Axiom's Supplement Company

[youngtrep]

Who did you use for manf.?

Ive looked at several for custom formulation and no one would let me order for less than a couple grand to start out with. Who did you score $500 with?

500 bottles is the lowest I've been quoted for a custom formulation first order. With the supplement industry doing pretty well these days and growing its just not worth their while to do smaller batches. It is a pretty involved process in terms of ingredient procurement, testing, cap filling, label, bottling... You can generally do 50-100 bottles or less though for a private label formula.

 

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[axiom]

Make sure you are operating as an LLC, S-Corp etc and that you doing everything strictly by the book in terms of your corporate setup. I have been running a supplement company for almost a year now and you need to make sure in case something does go wrong you can't be held personally liable. If someone does decide to sue I can guarantee you your company will be named in the suit along with the manufacturer. Do some reading on piercing the corporate veil and make sure you are following all applicable rules like adequate capitalization and following corporate formalities. This is a pretty good overview http://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html.

I appreciate this and will read it carefully. Sometimes I forget that people can be insane and lawsuit-happy. Protecting myself is number 1.

PS. Mind if I PM with some general supplement questions?

 

[Iwokeup]

So I wondered how you guys are dealing with the big revelation (@ least in the NYT) about the supplements having almost none of the advertised ingredients. Has this caused a backlash for y'all? How do y'all verify that what's labeled is actually delivered?

Are there manus known to be shady?

Thanks in advance.

 

[SEBASTlAN]

@axiom I too own a supplement company, still in the custom formulation stage. You are right in that the industry is all about marketing and perception. Just look at low-quality products/high-quality marketing companies like Shredz which is about 2 years old and already a multi-million dollar company

 

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[youngtrep]

So I wondered how you guys are dealing with the big revelation (@ least in the NYT) about the supplements having almost none of the advertised ingredients. Has this caused a backlash for y'all? How do y'all verify that what's labeled is actually delivered?

Are there manus known to be shady?

Thanks in advance.

It's pretty sad that those companies are cutting corners to such an extreme degree. A legit bottle of saw palmetto for example which was mentioned in the NYT article probably costs under $2 per bottle at the scale those companies are producing at. To try to go even cheaper is pure greed. While the investigation might have an impact on generic brands, I think it will only increase sales for premium companies that really push quality as a main selling tool and have prices that reflect it (Thorne Research, Metagenics etc.)

In regards to manufacturers, the quality is all over the map. I spent a couple of months narrowing down who I wanted to work with on my first custom formula. I probably reached out to 10-15 manufacturers and that didn't even scratch the surface of what's out there. One company I came across prominently displays a major industry watchdog's certification on their website. When I reached out to the organization to confirm that the manufacturer had in fact been audited, they told me they had never heard of them. Another manufacturer who had a slick website and a pleasant sales rep who I spoke with on the phone, had a suspect looking picture of their headquarters on their about us page. After a 10 second reverse image search I found that they had simply bought a stock image of a commercial building and photoshopped their logo onto it. If they are willing to do that, what the hell else could they be lieing about? I finally settled on my current manufacturer after multiple phone calls and a face to face meeting because one of their reps happened to be visiting customers near where I live. They have an extremely thorough safety/testing process and I have no doubts as to the quality of the products I am selling. It's a little scary to think though what people are ingesting coming from some of these companies.

 

[MoneyDoc]

This industry is turning into a marketing game. A beautiful, eye-pleasing label will win over any other supplement. Just think about it.. If you're a guy and looking to buy a pre-workout, you'll most likely by the most bad a$$ packaging out there.

I am also entering this industry with a pre-workout (with killer packaging) and a beard growth enhancing product called BeardZerian (you can probably guess who I'm trying to get support from).

 

[axiom]

@axiom I too own a supplement company, still in the custom formulation stage. You are right in that the industry is all about marketing and perception. Just look at low-quality products/high-quality marketing companies like Shredz which is about 2 years old and already a multi-million dollar company

This industry is turning into a marketing game. A beautiful, eye-pleasing label will win over any other supplement. Just think about it.. If you're a guy and looking to buy a pre-workout, you'll most likely by the most bad a$$ packaging out there.

I am also entering this industry with a pre-workout (with killer packaging) and a beard growth enhancing product called BeardZerian (you can probably guess who I'm trying to get support from).

Exactly, which is why you can't just look at supplements and call them "too saturated". A good product will fail. But a good product with excellent marketing will come out on top. People will always buy useful products to keep their bodies healthy, and they want a brand that shows them how to do that. The supplement market isn't dead, its just changing.

It's pretty sad that those companies are cutting corners to such an extreme degree. A legit bottle of saw palmetto for example which was mentioned in the NYT article probably costs under $2 per bottle at the scale those companies are producing at. To try to go even cheaper is pure greed. While the investigation might have an impact on generic brands, I think it will only increase sales for premium companies that really push quality as a main selling tool and have prices that reflect it (Thorne Research, Metagenics etc.)

In regards to manufacturers, the quality is all over the map. I spent a couple of months narrowing down who I wanted to work with on my first custom formula. I probably reached out to 10-15 manufacturers and that didn't even scratch the surface of what's out there. One company I came across prominently displays a major industry watchdog's certification on their website. When I reached out to the organization to confirm that the manufacturer had in fact been audited, they told me they had never heard of them. Another manufacturer who had a slick website and a pleasant sales rep who I spoke with on the phone, had a suspect looking picture of their headquarters on their about us page. After a 10 second reverse image search I found that they had simply bought a stock image of a commercial building and photoshopped their logo onto it. If they are willing to do that, what the hell else could they be lieing about? I finally settled on my current manufacturer after multiple phone calls and a face to face meeting because one of their reps happened to be visiting customers near where I live. They have an extremely thorough safety/testing process and I have no doubts as to the quality of the products I am selling. It's a little scary to think though what people are ingesting coming from some of these companies.

100% agree. I have two pieces of advice for finding a good manufacturer:

1. Stay in the US. The prices aren't that different in China and companies in the US tend to make higher quality supplements.
2. Get samples from every manufacturer. Though you can't guarantee that everything they say is in them, its still useful for seeing how they conduct themselves as a company, which is pretty telling.

 

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[axiom]

Does anyone have any suggestions about getting initial reviews for Amazon? (e.g. how many, review spacing, etc.)

 

[randomnumber314]

Does anyone have any suggestions about getting initial reviews for Amazon? (e.g. how many, review spacing, etc.)

Ask people you know to review your product. Send one email to a trusted friend every day or two.

 

[Jake]

Does anyone have any suggestions about getting initial reviews for Amazon? (e.g. how many, review spacing, etc.)

Honest - Give away your product for honest reviews
Middle of the road - Ask family and friends
..... - Pay people on Fiverr

 

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[Iwokeup]

It's pretty sad that those companies are cutting corners to such an extreme degree. A legit bottle of saw palmetto for example which was mentioned in the NYT article probably costs under $2 per bottle at the scale those companies are producing at. To try to go even cheaper is pure greed. While the investigation might have an impact on generic brands, I think it will only increase sales for premium companies that really push quality as a main selling tool and have prices that reflect it (Thorne Research, Metagenics etc.)

In regards to manufacturers, the quality is all over the map. I spent a couple of months narrowing down who I wanted to work with on my first custom formula. I probably reached out to 10-15 manufacturers and that didn't even scratch the surface of what's out there. One company I came across prominently displays a major industry watchdog's certification on their website. When I reached out to the organization to confirm that the manufacturer had in fact been audited, they told me they had never heard of them. Another manufacturer who had a slick website and a pleasant sales rep who I spoke with on the phone, had a suspect looking picture of their headquarters on their about us page. After a 10 second reverse image search I found that they had simply bought a stock image of a commercial building and photoshopped their logo onto it. If they are willing to do that, what the hell else could they be lieing about? I finally settled on my current manufacturer after multiple phone calls and a face to face meeting because one of their reps happened to be visiting customers near where I live. They have an extremely thorough safety/testing process and I have no doubts as to the quality of the products I am selling. It's a little scary to think though what people are ingesting coming from some of these companies.

Thanks for this reply.

Much appreciated.

 

[axiom]

Said I wouldn't update until I got a sale, so I'll keep this short. I received the shipment and immediately sent it to FBA--should be ready to sell by tomorrow or the next day.

I'm posting this to recommend an app that some of you may or may not have heard of. Its called Hemingway and I can honestly say it is a godsend for copywriters. You type a blog post, sales letter, etc., and then send it through Hemingway. Hemingway edits it and tells you how to make it clearer and more concise, which I believe is incredibly important for copywriting. It actually makes your writing more like Ernest Hemingway's, who wrote in a bold, non-extravagent, and articulate way.

Best part? It's free. If you have to write anything (which you should), I'd highly recommend it.

Here it is: http://www.hemingwayapp.com

 

[SerpKing]

@axiom I too own a supplement company, still in the custom formulation stage. You are right in that the industry is all about marketing and perception. Just look at low-quality products/high-quality marketing companies like Shredz which is about 2 years old and already a multi-million dollar company

Or bring strong marketing to an innovative product that actual gives the user an end result.

Cost to develop a me-too junk product: $3-7
Cost to develop a product worth buying: $8-15+
Selling price: $30-70

You can still make a nice margin and bring something quality to market that customers are much more likely to re-buy. Nobody is re-buying something that over promises and under delivers.

 

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[SEBASTlAN]

Nobody is re-buying something that over promises and under delivers.

In this industry, yes they are and they do it in droves.

 

[piesandak47]

Just curious, I'm hoping to get into the supplement space next year, what are the average margins for supplements, let's say a preworkout type supplement for example?

I really have no idea.

 

[camcam]

@axiom You said their insurance covers you too, are you repackaging the product yourself or are they sending it fully packaged with your design etc?

 

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[SEBASTlAN]

Just curious, I'm hoping to get into the supplement space next year, what are the average margins for supplements, let's say a preworkout type supplement for example?

I really have no idea.

Depends what brand, but for us it's about 10-30%

 

[piesandak47]

Depends what brand, but for us it's about 10-30%

Cool thanks. What supplements do you make? Is it a 100% custom formulation?

 

[SEBASTlAN]

Cool thanks. What supplements do you make? Is it a 100% custom formulation?

Right now we resell other brands but our custom formulation is in the works as we speak. Margins will be higher on that obviously because I am sourcing the raw materials and can charge a price I decide.

 

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[axiom]

Update #3:

I have done a slight reworking of my strategy. Here's what has happened since I last updated.

1. Sent 71 bottles to FBA. This process took far longer than I expected it would. It was about four days before they arrived at the warehouses and another three before they were 'fulfillable'. Now, 48 of my bottles are being transshipped to other warehouses, so they can't be fulfilled for a few more days.

2. Kept 1 bottle to take product photos with. I used thick white paper, natural light, and my iPhone. Can't get much more budget than that. I'm pretty good at photoshop and I worked with the pictures until they looked good. They actually came out pretty great in my opinion. Once I get going, I may get professional photos done, but I don't see the point at the moment.

3. Created and optimized listing. I loaded the entire thing with keywords. I used all 250 characters for the title. Used all the bullets, wrote copy for the description, and filled up the extra keywords. Looking at my competitor's, I can tell that my listing is better than the vast majority of theirs. They were lazy with their copy, and that could help me gain market share.


Here is what I'm going to do over the next few weeks:

1. Focus on Amazon. I'm putting my attention and time towards Amazon to gain some traction and sales. Once I feel comfortable with my position on Amazon, I will focus on my site to gain more control. That is when I'll release more products, optimize the backend, and build my funnel. Until then, Amazon sales is my #1 goal.

2. Get 15+ initial reviews. Nobody buys something with 0 reviews. I'm going to get my product up to 15 reviews from friends and the Amazon Skype group we created with people on the forum. This should take about two weeks, because I am going to stagger the reviews for optimal effect on my ranking. All will be verified purchases.

3. Hit Amazon PPC hard. After I get 15 reviews, I will create a PPC campaign. I plan on devoting a good amount of money on this so I can get a feel for my ROI. Once product costs + marketing costs < Sale price, I will throw as much money at it as possible.

4. After I do that, I will place a large order for more inventory. I will do everything I can to avoid inventory issues, because it can really hurt rankings.

5. Get as many reviews as possible. Using the software, Feedbackz -- brought to you by @JamesF -- I will follow up every purchase asking for feedback and reviews. Reviews are killer in this industry.

That's the game plan. The waiting is almost over, and now the real fun begins.

-Axiom

 

[Guest12120]

Instead of pictures you can have 3D renderings done on fiverr for $5 per angle.

 

[axiom]

Instead of pictures you can have 3D renderings done on fiverr for $5 per angle.

Do you have to send your product to them or no?

 

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[Guest12120]

Do you have to send your product to them or no?

Just a label and an image of a bottle (if they don't have the one you like).

 

[SEBASTlAN]

Update #3:

I have done a slight reworking of my strategy. Here's what has happened since I last updated.

1. Sent 71 bottles to FBA. This process took far longer than I expected it would. It was about four days before they arrived at the warehouses and another three before they were 'fulfillable'. Now, 48 of my bottles are being transshipped to other warehouses, so they can't be fulfilled for a few more days.

2. Kept 1 bottle to take product photos with. I used thick white paper, natural light, and my iPhone. Can't get much more budget than that. I'm pretty good at photoshop and I worked with the pictures until they looked good. They actually came out pretty great in my opinion. Once I get going, I may get professional photos done, but I don't see the point at the moment.

3. Created and optimized listing. I loaded the entire thing with keywords. I used all 250 characters for the title. Used all the bullets, wrote copy for the description, and filled up the extra keywords. Looking at my competitor's, I can tell that my listing is better than the vast majority of theirs. They were lazy with their copy, and that could help me gain market share.


Here is what I'm going to do over the next few weeks:

1. Focus on Amazon. I'm putting my attention and time towards Amazon to gain some traction and sales. Once I feel comfortable with my position on Amazon, I will focus on my site to gain more control. That is when I'll release more products, optimize the backend, and build my funnel. Until then, Amazon sales is my #1 goal.

2. Get 15+ initial reviews. Nobody buys something with 0 reviews. I'm going to get my product up to 15 reviews from friends and the Amazon Skype group we created with people on the forum. This should take about two weeks, because I am going to stagger the reviews for optimal effect on my ranking. All will be verified purchases.

3. Hit Amazon PPC hard. After I get 15 reviews, I will create a PPC campaign. I plan on devoting a good amount of money on this so I can get a feel for my ROI. Once product costs + marketing costs < Sale price, I will throw as much money at it as possible.

4. After I do that, I will place a large order for more inventory. I will do everything I can to avoid inventory issues, because it can really hurt rankings.

5. Get as many reviews as possible. Using the software, Feedbackz -- brought to you by @JamesF -- I will follow up every purchase asking for feedback and reviews. Reviews are killer in this industry.

That's the game plan. The waiting is almost over, and now the real fun begins.

-Axiom

How do you get on the Amazon Skype group?

 

[axiom]

Update #4:

Much has happened since I last updated a couple weeks ago.

1. 100% of my inventory finally became fulfillable. It took about a week and a half but Amazon finally got everything transshipped and in the right warehouses. Sometimes I think they are too big for their own good. Just one more reason to work towards selling almost exclusively on my own site. Future problems.

2. I started collecting reviews. People do not buy things without social proof aka reviews. The sheer amount of time between starting and getting your first couple sales is insane without a system for building reviews. I have shipped my product off to friends, family, and even some fastlaners here. Plan on getting 5 or so more to bring me to ~15. Also, I joined Feedbackz, a service started by James Fend here on the forum (James Amazio). It has an incredibly clean UI and 3 template follow-up emails to push for product reviews from customers. I definitely recommend it. Alright, honest plug done.

3. Most importantly -- I got SALES. Real, organic, legit, beautiful sales. My first sale came about three days after my listing was live. It was sporadic for about a week. Now, I'm pushing an average of 1.5 a day. Not bad at all for a product that is only a few weeks old. This, coupled with the products bought by friends, caused me to go from page 9 for my main keyword to page 2 within just a few days. I'm having some trouble breaking into page 1, but all in due time.

Goals for the March:

1. Ramp up the PPC. This will be my major concern. I have already set a $10/day for 7 days auto campaign on Amazon ads. That will end next monday and I will evaluate what keywords worked well and which ones didn't. Then, I'll set up a manual campaign with the best ones. As of now, it doesn't say that any sales are attributed to my campaign, but I've heard it takes a while for that stat to update. I find it hard to believe that no sales have come from it.

I've also just made my first FB ad, pointing to my Amazon listing. I'm setting the budget at $5/day for now to test the waters. I will eventually move into Google product listing ads (signed up) and adwords of course, but I'd like to get FB and Amazon automated first.

2. Get a steady 3-4 sales/day. With PPC, this shouldn't be a problem.

3. Break into the first page for main keyword. This will be huge. It works in conjunction with the last point in that the more daily sales I get, the higher I move in the rankings. I believe my sales goal will allow me to barely break into the first page. Then more and more organic sales will start rolling in, pushing me higher.

4. Stack up as many reviews as possible. Reviews are killer. With Feedbackz, this process is pretty automated. Just have to follow up with every customer asking them their thoughts on the product.

5. Display good customer service starting now. I see too many sellers on Amazon just sitting back and letting Amazon handle all customer service issues. This may be easier, but it makes the business far less sustainable in the long run. I firmly believe that one of the greatest differentiating factors is excellent customer service. It is the difference between one-off customers and recurring purchasers. I will answer every question asked and comment on every review posted.

That's all I've got. It may be another couple of weeks before I post again.

-Axiom

 

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[SEBASTlAN]

2.5 months later...?

 

[axiom]

2.5 months later...?

Thanks. Didn't realize it had been that long.

Update #5: A lot has happened.

• Sales started picking up from averaging 3-5 a day to 10-15 a day. Also had my first $1,000 day.
• That was interrupted by inventory issues twice -- I was selling faster than I could stay in stock
• I upped my PPC spending to ~$200/day
• A bit after inventory was sorted out, I got my first bad review. Up until that point, I had about 25 five star reviews. Then the bad review hit, and my sales plummeted. Amazon must place much more emphasis on bad reviews than good ones in terms of rank. No big deal, it is to be expected with supplements because everyone responds differently.
• So while I'm battling that, I am also battling marketing problems. PPC is through the roof and I was losing money. Now, the goal is not to maximize profit at this point, but to bring in as many customers as possible. But I knew I couldn't keep the shaky fledgling business alive with PPC.

This led me to an epiphany. I realized I had been thinking way too short-term, looking to spike profits as fast as possible. As a result, though, I chose to ignore better, cheaper options that would grow my brand in the long-term. So that brings us to the plan now:

• Flesh out my site with content. Hired a freelance writer on elance and will be posting 3-5 articles a week. This will boost SEO down the road, and will provide a ton of value to prospective targeted customers. Plus, its miles cheaper than the $5-8/click I was paying before.
• I am building an Instagram page. Social media also provides you with endless, targeted customers for free. Instagress makes getting followers insanely easy and its dirt cheap. Highly recommended.
• Find influencers. I will pinpoint and choose high profile influencers from my target market and will set up partnerships with them. In this space, impressions and imagery are everything, and nothing is more effective than celebrity.
• Hire an SEO expert on elance. I'd like to start building some quality backlinks to my site so I can ween myself off of the unstable machine of Amazon. Its good for starting, but like I've alluded to, they can ruin you whenever they want to.
• Pause the PPC. Its simply not worth it at this time for me. The only thing I am continuing is Amazon PPC, because that has proved profitable for me.

Sorry about the long delay, I'll try to update earlier next time.

 

[Gymjunkie]

Very inspiring thread!! Thanks for sharing.

Question, how long did market research and learning about your products took you?

 

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[axiom]

Very inspiring thread!! Thanks for sharing.

Question, how long did market research and learning about your products took you?

Initial research before placing the test order was probably 2-3 weeks. Honestly, I believe that may have been too much and I should have followed my gut sooner, but it doesn't matter at this point. Since then, I continually research the product and market to understand everything and decide on marketing angles. The research never really stops.

 

[Gymjunkie]

Initial research before placing the test order was probably 2-3 weeks. Honestly, I believe that may have been too much and I should have followed my gut sooner, but it doesn't matter at this point. Since then, I continually research the product and market to understand everything and decide on marketing angles. The research never really stops.

Hmm.. honestly, this is a serious industry.. health isn't a joke so, just jumping in doesn't seem right to me. Bit irresponsible.. So I do think someone has to be knowing a lot of stuff to provide value instead of just reselling formulas.. Much to learn and this evolve fast with lots of competition.

Such a 'sexy' business to be in seemingly, especially after seeing these success stories on this forum.