Supplements Business? YES OR NO?

[TadMoore]

Fastlaners!!!

I'm thinking about buying a supplements business. I know nothing about the industry.

The supplement business I’m looking at is related to the brain. It’s supposed to prevent Alzheimer’s. I originally passed because of my limited knowledge of the industry and I think supplements benefits can be a lot of smoke and mirrors. The business does about $200 K in profits. It does these numbers with the ugliest website you have ever seen, bad branding, no SEO, no PPC, no landing pages, no optimization, nothing. Anyway, I will layout the business “Pro’s and Cons”

Pro

1. The business was started by a Doctor who is a leader in the Alzheimer's research field, he also runs a foundation to further the research. He has spoke before congress on the issue, and has written many articles for various re-search papers. He has several published books. Watching some of his interviews he is extremely passionate about it.
2. Alzheimer's is a serious issue effecting the baby boomer generation. It’s the second search on Medical MD’s top researched subjects related to health. It’s up there at the top with obesity and diabetes.
3. The doctor has written hundreds of brain exercises that he gives away for free. I envision a program where his courses go hand in hand with the supplements. This is a clean slate from a branding perspective, I would start over, and do it right.
4. The doctor goes to various conferences and promotes the product. The Doctor is a huge endorsement; my research suggests that finding a doctor to endorse a product is the holy grail in the industry.

Cons

1. Small hitch with the doctor, not even sure it’s a problem. The doctor is a little bit of a character he is an Indian man complete with turban, and a huge white beard. I am not a racist person; I have Indian friends, and eat Indian food 3 times a week. However, from a marketing perspective this might not be the best move. Especially to an older generation, that might not be so open minded, my grampa was in the military and what comes out of his mouth some times

1. Is my target demographic on the internet buying supplements? My grand father just got an iPad, but he is pretty cautious about what he does on that thing. The supplement targets people ages 40 and over, so a large percentage would use the internet, but not sure a 40 year old is taking memory loss, and brain health seriously enough yet. Even a 50 year old person?

Any thoughts? Anyone in the supplement business? Anyone set up sales funnels, and possibly sales teams related to this industry? How do get this thing moving in volume fast!

Thanks so much in advance!

 

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[pro]

Unless you have guaranteed contracts to sell the product and it won't go away once the business is sold, then it's a real business.

If not, it's a scam.

How are sales generated if there is virtually no marketing?

 

[MJ DeMarco]

he is an Indian man complete with turban, and a huge white beard.

To me, this is a brand builder. His image as a brand could be powerful. Americans view Eastern medicine as mysterious if not superior, and what better image than an old Indian guy with a beard? Or an elder Asian man?

If the product has legitimate theraputic value, it could be a big winner.

Be careful with the laws on this; pay attention to FDA rules and liability insurance will be an absolute must.

 

[MJ DeMarco]

The supplement targets people ages 40 and over, so a large percentage would use the internet, but not sure a 40 year old is taking memory loss, and brain health seriously enough yet. Even a 50 year old person?

Your best bet would be to target distribution channels that hit your target market ... this means Walgreens, Costco, Sams, and Walmart.

 

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[Vigilante]

Hand in hand with what MJ said... selling suppliments to those accounts (speaking from a guy who made his slowlane living selling to those exact accounts) is a LONG process, and difficult in an industry where they source their own private label products. It will be easier, though, for you to get up onto the .com versions of those retailers. You may want to research whether there is a master distributor that you could sell to who in turn could sell to those retail accounts, as none of them will want to set up a vendor agreement for this unknown product.

You are going to have to do something to get a track record before approaching the big 4 listed in MJ's post. They don't want to be your testing ground... they want you to bring them something with a track record.

 

[Forza]

What kind of a doctor is he?
Has his work been published in peer reviewed science journals?
What is his actual reputation amongst medical doctors?
Does it make any sense that his products work?

 

[TadMoore]

Thanks so much for everyone's responses.

Regarding Mj's comments & Vigilante

1. I completely agree that with an eastern medicine spin would work wonders. I still think the doctor is an advantage, but I couldn't decide if that was just me. My friend's father wears a turban, and I have heard some sad stories involving ignorant people.

2. Oh... Costco and those retailers are monsters. I have heard about product returns just killing companies. I would want this to be a 30 million dollar operation, before I looked at that. I know that sounds like the "chicken before the egg" thinking, but Costco is just such a pain in the a$$. I have some experience with big retailers, I hear you Vigilante!

The Doctor's Validity??? (Couple questions on that) I wouldn't waste you gentlemen's time if I didn't

Honestly, I think the doctors legit. His current branding is just so so bad, I laughed when my broker emailed it to me. When I actually started to explore, look at the financials, the guy has a lot of happy customers and consistent orders of (300-400 a month) The traffic from the server confirms this, along with the financials. He is a well respected doctor, I can find endless supply of information on him on google. He has a functioning website, (It's old and crappy, and I wouldn't buy anything off of it). He speaks around the country, that's one of his primary sales methods from what I can gather. Someone buys his book or hears him speak, and they might buy supplements.

I'm just trying to think of way to add volume fast. Set up my own MLM system? Franchise? I'm not sure the target market is easily accessible, that's the biggest problem in my mind.

 

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[Vigilante]

Could you work it into an existing MLM system as an additional product offering for them?

 

[TadMoore]

Could you work it into an existing MLM system as an additional product offering for them?

Nice! I had not thought of that angle. I don't really know of any off hand, I will have to do some more homework on that one. Unless you know of any?

 

[Vigilante]

I guess this one would be my first choice.

http://www.jrwatkins.com/jrwatkins/index.cfm?gclid=CNCUrdbe6a0CFS6FQAodelxN5Q

 

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[MJ DeMarco]

He speaks around the country, that's one of his primary sales methods from what I can gather. Someone buys his book or hears him speak, and they might buy supplements.

Would he continue to do this, and push the product post sale?

 

[TadMoore]

Would he continue to do this, and push the product post sale?

Well I'm trying to develop a deal that will keep him in the company. In short I'm not doing a deal, unless the Doc stays, and continues to promote the product when he can. (I feel he is going to agree to that) On the flip side, I don't want to be dependent on the Doc and his speaking engagements to generate business. (bad spot for me to be in)