Developing a Health Supplement Business - Progress Thread

[1step]

I am creating this post to document my startup journey.
I have read many posts on here but have never been an active poster. I certainly don't know everything and have tons to learn. I am open to hear from anyone that's willing to give advice because above all else I want to learn and continue to move this business forward. Its very early on so I am all about testing and doing right now, I don't plan on wasting a ton of time with developing a website, logo, etc all of those will come in the future as I validate the market.

I wanted to start this thread for a couple of reasons, they include
1. Accountability
2. Education, learn from others and further develop my business
3. Keep track and work through thoughts
4. Help or inspire others

The business I have created is a health supplement business. Right now my focus is primarily on a private label supplement, which I plan to sell online, currently on various merchant websites; eventually building my own.

Where I Currently Stand

• I have decided on the product I want to sell initially, I have plans to offer additional products in the future, in my search I found a couple options that looked promising
• I decided upon the manufacturer mainly chose based on price and MOQ
• I designed initial label
• I got my first shipment today (12-4-12), this is just a small test order

Future Improvements

• Need to hire someone to create a better logo, not 100% sure what I want at this point
• Re-design/test the label, after seeing it on the bottle I know it can be improved
• Create website, don't want to get to far ahead of myself yet

Goals for December

• Sell all of the product I currently have
• Get 100% set up through various sales channels
• Place a larger order and receive it before Christmas
• Figure out insurance needs, (probably not the best idea to start selling without this 100% figured out) I will spend time on this but if anyone has advice it would be much appreciated
• Finish re-reading MJs book
• Start testing ppc on second order

That's all for this post, I want to update twice per month in the future. By the next time I update I will have made my first dollar.

 

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[1step]

My Ignition

I want a house and boat on the ocean
I want to travel Europe with my little brother and play lots of soccer
I want to make sure my parents are taken care of
I want to prove the naysayers wrong
I want to own part of a MLS soccer team

 

[The-J]

Good thing that 'Sell all my product' is number one on your goals... you must find a customer before even considering bigger orders!

Speed+ for doing. Good luck!

 

[1step]

CENTS and Goals for December

I finished reading TMF for the second time so wanted to post about CENTS and other thoughts.

Need: The industry is huge and growing every year. The area that I am targeting is a competitive niche (maybe too competitive, probably my number 1 concern is being another "me too") but there is a ton of need and the product solves a large pain point.

Entry: In theory anyone could start a business similar to this which seems to be common in a lot of internet businesses. But starting a supplement company isn't as simple as say blogging, selling on ebay, network marketing, or affiliate marketing. It does take a significant amount of work, planning, and investment. If we were rating it on a scale of 1-10 it certainly wouldn't be a 10 but maybe around a 6-7.

Control: I will control the brand and product so more or less I am in complete control. Initially I will rely on selling through Amazon and eBay etc so in that regard maybe i am not in 100% control because at any time they could stop me from selling on their sites. However the ingredients in this product are common and there are other private label companies I could go through to fill any product related needs.

Scale: Because of the size of the market and need there is a ton of scale through reach. This is both a national and worldwide problem so while I will focus on the US market there could be room to expand in the future.

Time: There will definitely be room to automate this business. The time requirement will not be huge, at the moment I can use Amazon for fullfilment, customer service and order processing (there fees aren't bad considering the amount of the process they handle). In the future I could use a distributor and handle charges through my site. This could be something to look into as I grow but either way there is room to remove myself from the equation and automate.

Re-Evaluating My goals for December

1. Sell all of the product I currently have (working on it)
2. Get 100% set up through various sales channels
3. Place a larger order and receive it before Christmas
4. Figure out insurance needs, (probably not the best idea to start selling without this 100% figured out) I will spend time on this but if anyone has advice it would be much appreciated
5. Finish re-reading MJs book
6. Start testing ppc on second order

The only thing I have on the front of my mind right now is selling the product, I am still working on getting everything 100% finished with my set up on amazon but come Thursday 12-13-12 everything should be processed and I should hopefully be able to sell my first unit Friday. If everything goes well I will be able to sell everything in a week. Ordering the next shipment and getting it before Christmas may not be possible with this time table, getting my next shipment may not be possible until the 28th. In an ideal world I will be able to place the order on 12-17 and have it on 12-21/12-22.

Its somewhat pointless to try and plan this out though, I just need to focus on selling the product and the rest will work itself out. There really isn't a rush to get it before Christmas as there wouldn't be a way I could turn around and sell it as an X-mas present anyway.

I think I will go make a couple craigslist ads and see if theres any potential there, can't see supplements really selling through CL but I will try now while I have some down time.

Until next time

 

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[MJ DeMarco]

I will control the brand and product so more or less I am in complete control. Initially I will rely on selling through Amazon and eBay etc so in that regard maybe i am not in 100% control because at any time they could stop me from selling on their sites.

Usually in a control process it is very hard to control distribution. I'm at the mercy of Amazon and all my channels as well (itunes, Nook, etc.). IMO, the control risk in these types of arrangement is minimal (vs being the affiliate of some product whereas you don't even control the product, nor the brand.) The #1 objective of control is to control your product, your brand, and all decision making regarding such. (You get to determine the method of distribution.)

I got my first shipment today (12-4-12), this is just a small test order

That's got to be incredibly exciting!!!

Figure out insurance needs, (probably not the best idea to start selling without this 100% figured out) I will spend time on this but if anyone has advice it would be much appreciated

Absolutely. You want to get liability insurance if you haven't done so ... if someone gets sick consuming your product, you need to be protected.

Hiscox does a lot of entrepreneurial insurance.

Public Liability Insurance | Hiscox UK

 

[GPM]

If you can please get a healthy supplement line of product going. I would gladly pay for supplements that DO NOT have artificial crap in it. It seems like every product on the market has artificial colors (Red 40), artificial sugars (aspartame, acesulfame potassium, sucralose), or high fructose corm syrup (HFCS).

I will not buy a single product that has any of those in it and it drives me crazy that most do. Kind of ironic that the majority of supplement brands try to come off as healthy and yet they contain a chemical stew of some of the worst things you can consume.

 

[Deleted13247]

Insurance needs is my bread and butter (undergrad and job). MJ is right that you will need insurance. In fact more then just product liability( property loss? Loss of stock? Adverse event to someone taking your product?). For health supplements that you are talking about, not all general insurance carriers will insure that since it is of a different risk class that needs more specialized attention. Best bet is to go to an insurance broker( ie marsh{ i do not work for marsh but they are one of the most known in the industry}) and have a discussion. They will tell you what exactly you will need and market it to carriers that specialize in "Life Science". If you would like more info please feel free to PM me.

 

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[1step]

Hiscox does a lot of entrepreneurial insurance.

Public Liability Insurance | Hiscox UK

Thanks, I will certainly look into this. As you mentioned insurance is of the utmost importance, this is number 1 on my list. I did find a different supplier that is a little more expensive but they add you to their insurance policy covering product liability. I would assume this would cover me 100% but its something I will have to look into. As this minimal cost spread out bottle to bottle would probably make more sense than shelling out for insurance on an invalidated business.

Although this obviously will not cover the first order I have already received, which would be me at risk in the short term.

It seems like every product on the market has artificial colors (Red 40), artificial sugars (aspartame, acesulfame potassium, sucralose), or high fructose corm syrup (HFCS).

I'd be interested in hearing what kind of supplements you are referring to, this isn't something I pay a ton of attention to. Are you referring to supplements like protein powder?

Insurance needs is my bread and butter (undergrad and job). MJ is right that you will need insurance. In fact more then just product liability( property loss? Loss of stock? Adverse event to someone taking your product?). For health supplements that you are talking about, not all general insurance carriers will insure that since it is of a different risk class that needs more specialized attention.

Thanks for your reply. I have read that insuring ingestibles is considerably more expensive. I have sent you a PM but maybe if you have a chance you could also address my point above about a supplier that adds you to their insurance policy.

 

[GPM]

Almost everything. Protein powder, creatine, nitrous oxide products, recovery mixes, pre workout mixes… It almost ALL has that crap in it. Sure you can buy most things that make up those products in their 100% pure form, but sometimes it is nice to have it in a tasty mix to throw down before or after a work out.

I guess I could just mix them up in the quantities I want, put in some cane sugar or honey and add some vanilla extract or something. There is a business idea right there for you!

 

[1step]

Almost everything. Protein powder, creatine, nitrous oxide products, recovery mixes, pre workout mixes… It almost ALL has that crap in it. Sure you can buy most things that make up those products in their 100% pure form, but sometimes it is nice to have it in a tasty mix to throw down before or after a work out.

I guess I could just mix them up in the quantities I want, put in some cane sugar or honey and add some vanilla extract or something. There is a business idea right there for you!

Its like "youbar" for protein shakes.. I like it, it probably exists somewhere. Look up youbar if you arent familiar with it, its a pretty cool little business, I ordered from them once, the bars were great but a bit expensive

 

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[1step]

The Ladder of Success is Never Crowded at the Top

Been about a week, so I feel like I should update my progress.

Sales:
Sales Goal: Sell All of My Test Order Shipment (24 items)
Progress: I have made progress here, I have sold 5 units within the last week. Not great but its a start. I got caught up on getting set up through amazon, it is a slower process then I assumed it would be. I am sending some of the remaining supply to them so they can fulfill them as there are various sales benefits to this especially being a new seller (I dont even have a "buy box" on my details page yet). I posted a few city specific craigslist ads that did not work.
Next Step: As the product is being sent to amazon I wont be able to sell on their site so I will have a few down days to test craigslist more. I also want to add to my ebay page.

PPC:
Progress: I went ahead and set up free PPC for this to get started and try and work on conversions. Initially I am just testing a few headlines but I am also looking at other successful campaigns to see what to use here. I am NOT an expert in PPC so I have been looking at tons of examples. If anyone knows a site to look at some that would be appreciated. Biggest problem is probably... obviously what to say in the minimal space available.

Below I'll go ahead and update my goals for this month.

Goals for December
Sell all of the product I currently have (5/24 sold)
Get 100% set up through various sales channels (about 90% finished)
Place a larger order and receive it before Christmas (this wont happen unfortunately. Cash flow and timing problems)
Figure out insurance needs (this is figured out thanks to some help from fellow fastlaners)
Finish re-reading MJs book (done)
Start testing ppc on second order (done)

 

[1step]

Month 1 is in the books!

Below I'll go ahead and update my goals for this month being that the month is more or less over this is a great time to update for the final time this year.

Goals for December
Sell all of the product I currently have (20/24 sold) probably wont sell 4 tomorrow but I am happy with this progress
Get 100% set up through various sales channels (finished)
Place a larger order and receive it before Christmas (this wont happen unfortunately. Cash flow and timing problems)
Figure out insurance needs (this is figured out thanks to some help from fellow fastlaners)
Finish re-reading MJs book (done)
Start testing ppc on second order (done)

New Goals for January of 2013
1. I will place a larger order, goal date for this is 1-7, I will be able to put this on my credit card and a new cycle starts then so I can have about 60 days to pay this off. I want to sell all of these by the end of February. That will allow me to pay off my credit card debt before its due but this isnt a huge issue as I have the cash to cover it just dont want to.
2. Sell 30 units in January, I will only have about 2 weeks to sell as my shipment likely would arrive until the middle of the month
3. Work on new product label
4. Create website
5. Learn how to sell on ebay, I have product listed but there must be better ways to sell, I am much better on the amazon platform and have had success there I just havent had success getting attention to my ebay listing so I ned to research strategies for ebay. I want more control!
6. Continue to work on craigslist sales, I feel like theres potential here but havent had luck yet

What I Have Learned and What May Help You
1. Its not a race and its important to manage risks. I have wanted to get ahead of myself many times but I really want to remember to manage risk and not let myself get too far ahead. By continuously testing you can have more information and act in an informed manner
2. Amazon- the amazon selling market is amazing. I have been able to make sales on their platform with little promotion. I do have some experience with the website and have learned a lot about how to get your product out there more but I am still surprised by the number of sales i was able to make. I will say that once i sent the product to amazon for FBA (fulfillment by amazon) my sales have gone up. I am selling multiple items a day compared to maybe 1 every 2 days when I was fulfilling myself. Im sure there is a correlation.
FBA is relatively cheap and saves a ton of time so I plan to use it in the future on my next shipment. I think with all fees using FBA a $25.00 product incurs about 7-8 dollars in fees and shipping costs. I believe before using FBA my fees were $4.00 so it adds 3 dollars for the shipping and packing cost. My shipping costs were about $2.00 per order when I was fulfilling, for the added benefit of the customer getting "free shipping" as well as the amazon prime bonus as well as the fact that my sales have increased this is well worth the costs incurred. And I plan to stick with it.
3. Right now I am relying on amazon a ton and want to move away from that to getting more sales from my own site, I can direct them from my site to amazon for now just want to limit my risk from amazon where they dont control my traffic and sales

 

[Jab]

Good luck with your business - it looks like you're going about everything the right way. And I might have a proposition for you in the future.

 

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[1step]

Thanks, I sold out of all my product in the last few days and have placed a larger order. It feels good to be progressing but sucks that I have nothing to sell for a couple days now.

 

[Jab]

I'm interested in how you deal with product flow like this - it's one of the things I'm still trying to figure out. How I'm going to manage holding enough stock while still growing.

 

[Eskil]

Sounds like you are taking the same approach I am going with my supplement (Amazon first, small test order, etc). For various reasons I have yet to order my first batch, but it is a matter of time.

One thing I have thought about a lot is what my best way to handle inventory vs. cash flow as good as possible. I have talked to a few other people who do supplements and a common problem if you start selling well is to juggle inventory vs. manufacturing times vs. delays vs. cash flow to pay for orders.

But - I am BEYOND eager to get started!

 

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[1step]

I'm interested in how you deal with product flow like this - it's one of the things I'm still trying to figure out. How I'm going to manage holding enough stock while still growing.

I have talked to a few other people who do supplements and a common problem if you start selling well is to juggle inventory vs. manufacturing times vs. delays vs. cash flow to pay for orders.

Yes its very hard especially when you are low on cash. In my situation I dont feel like I have many options or at least no options that make sense

For various reasons I have yet to order my first batch, but it is a matter of time.

Yes, I look forward to following your progress, I have read your thread and know you created your own formula and look forward to following your updates as you progress. We could be on similar trajectories as it seems you are nearing your launch with a larger initial order and such. Good luck

 

[Eskil]

Yes, I look forward to following your progress, I have read your thread and know you created your own formula and look forward to following your updates as you progress. We could be on similar trajectories as it seems you are nearing your launch with a larger initial order and such. Good luck

Thanks and good luck to you too. I will be following your progress here as well.

 

[1step]

Wow its been almost a month and a half since I last updated this, now is a decent time to post although it wont be a long post.

A Look at My Goals for January of 2013
1. I will place a larger order, goal date for this is 1-7 (I placed this order)
2. Sell 30 units in January, I will only have about 2 weeks to sell as my shipment likely would arrive until the middle of the month (This didnt happen, i didnt even receive my shipment until Febuary, yes it took almost an entire month to receive)
3. Work on new product label (finished the new label, I like it 100 times more than the previous)
4. Create website (the long wait to receive this shipment allowed me time to create a decent website)
5. Learn how to sell on ebay! (eBay sucks, I have no clue how to increase my sales. I think the key is to get way more feedback, buy and sell a ton of small cost items, get good feedback and proceed this way. Not sure, really I am lost and may not pursue this method for awhile)
6. Continue to work on craigslist sales (didnt spend anytime working on this)

So January kind of sucked. I ordered my second shipment the first week of January and received it the first week of February. A month turnaround seems like a bit much to me and I'm not sure I can take that long of a wait. Especially right now as I am trying to grow with no real way to know how much I will sell and how fast.

1. Created my website as well as a few landing pages for PPC traffic. Right now these sites will push traffic to my Amazon listing so that I can increase my sales, rank and traffic on the site. Eventually I will implement my own payment processor but right now I think its important to build up Amazon.
2. Started selling the second shipment. I sent about 75% of my order to Amazon for them to fulfill and am currently working on selling the remaining that I kept. I believe I have sold around 10 units in the past 4 days that I have been able to sell.
3. Created some youtube videos to push viewers from youtube to my new website. I will continue to work on more videos, as I think this is a great opportunity when you weigh hours worked vs impact.

Goals for the Remainder of February
1. I will set an ambitious goal to sell 200 units the remainder of February.
2. Place another order by the end of February (so I can receive it by April lol)
3. Put a little money into PPC to see what my cost is to acquire a sale
4. Get professional pictures taken of my product- quality isnt poor right now but it needs to be better

Things I should research/learn more about
1. PPC advertising- decreasing cpc, copywriting
2. Sales on eBay
3. Selling on Craigslist- what works best, gets most responses

I think thats all for now, I hope to update more often than once every 1.5 months!

 

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[OsmanS]

Great progress thread. Keep up the good work.

 

[1step]

If theres something you all think I should be covering that Im not Im open to hear it.

I want these to serve 2 purposes, help me keep track/help motivate me and help you all so yeah, if there something you all would find interesting that isnt included so far let me know. I would appreciate it

 

[Eskil]

Hey man, nice to see you update your progress. Reminds me I need to start updating my own thread again...lol

Anyway - have you thought to set up a subscription-based delivery of your supplement? This is one thing I will be doing for sure, as it's not only a great way to build recurring revenue over time - but also can tell you who your most devoted buyers are (who might be interested in similar products down the road).

I see that Amazon now offers Subscriptions on some supplements, but I believe that they must be FBA (which yours is).

 

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[1step]

Wow MAJOR PROBLEM!

My sales are slowly ramping up and I cant stop logging into Amazon to check how many I have sold. This is a great problem to have but I do feel like I have been less productive. It is a weird feeling, I remember reading something similar on here and at the time I remember thinking thats pretty stupid just dont check it but now that I have fallen into this trap, I can completely see how this happens!

I want to stop and I know I need to stop, I guess the best way to sum it up is as an addiction. Like the popular thread title "Addicted to Passive Income Deposits"

BTW today I finally sold 10 supplement bottles in a day, I thought I could hit this number but not so quick. I hope to average 10 sales a day within the next month or so. This would be a big step for me and worth a little celebration.

Anyway - have you thought to set up a subscription-based delivery of your supplement?

I havent looked into this yet but I will, I think you have to discount your price 15% in order to apply to this program but I havent looked into it. Either way at 15% it will be well worth the recurring revenue. thanks

 

[CEBenz]

This is awesome! Love the read. Way to take action. This is a path is like to take when the current project is up and profitable and AUTOMATED!

 

[Eskil]

Congrats on the milestone. I actually made my first order yesterday for my own supplement. Very excited!

 

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[1step]

congrats man, thats exciting. Care to share your order details, cost per, quantity ordered etc.

 

[Eskil]

congrats man, thats exciting. Care to share your order details, cost per, quantity ordered etc.

Thanks. Since this thread (and my own, but I might have MJ move mine to the INSIDERS's) are both public, I rather keep some of it under wraps or discuss it in private.

 

[1step]

Yeah I haven't divulged much of anything for that reason, so I definitely understand, I know your name and what not are out there so its completely understandable.

 

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[DeletedUser2]

Good start!

Keep chugging

Z

 

[1step]

Now is a good time to go ahead and update this for the last time in February. First to relive my goals for February and see how I did.


Status Check: Goals for February
1. I will set an ambitious goal to sell 200 units the remainder of February. (If sales hold up (they will) I will have sold around 120 units)
2. Place another order by the end of February (so I can receive it by April lol) (I placed another order today, still smallm next one should be larger)
3. Put a little money into PPC to see what my cost is to acquire a sale (I started this but dont know what cost per sale is yet (limited data))
4. Get professional pictures taken of my product- quality isnt poor right now but it needs to be better (I hope to fix this before the end of the month, my friend has a nice camera just need to find a time that works for him)

Things I should research/learn more about
1. PPC advertising- decreasing cpc, copywriting
2. Sales on eBay
3. Selling on Craigslist- what works best, gets most responses

I will extend this on to March, I didnt really do any of this stuff. The PPC advertising and copywriting are top of my mind right now, the ebay and craigslist arent something I am overly concerned with right now.


What Else I Have Been Working On
1. Creating content- I have been mainly doing this my self. My goals with the content are to drive traffic to my website and sales pages to convert to sales. Some various forms of content include articles, reviews, images, videos, press releases. I think thats about it. Any other content types or suggestions here?
2. Hiring a Virtual Assistant- I have been taking my time asking lots of questions to find the right person this time. Last time I hired a VA I hired the wrong guy and it didnt work out. This time I am trying to ask more questions and make sure we are both on the same page before proceeding. I placed an ad on oDesk and got around 300 responses in a day... thats a lot of applications to weed through. I eliminated certain countries and then eliminated bad feedback scores and then got the list down to around 100. Took those 100 and quickly looked through what they wrote, if it was poor english I got rid of them and if it seemed like a mass produced message not catered to my job I cut them. This left about 30 applicants.
I messaged them all if they would do a test job based on required skills. Some didnt reply and this left me about 15-20 to question further.
I hope to have my final choice by the end of the month. Maybe my next post here will be written by my VA :nono:
3. Other planning activities to scale up faster in the future.


Scaling Up Faster
Right now my inventory is somewhat low so I am left in an odd predicament. I could do some promotion that would lead to an increase in sales. Or I could leave it as is and sell the 10 or so products a day I currently sell. So heres the problem, my next shipment wont arrive for 2-3 weeks. If I sell out of my product too fast I will have nothing left to sell and my sales rank will take a major hit from inactivity. This means when I do get my product and go back to sell it it will take a little bit of time to get back up to where I average this amount of sales per day.
So I think I will just sit on my current sales and hope I can get my newest shipment to amazon before I run out of product. All this time planning and creating the needed strategies and content in order to launch after I get my next shipment, this will hopefully increase my sales per day considerably.
After I sell my remaining order I should be past the cash issues and be able to place a larger order so I can stop worrying and getting grey hairs over these inventory issues. :eusa_clap:


Promotion
Free and cheap promotion methods I plan to use
Social Networks- Twitter, Facebook
Image Sharing Sites- Pinterest, Instagram, Tumblr
Video Sites- Youtube and Vimeo
Written Content- Articles, Press Releases, Answers, similar
Fiverr Services- Fiverr has some unique services that may be helpful, I will test quite a few and see if I can get a ROI. Maybe I will post about this in the future

This Post Seems to be getting rather long, or maybe I am just getting rather tired. Either way I will start to wrap it up and hope you all have found this somewhat useful.


Goals for March
1.Sales Goal- Sell 300 Units (unlike last months crazy goal that I didnt think I could reach, I think I can get this one)
2. Place larger order
3. Look into a second product (YAY more inventory problems :groove
4. Ramp Up PPC Advertising (Per Eskil I need to look into Amazon PPC ads (thanks bud))
5. My VA should be creating tons of content and getting it dispersed in the right areas so I dont have to deal with that crap anymore. I do want to see all the content so I can make sure the quality is good and proofread/edit it. I am probably somewhat of a control freak but I think its important to make sure I know what is representing my brand.
6. I want to start learning better copywriting, I dont know how I plan to do this yet but I will figure it out in March!


Conclusion
I think the visitors that actually come and read this are pretty set now, I am not so worried about what I am talking about. I still dont plan to talk about my brand or niche as I dont want this thread to be found. Regardless of me eliminating those details I hope this helps people out there and you find it useful.
Sometimes I am unsure what you all will find interesting, I talk to Eskil outside of this about some stuff as he develops his supplement brand but I dont feel like a lot of it would be interesting to people not building a sups brand so I dont really think to include it here. If you all are looking for certain information feel free to comment and I will try and address it in the future.