Developing a Health Supplement Business - Progress Thread

[XOthermic]

The business I have created is a health supplement business. Right now my focus is primarily on a private label supplement,

Sup man. What type of supplements are you selling? longevity supplements? sports supplements? Pills? Powders?

 

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[1step]

Sup man. What type of supplements are you selling? longevity supplements? sports supplements? Pills? Powders?

Sorry, I dont really want to get into niches but the supplement itself is in pill form.

Can I assume from your username you are also in the supplement industry or is "thermic" not related in this case?

 

[Eskil]

Even though you and I talk in private, I still enjoy reading your updates here. They are well written out and really shows a very nice thought process and thoroughness. I think other readers of this thread will find it very useful - even if you're not sharing specifics. The concepts can still be applied to other products.

The VA process is also interesting. I have heard a lot of good and bad experiences with finding VA's. The key is to do the proper research - and it sounds like you definitely are!

Have you thought about finding short-term funding for scaling out, like through a business credit card or charge card? This would be "good debt" anyway that I'm sure you would pay off as soon as the sales revenue came back in.

 

[1step]

Even though you and I talk in private, I still enjoy reading your updates here. They are well written out and really shows a very nice thought process and thoroughness.

Thanks, I dont think of myself as a good writer, its one of the things I certainly want to improve, Im glad they come off ok though.

Have you thought about finding short-term funding for scaling out, like through a business credit card or charge card? This would be "good debt" anyway that I'm sure you would pay off as soon as the sales revenue came back in.

With recent developments I think I will need to explore this. I need a credit card with a higher max than what I have to place larger orders. I hope to try and solve this problem tomorrow when I wake up. I hope to raise my current card limits (personal), I dont think getting a new card is the answer (maybe business card).

 

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[Jab]

Really enjoying the updates dude, keep it up!

 

[nextgen]

Hello,

I am interested in the insurance portion of this. Are you using your own insurance or are you using your manufacturer's insurance if so did you receive a contract from them and a certificate of insurance from they stating that you are covered by their insurance?

 

[1step]

you using your manufacturer's insurance if so did you receive a contract from them and a certificate of insurance from they stating that you are covered by their insurance?

Yes, the supplier I use provides insurance. I never looked into the costs associated with going through an insurance company.

Jab

Really enjoying the updates dude, keep it up!​

​

Thanks, I am glad to hear it!

 

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[Money mania]

Great Job so far,

I wanted to see if you had a chance to find any other insurance company that covers online health supplement business. I called Hiscox, but they don't cover this kind of business. I also tried calling Bolt Insurance, they don't cover either. If anyone has been in the health supplements online and know of a good insurer, please keep us posted.

thanks MM

 

[nextgen]

money mania I just contacted a vitamin supplement company that provides insurance on all of there products up to $1million per case. They also stated that they typically have a contract signed with the purchasing company stating that they provide insurance ect.

 

[1step]

I wanted to see if you had a chance to find any other insurance company that covers online health supplement business. I called Hiscox, but they don't cover this kind of business. I also tried calling Bolt Insurance, they don't cover either. If anyone has been in the health supplements online and know of a good insurer, please keep us posted.

I cant be of a ton of help here but it seems cost wise your best bet will be to go through the manufacturer. If that is not an option you could try to just google it. Prior to deciding on just going through the manufacturer I looked at Product Liability Insurance Nutraceutical Dietary Supplements

I am not making this recommendation as I have no experience and did not receive a quote or even contact them, I just looked at the website and they seem to be an option.

 

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[Jake]

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

Do you mind providing more details on what you did to get your product out there? You said competition is very high and I always wondered what it would take to be seen in a competitive market.

Did you have buyers prior to receiving any reviews? Did you send out free product to get reviews?

Thanks

 

[1step]

If we were on the inside I would talk about it, but dont really want to get into specifics here.

I will say reviews are extremely important. Without reviews and social proof people will buy but the number of people who will buy will dramatically decrease. Its similar to that bell curve you always see, the early adopters and maybe early majority will buy but percentage wise it will be low.
So, you want to certainly get your product out there to get reviews however you can do that. If your product is cheap you can chalk it up to a marketing expense and give away free product for reviews. You could also have friends and family review your product, personally I probably wouldn't ask this favor but every review helps so it would be worth it especially if you are selling an expensive product that cannot be given away for free. Both of these strategies could be tough to manage as ideally you want quality reviews, with real thought put into them.

Also high competition=large pie so even if you can get a little piece it can snowball and as you pick up steam it will just keep going. your sales rank climbs which leads to more sales and then more sales etc. you just want to make sure and get reviews from ones who buy.

Price also factors in, lower prices show up higher on amazons search rankings, if you can break even on your first sales and sacrifice a little for higher search rankings it can help you speed up the process.

I realize this likely hasn't been extremely helpful and answered your question, sorry for that.

 

[1step]

Quick Update

I spoke to soon during my previous update for February. I ended up meeting my sales goal originally set.

Status Check: Goals for February
1. I will set an ambitious goal to sell 200 units the remainder of February. (I sold over 200 for the month )
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)

My sales have absolutely exploded over the past few days. I jumped the gun thinking there was no way I would sell 100 or so in 2-3 days but it has happened!

So, somehow I have met my seemingly ridiculous goal I set of selling 200 units in 20 or so days.

This also means my goal for March is far to low. 300 shouldnt be a problem, I like BHAG goals so I will update my March Goals to Include 500 Sales!

Hiring A Virtual Assistant

In light of the recent developments with sales progress I ended up hiring 2 virtual assistants. Im sure I will be able to keep them busy. I ended up spending slightly more than I had planned going into the process but I am happy with the process and feel I got 2 good assistants that will work out great. One is a male one is female, one from Philippines and one from India. The lady from India has the best written english I have ever seen for someone living in India. English skills was one of my main requirements, I didnt expect to hire someone from India but she seems like a great catch.

My Next Order

I also upped my most recent order to 1000 bottles. I hope to receive around 200 within the next week and then the remaining are probably 3 weeks away.

 

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[Jake]

If we were on the inside I would talk about it, but dont really want to get into specifics here.
...
I realize this likely hasn't been extremely helpful and answered your question, sorry for that.

It does help. Thanks!

So you're saying if you were on the inside you would talk about this more freely with details? (product details not necessary)

If so..I'll pick up the tab on your first 3 month subscription (if you'd like)

 

[1step]

The situation is somewhat complicated.

But, that was sorta what I was saying. I like this thread here as I do want to help everyone so I think its important I keep this public and continue to monitor what I say. I know a lot of the people that seem to keep coming back are not INSIDERS so I want to continue to post here for sure.

Ive read tons of your posts and know you give a ton of value to the community and certainly do not want to take you up on the offer to buy my subscription. I will have to think more about joining the inside and whether I have more information I would like to talk about in greater detail. I believe Eskil is moving his supplement business post to the inside to talk a bit more openly, so I will consider everything.

However, I would gladly speak to you in private about anything you have in mind and try and help the best I can. Skype, PM or Email. If you have questions you are personally wondering, I have no problem trying to help you one on one, if you are asking the questions for the community in general I will have to sleep on it and think about it as I mentioned above.

 

[Jake]

Cool man, thanks! I'm in research mode now but once I have specifics I'll be sure to contact you.

Sounds like things are beginning to take off for you. It's exciting to read and I'm looking forward to future updates.

 

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[1step]

Are you researching for starting a supplement company or are you starting a different business with a product to sell on Amazon?

 

[Jake]

It's a health product but not really a supplement. I'll send you an email.

 

[1step]

Final Sales count for February was 228 units

I sent an additional 25 Units that I had in my house to amazon so that they can fulfill those. They arrived today. I should be completely sold out of product today or tomorrow. Then its just a waiting game for my next shipment to arrive.

Next update probably wont be for awhile.

 

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[Jake]

Awesome progress man. Hope your next shipment arrives soon!

 

[nextgen]

1step quick question for you. How did you get the reviews?

 

[1step]

Family members or offering free product for reviews(if you have the margins) would be my suggestions

 

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[1step]

Goals for March
1.Sales Goal- Sell 300 Units (upped it to a goal of selling 500)- (at the rate I am selling I should make it but will be close)
2. Place larger order (I placed 2 orders of 1000 each so far this month)
3. Look into a second product (In June I hope to expand)
4. Ramp Up PPC Advertising (Next Month)
5. VA creating content - (They are creating lots of content)
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!

Sales Progress

So far I have sold around 200 bottles this month, I have a couple shipments on the way to amazon right now for FBA and as soon as they arrive I will switch to use FBA. So, I have fulfilled the 200 I have sold myself which takes a lot more time than I expected. Over the last couple of days I have decided FBA is very much worth the costs, the shipments cant arrive soon enough!

Long Term Goal

I want to generate 1 Million in sales by End of February 2014.

Currently that is my long term goal, make 1 Million in sales in the next year. I have had it for a few weeks now but figured I would go ahead and make it public.

I always laugh when I see a "I want to generate 1 Million in one year" post and you can laugh if you want to, it's ok.

The first post following is usually "So how are you gonna do this?" So, how am I going to do this? I am going to average selling about 110 bottles a day for the next year. Very specific, I know.

How am I going to sell 110 bottles a day? Push hard everyday.

I made a spreadsheet to outline the progress I need to make each month to scale up to meet this goal. It seems pretty reasonable to me.

So far I hit my February goal and am on track to hit the March goal.

What I Have Learned

While I was waiting for my shipments to arrive I read Influence by Caldini and it is a great book. I learned a ton from it and would certainly recommend everyone read it. Theres also a great sketch video on youtube the sums the book up pretty well if you want the 10 minute version.

 

[Jake]

Nice, man. Keep kicking a$$.

Will you be doing PPC inside or outside of Amazon? Have you begun selling outside of Amazon yet? if so, any guess at what percentage of your sales will be coming from Amazon?

I've found a few fulfillment centers that integrate with bigcommerce. Costs appear to be less than FBA so if you haven't looked into that yet, you may want to. I'd still use FBA but this gives another option for PPC / advertising.

 

[1step]

Hey Jake,

Will you be doing PPC inside or outside of Amazon?

Both but initially just bing or google to get started, still need to look into amazon a bit more.

Have you begun selling outside of Amazon yet? if so, any guess at what percentage of your sales will be coming from Amazon?

I havent, I still drive all of my sales to my amazon page to keep the sales rank as high as possible. I need more supply to sell both at the same time, so I feel like for now I am best served driving all sales to amazon, increasing sales rank and getting more sales from that. Hopefully in 1-2 more orders I will be able to focus on selling off amazon more and be past my inventory issues. I wont be able to get a million dollars in sales through just amazon, if I had to guess this first year my sales could be 50/50 or so.

I've found a few fulfillment centers that integrate with bigcommerce. Costs appear to be less than FBA so if you haven't looked into that yet, you may want to. I'd still use FBA but this gives another option for PPC / advertising.

I havent looked into this yet. I certainly dont want to fulfill my own orders so I will look into one of these or just use FBA for my other sales. Any particular ones you have looked into?


How is your progress? Still waiting?

 

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[Jake]

Hey Jake,

Both but initially just bing or google to get started, still need to look into amazon a bit more.


I havent, I still drive all of my sales to my amazon page to keep the sales rank as high as possible. I need more supply to sell both at the same time, so I feel like for now I am best served driving all sales to amazon, increasing sales rank and getting more sales from that. Hopefully in 1-2 more orders I will be able to focus on selling off amazon more and be past my inventory issues. I wont be able to get a million dollars in sales through just amazon, if I had to guess this first year my sales could be 50/50 or so.



I havent looked into this yet. I certainly dont want to fulfill my own orders so I will look into one of these or just use FBA for my other sales. Any particular ones you have looked into?


How is your progress? Still waiting?

Shipwire looks pretty good. I haven't contacted them yet though. They have fulfillment centers spread out around the U.S and are expanding globally. Bigcommerce will also direct orders to them as they're placed so it seems ideal.

I'm still waiting. Building a store now and have been contacting overseas manufacturers. The price I've found in the U.S seems to be extremely competitive to what I've found overseas so it doesn't seem worth the hassle. Haven't been able to check quality yet so that could always change.

Next month should be fun. Product will be ready and for sale and I'll also be hitting the ground visiting factories trying to decrease the prices on the quotes I've been given.

 

[1step]

I may be wrong but it looks like shipwire would be considerably more than FBA. Just looking at their site it looks like "storage and handeling" will be about $2.50 per order. On top of this there seems to be an additional cost for the actual shipping. I could be wrong, as I am just looking at it for 2 minutes. If it is $2.50 per order with shipping its a good deal (same as FBA), if thats just for picking and packing the order its not worth it.

 

[JustinBoshans]

Hello 1step. Your thread is really inspiring thanks for the great posts. I have been watching "Tony Robbin's Business Mastery" program and there is a great section about generating leads through PPC. The speaker is named Anik Singal. The whole thing is about google's ppc program. He talks about things like doing split tests, choosing the right keywords, etc. I am going to be writing notes on it and will post them for you here tomorrow night. Hopefully it will help you. Cheers.

-Justin

 

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[Jake]

I may be wrong but it looks like shipwire would be considerably more than FBA. Just looking at their site it looks like "storage and handeling" will be about $2.50 per order. On top of this there seems to be an additional cost for the actual shipping. I could be wrong, as I am just looking at it for 2 minutes. If it is $2.50 per order with shipping its a good deal (same as FBA), if thats just for picking and packing the order its not worth it.

Yes, you would have to pay for shipping. That would be passed to the customer unless you offer free shipping.

I guesstimated on shipwire and the fba calculator and shipwire appears to be about $1.30 cheaper for fulfillment and if I subtract the amazon referral it's an additional $2.40 cheaper. So $3.70. These are pure guesses. I don't know my numbers yet.

 

[1step]

I am going to be writing notes on it and will post them for you here tomorrow night. Hopefully it will help you. Cheers.

I look forward to it, thanks

I guesstimated on shipwire and the fba calculator and shipwire appears to be about $1.30 cheaper for fulfillment

My FBA fulfillment fees are right about $2.50 per order. On Shipwire they would be about the same.

Yes, you would have to pay for shipping.

This will be the difference, thats an extra 2-3 dollars using shipwire. Whether you charge for shipping or not its still additional costs that eat margins.

if I subtract the amazon referral it's an additional $2.40 cheaper

Yeah but you will be selling on your own site so this isnt relevant in this case.

So in total if I sell on my site for $25 I will incur 2.50 in fees using FBA and 4.50-5.00 using shipwire. I dont know if amazon can tie in with bigcommerce (dont think so) so I would have to send the orders to them for them to fulfill