Why should you enter the supplement market?
It’s often said that in real estate it’s all about location, location, location. But in markets, it’s all about timing, timing and timing. When do you enter the market and how long will it yield?
Whether you enter the market in the beginning and get to live through incredible growth or join soon after inception, you have a chance to make a substantial profit – provided the market continues to grow. But what when entering at the height of the market? What happens when it crashes down or even dips? Can you sustain the fall? Can you hang in and wait for things to get better?
More often than not, those that can sustain the ups and downs will have success. So the decision on when to enter can be predicated on several key factors: 1) Where is the market trending?, 2) How much trust do consumers have in the market?, and 3) How can you position your product and brand within the market and dominate it?
The U.S. is a consumer-based economy. A product is produced and sold, the government takes a cut and consumer-demand dictates value, demand and market volatility. The more demand for your product, the more you sell. The more competition for your product, the harder it may be to sell. And the markets change by the second. So locating a stable and secure market should be tough to do right? Wrong.
The hottest and largest online market is without question Amazon. Amazon has been growing steadily over the past few years in fact and there is no end in sight.
But how do I know if Amazon will crash soon? No one really does. But with sustained growth over the last 3 years and projected growth in 2019 to reach higher, we can safely assume that Amazon will do well in 2019 and that may be all we need to leverage a small wager on a new business venture.
Fundamentals of starting an online business
Using Amazon as an example, we see a market wherein products are located by search query and advertising revenue can cause them to be sorted higher on a list based on search terms. In other words, if you pay enough money, you can get your product to be seen before competitor’s products when people search for certain keywords.
We know from Google that over 90% of consumers trust products and services that appear at the top of the list more than those at the bottom when a search is performed. Therefore, getting your product to the TOP of the list when a consumer searches for a keyword vastly increases the chances that someone will buy it.
Problem solved right? Well, no. There’s a bit more to it than that but let’s keep it simple. Let’s focus on the big picture here. 52 billion dollars is going to change hands this calendar year in the supplement business. Amazon will take a nice piece of that online pie and makes it relatively easy and cheap for you to get in on the action. You can be a part of their growth and take a piece of that enormous pie.
We are living in a time where there is a relatively new but established marketplace (Amazon) with global access wherein almost anyone can enter for very little cost and do so very quickly. The opportunity is here for the taking. The tools needed to get started are within reach. With a computer, hard work and wise decisions, one can enter the market and have some success in business.
Things to consider before entering the market
Let’s make this as simple as it can be made. To enter the market you must have a product, you must offer it for sale, you must promote it and you must sell it.
That’s really all there is to it.
But let’s put all the cards on the table here. You may want to consider a few things before you begin.
Navigating through the red tape can be discouraging if you do not keep it simple. I’ve stated what has to be done. Now I’ll tell you a few things to look out for.
First, is costing and ROI or Return On Investment. Using a spreadsheet (Microsoft Excel or Google Sheets), you can create a simple costing sheet which will also calculate your ROI. Why is this important? Because if you are spending more than you make, you will not have a business for very long. To make this form tell you what you want, find ALL of your costs – the cost of the product, shipping, bottling, labeling, etc. Then calculate the price you will sell your product(s) for. Then minus out all other expenses including advertising, taxes and commissions (if applicable). I suggest being very, very precise. I have several of these ROI spreadsheets and they are down to the penny. Once you have this costing information, you will know how much you make per sale and can easily add how much you have to spend to get one sale – this is ROI. You spend X amount of dollars to bring in X amount of dollars.
Next is the old niche. There are many different supplements on the market, lots of delivery forms (capsules, tablets, etc.) and potency matters as well. You have choices to make. Are you interested in selling herbal supplements? Or would you rather focus on nutraceuticals? Maybe you prefer protein powders and pre-workout shakes?
Identifying a niche in the marketplace can be tricky. You may not want to sell Vitamin C if there are 1,000 other Vitamin C supplements on the market. You may want to sell a B Complex or create your own unique blend of vitamins to serve a specific purpose and support a unique client base. Whatever you choose to sell, I suggest doing your research on it to find a NEED in the marketplace before spending money on its development. To be safe, make sure there are people that are actually asking for the product before you create and sell it. Don’t private label a coral calcium supplement when you could create a line of gummies.
There are several places that you can accomplish this. Amazon provides a list of its best-selling products. Creating a google account and using Search Console can also help identify demand and lack of supply which is what you are looking for.
As for advertising, I’ll just cut right to the chase. Spend your money on Amazon to advertise your Amazon products. Keep it simple in the beginning. Then expand. But until you have a website with a shopping cart and social media accounts set up, spend your advertising money on Amazon.
Don’t get too caught up in not being able to produce the product that you want if you cannot find the demand for it. You can always expand your line later and add products. It’s more important to get started with a product that is selling than to do too much “work” on finding a niche. The bottom line is this, you can’t sell if you don’t have a product for sale. So keep your priorities straight and don’t spend so much time “working on something”. Get started. Then refine the process. Every single successful business owner has made mistakes. You can’t be a business owner if you never start. So start!
Importance of your brand
You’ve decided to make the jump and get in on the action. Now what?
Create your brand, that’s what! But wait, what’s a brand?
It’s the identification of your company. It’s the logo, insignia, colors, feel, look and message. It’s how your customer’s will see YOU. It’s your reputation. And it’s very important.
Take a look at your favorite athlete, singer, actor or artist. Many of them have a brand. Many have marketing companies, publicists or even merchandise. Some sell shirts, make products or have advertising but whatever it is they do, they have a brand. What’s the first thing you think of when you think of them? That’s their brand. It’s what makes them who they are.
Your brand should do two things: 1.) it should tell consumers or clients what your company does or how your product helps them and 2.) it should position you in the marketplace.
Let’s take an example to illustrate the importance of this. Tropicana is known for producing orange juice. They actually produce several kinds of juice but primarily orange juice. In 2009 they decided to change their packaging from an iconic orange with a straw coming out of it, to – wait for it – a glass of orange juice. Now, if you think about Tropicana, what do you think of? The ONLY thing I think of is an orange with a straw coming out of it.
That image of an orange with a straw coming out is not a great brand – it’s Hall of Fame level branding of a company. The image is simple, perfectly shows what Tropicana wants to be known for (pure orange juice straight from the orange) and positions them as healthy, pure and premium orange juice.
But in 2009, they changed their packaging. And sales were catastrophic. Why? Because they changed their branding from iconic to OK. The new product showed orange juice. That’s what they sell. Seems OK. But it was not only not OK, it ended up tanking their sales.
The public was so used to the look that they didn’t get it – people were at the grocery store with confused looks on their faces wondering “Where is Tropicana orange juice and what is this?”. I was one of them. I used to drink Tropicana orange juice by the gallon in 2009. And when I saw the new look I couldn’t believe it. I thought it was a different company. And I didn’t understand why they would try to change such a great package.
Needless to say, they quickly remedied the situation, went back to their old look and things worked out. Good for Tropicana. They were able to recover from a nearly catastrophic brand change.
Could you imagine if McDonalds changed the golden arches to say a burger with fries logo? McDonalds could come up with the worst logo and branding ever invented and probably survive but the point is that they would lose some business just from loyal customers not being able to identify the brand for some period of time. And that, is the point. The brand can establish and maintain loyalty. It is how the customer can identify your company and helps to create and maintain trust in your company.
Many top executives and salesmen will tell you that trust may be the most important factor in sales. If a customer trusts your product and brand, they will buy it – provided they need or want it.
So branding is very important. And those that do it well sometimes go unnoticed. They often don’t get much credit. Can you name the person that designed the ad for Dolce and Gabana? Who wrote the theme song to your favorite T.V. show? Who designed the logo for your favorite company? Chances are it was a branding expert. If done correctly, your brand can help you interest customers, establish your company’s identity and help your customers find you in the crowd. So the next time you have a few minutes, Google your favorite band or artist and look up the name of the person that helped you identify them – and then send them some love. They deserve it.
Now, I’ve given you the main reason for launching your new supplement business this year. It’s time to get going! Custom Nutra is here to help you get your company going and branded for success. It truly is a great time to get started. Off you go!