Eskil, great thread! Can you give us some numbers on what your costs to this point have been, getting the formulation set, the lab work, and what your first chunk of inventory is going to cost? I am trying to figure out if this is a $5k process or a $15k process.
You can get started for less than $5k. I spent considerably less than that even, but that is also because I wanted to start with a very small test batch to begin with. The reason being that my product is something new and untested in the market and I didn't want be too much into it money-wise in case it flops.
The simpler route is to go private label, which is my plan B if my custom supplement should flop. Private labeling is basically going to a manufacturer that offers pre-made formulas, often pre-bottled, that you can slap your own label on. The upside to this is quick entry, sometimes with a minimum of 500-1000 bottles - but the quick entry MAY also be a potential downside, in that it violates the Commandment of Entry.
That's one reason I decided to go more custom at first - to create something more unique - while at the same time creating something that I knew there was a need for. I will have no direct competitors.
Just like with sourcing from China, minimum order quantities for supplements can be negotiated with most companies. Explain to them that you are serious but just need smaller quantities at first for testing. If they are hesitant, you can always try to offer to pay a bit more per bottle - in exchange for them doing a smaller quantity as well.
After all - you're not out to make a killer ROI from day one. You are just looking to see if you can actually get customers and sales. Once you do - then you can always get your costs down as you go. Besides - you don't want to be sitting on a big inventory of bottles that never sold.
Other costs I have had so far have been minimal:
- Logo creation/design: $0, I do my own graphical work.
- Label creation/design: $0, I do my own graphical work. Many manufacturers will offer this service for you at around $100, but don't expect jaw-dropping quality at that price point. Might be better looking for someone on Odesk/Elance for a more professional looking label
- Cinema4D mesh 3D model of a bottle, for product shot rendering: $5, Fiverr
- Seller Central account on Amazon, $30/mo.
My plan is to eventually sell through Amazon FBA, and then have a fulfillment center ship for anything that is ordered off the website. Until then, I will be shipping myself using Stamps.com with padded envelopes. Looking at around $2.50 - $3.00 in shipping/handling costs. I will absorb this cost in my product since my margin is pretty high, so that I can offer free shipping to customers. This because free shipping is frequently reported as the #1 conversion factor when people are considering a purchase.
Other costs that will come up once I get going:
- 800-number and call-center (Voipo.com + per-call costs for customer support)
- Outsourced content creation and marketing upkeep, social media, etc (with virtual assistants)
- PPC advertising spend, primarily Google Adwords
- Possibly a more proper cart system when I have more products. Looking at something like Limelight CRM for this. $800/mo.
I hope this answers your questions