The amount a supplement company earns per product sold depends on how the product is sold. Companies that sell directly to consumers should aim for a profit margin of 10 to 40 percent. Those who sell through distributors usually have a margin of 5 to 15 percent. Private label supplements are cost-effective because they have low initial costs and minimal orders.
Not only do they dramatically increase customer loyalty and trust, private label supplements give you a lot of credibility and generate significant active and passive sources of income. Established professionals and marketers who have been successful with private label supplements report earning more than six figures per year on supplements alone. You can read the FDA's “Dietary Supplement Labeling Guide” for more information on how to label your product. Sales in health stores have grown by a respectable 4.5 percent annually, and online sales of vitamins and supplements have grown by 12 percent every year.
EXPERT TIP: Your supplement manufacturer will be your go-to person for every question or concern you have; their experience in the supplement business can help you avoid mistakes in other business areas, such as marketing and brand mistakes. When marketing nutritional supplements, you must remember that your health product must meet the needs of customers. You might consider targeting a niche market by specializing in a certain aspect of your industry, such as beauty supplements. But keep in mind that you'll need to comply with all relevant regulations and make sure your supplements are safe.
A food business operator (FBO) that intends to manufacture or sell food supplements needs a license to do so. When considering how to make private label supplements profitable, you'll also want to learn the ins and outs of selling your products on an e-commerce platform (such as selling on Amazon or other platforms), in a physical retail space, or in your private practice. Your target market will be people concerned about their overall health, but it will also depend on the type of supplements you choose to offer. Promote your supplements online through mobile and easy-to-use websites, emails, paid marketing, affiliate marketing, and paid Amazon promotions Maybe that Facebook friend you met in college is now running a supplement business, or a LinkedIn contact of yours is connected to dozens of potential customers.
Custom formulations are another way to start your supplement line or combine custom and private label formulations. By providing a private line of supplements and protocols that address the specific needs of your clientele, you'll increase your trust and loyalty. As consumers' interest in health and wellness increases, so does the market for supplements that support this lifestyle. In this age of awareness and modern technology, people are always looking for ways to improve themselves and many are turning to supplements.
Bank and SBA loans are probably the best options, other than friends and family, to finance a supplement business.