing. (1)
You can choose one or all of the above marketing tools. The more, the better. However, compare the results until you find the ones that best suit your purpose and budget.