As more and more people try to live healthy lifestyles, selling supplements is a great business idea in an up-and-coming sector.
When starting a supplement business, it’s crucial to choose a product that has legitimate health benefits and find a gap in the market that allows you to reach a whole new target audience.
- Identify a Niche Audience
- Find a Niche Product
- Define Sales Channels
- Identify the Minimum Budget
- Form a Legal Entity
- Set Up the Shop
- Reach First $1,000 in Sales
How to Start a Supplement Business?
1. Identify a Niche Audience
Before working on any of the logistics of your business, you need to have a target audience in mind. The best way to find an audience for your supplements small business is to look for a niche audience.
A niche audience is a group of people with similar interests, lifestyles, and needs. These preferences will be very specific. People over 50 aren’t a niche, for example, but over 50 years old environmentally-conscious fitness fanatics looking for planet-friendly water bottles for protein drinks are a niche.
The more niche you go, the less competition you’ll have to contend with, and the easier it will be to come up with a product.
Here are some examples of niche audiences:
Example niche audience: Millenial women who use organic cosmetics as a means of relaxation and are Instagram influencers.
Example niche audience: Health-conscious small dog owners whose dogs are picky eaters.
1.1 Analyze Supplement Niche Communities
To decide what supplement(s) your company will sell, look into the niche communities that already exist. You can find these niche communities on sites like Reddit or Facebook, where they usually discuss real-world problems and ideas for products.
Some online communities even review and discuss existing products, giving you an insight into the competition and how you can differentiate yourself. While carrying out this step, aim to understand more about the demographics that use this type of product. If most people who take supplements are also interested in the gym, for example, this can help to narrow down your audience to sell supplements.
Here are some examples of supplement niche communities:
1.2 Find a Problem or a Market Gap
Most businesses seek to either find (and solve) a problem or create a product that fills a gap in the market. A gap in the market happens when consumers have a particular need or problem, but there are no products currently on the market aimed at those consumers.
It will help you create your product and brand identity if you can find a problem or market gap and define your supplement business around it. To look for problems or gaps in the market, spend time researching your target audience and reading through their online communities. You could also look for the most frequently searched keywords related to your niche to know what consumers are seeking out.
Potential Market Gap: Protein powders with no flavor that can be added to drinks without changing the taste.
Potential Problem: Many vitamins don’t taste nice, so children won’t eat them.
Potential Market Gap: Supplements aimed at supporting mental health.
Potential Problem: Many supplements come in plastic bottles, which are difficult to recycle.
1.3 Formulate the Niche Audience
Now it’s time to tie everything you’ve learned together – which audience has what problem, how bad the problem is, and whether there are any current solutions. If there are current solutions on the market, consider what’s missing from these solutions.
Take the example of the problem of supplements coming in plastic. If there are supplements in glass bottles on the market, maybe they’re expensive, so your niche audience could be people looking for affordable eco options. Define your target audience around the problem or gap in the market for the best results when selling supplements online.
Here are some examples of niche audiences:
- Women looking for supplements to support them during their menstrual cycle + there are few vitamin combinations created especially for this.
- Gym-goers with lactose intolerance + most of the protein powders on the market contain whey.
- Men who are unable to grow beards + there are few items on the market that encourage healthy hair growth.
- Vegetarians and vegans that live in places without much sunlight + they need vitamin D, but most of the vitamin D currently on the market contains animal products.
2. Find a Niche Product
Now you’ve established the audience and the problem they have, it’s time to start searching for a solution. Your product will become the solution. Thinking of your supplement dealer shop this way will help to shape the products you choose and your marketing strategy.
To find a solution, discuss the problem with people in your target audience and find out the solutions they’d be most likely to buy. Analyze the solutions already on the market and check their reviews to find out if you could create a more effective alternative.
Here are examples of niche products you could create for your online supplement shop.
Example niche product: Supplements aimed at older people who are still active to strengthen their bones and avoid breakages.
Example niche product: Protein supplements that can be mixed into water to make a fruit juice drink, perfect for people who don’t like milky powder shakes.
Example niche product: Supplements containing a blend of vitamins that improve sleep, aimed at people who struggle with sleep but don’t want to use prescription drugs.
2.1 Analyze the Competitors
It can seem scary to have competitors in your field, but it’s actually a good sign. Having competition means there’s money in your chosen niche and that demand already exists to sell supplements online. Now, rather than convincing people they need the product you’re selling, you’ll need to convince them they need yours rather than your competitors’.
To analyze the competition, search online for companies in your sector. Analyze what they’re doing to get results, from their marketing strategy to their product descriptions. See if you can replicate (or improve on) the results by using similar strategies with your own unique twist.
Here are three popular supplement competitors:
- Athletic Greens: https://athleticgreens.com/en
- GNC: https://www.gnc.com/
- Bodybuilding.com: https://shop.bodybuilding.com/
2.2 Unique Selling Proposition
A USP (unique selling proposition) is something your business offers consumers that other businesses don’t have. If you open a supplement shop, you’ll have to create your own. Here are some examples of 5 famous brands and their USPs.
- Pringles: Pringles create uniquely-shaped crisps that come in a tub, unlike other crisps in a packet.
- Starbucks: Starbucks has a coffee shop on nearly every street, and they offer flavors not seen elsewhere.
- Google: Google is the most-used search engine in the world.
- Dunkin Donuts: This chain offers sweet snacks and coffees at affordable family prices.
- Red Bull: Red Bull is the best-known energy drink.
Here are the USPs of the three competitors we discussed:
- Athletic Greens: This brand creates a blend of vitamins in one supplement that’s specially designed for athletic performance
- GNC: This site offers a huge range of supplements at affordable prices.
- Bodybuilding.com: This site offers products specially designed to support muscle growth.
2.3 Choose a Product
Now you’ve established your audience and USP, it’s time to choose a product that matches. You can also bring your competitor research into this by looking for products that don’t yet exist. Be realistic by checking the suppliers for your sector and seeing which types of products they’re able to make for small supplement businesses.
Once you’ve got ideas for a couple of products, discuss them with friends and family that take supplements or people you’ve gathered at a focus group. Give them your ideas for a few different supplement products and see which is their favorite.
Here are some examples of an audience, problem, and product:
People who don’t like to chew tablets + most supplements come as tablets + they need dissolvable, flavorless tablets for a drink.
People who can’t remember if they have or haven’t taken supplements + there’s no way of knowing + they need supplements that come in packages for each day of the week.
2.4 Find Suppliers
A supplier can determine how successful your business will be. If they provide good products on time, your customers will be happy. If the products are poor and the stock is late, it will negatively impact your customer service.
To source supplements to sell, look for suppliers online and ask others in the small business community whether they have any recommendations. While you can change suppliers down the line, things will run a lot more smoothly if you choose the right supplier, to begin with. Here are some supplement suppliers to take a look at:
3. Define Sales Channels
You now need to think about how you’ll actually get the sales. Having a physical store is an option, but starting with an online store is the most common option and one of the cheapest to set up. If you don’t have the budget for an eCommerce platform, consider cheaper sales channels. You can even start a supplement business on Instagram.
In the first instance, get your initial sales by telling family and friends to buy your products and to send them to their friends, too. Ask other business owners which sales channels have the best conversion rates for them.
Here are some examples of potential sales channels:
- Your personal: Facebook friends, Instagram followers, colleagues, schoolmates
- Paid advertising: Google ads, Facebook ads, Tiktok ads, Twitter ads, Pinterest ads
- Marketplaces: Amazon, Etsy, Ebay
- Communities: Facebook groups, Reddit, Quora, forums
- Other: Blogging, Craigslist, promoting in the real world (e.g. schools, workplaces, malls)
4. Identify the Minimum Budget
The good news about starting a business selling supplements for a living is you don’t need tons of money. All you need at first is enough money to make $1000 in sales. For this, you’ll need to include in your budget the money for $1000 worth of inventory, the money for any marketing materials you need, and an eCommerce platform, if applicable.
Once you’ve made $1000, you’ll have a customer base and hopefully some reviews. Plus, once you can prove that you’re a sustainable business, the bank will be more likely to loan you money. Ask your friends and family for help to reach the first $1000 in sales.
4.1 FFF and Personal Money
Having personal money in the form of a high salary or wages is one of the easiest ways to fund your new business. It doesn’t require any borrowing, and you won’t have to pay any interest.
Another great financing method if you’re unlikely to be given a bank loan is FFF, which stands for friends, family, and fools – the fools referring to people with little investment experience. Asking people you know for money is an easy and effective financing tool, and unlike loans, you won’t need to pay back interest.
Send an email round to all your friends and family explaining your business plan and asking for their help.
4.2 Bank Loans
The number one thing every bank wants to avoid is taking a risk. The riskier they think your business plan is, the less likely they are to lend you money, as they’ll fear not getting it back. With this in mind, having a fully-costed business plan, previous experience of running a business, or even collateral to offer the bank are all ways of making it more likely you’ll get a loan.
Don’t forget when you take out a loan, you don’t just have to pay back the money you borrowed – there’s interest, too. Consider whether you can repay the interest before applying for a loan for selling supplements.
4.3 SBA Guaranteed Loans
The government-run SBA wants to help as many entrepreneurs as possible start businesses, so they offer SBA-lacked loans to help people like you to open a supplement shop. These loans reduce the risk that lenders take by offering collateral on your behalf in the event that you’re unable to repay the loan.
You can use the ‘Lender Match’ tool to find a lender that’s perfect for your supplement online store. The SBA also make direct loans in special circumstances, such as businesses and homeowners recovering from declared disasters. To find out more about SBA guaranteed loans and how to apply for one, visit this page.
4.4 Government Grants
A grant is an amount of money you don’t have to pay back that’s typically given to people to support new businesses or studies. The government gives out a set amount of grants per year. These grants are a great option if you can’t borrow from friends and family or are unable to lend money from the bank.
Most grants are only available for certain types of businesses – usually ones which are nonprofit or invest in research and development – basically businesses that have a positive effect on the community. To see if your supplements business could be eligible for a government grant, visit this page.
Crowdfunding essentially involves asking people you know and beyond to contribute money to your business plan to sell supplements online, usually not for any return on investment. Crowdfunding is an excellent way to support your other financing methods and can be an excellent financing method by itself if you reach enough people.
There are various ways to crowdfund, but the most popular way is to use a website such as ‘GoFundMe’, ‘Kickstarter’, or ‘Fundable’. Once you’ve created the fundraising page, share it on social media and via email. Ask your close friends and family to send it on to their friends and acquaintances, too.
5. Form a Legal Entity
Doing things by the book is crucial to avoid fines or even criminal charges for not adhering to rules and regulations. If you make your business a legal structure, your brand will be more legitimate to your customers and clients.
If you’re worried about the risk involved with forming a legal entity, opt for an LLC business structure. An LLC is a limited liability company and it protects the business owner for the debts and liabilities of the business. LLCs also offer more flexible taxation than some other business structures. If you’re worried about getting the legalities right, work with an accountant or legal professional for support.
5.1 Business Name
Don’t spend too much time picking out a business name. If it doesn’t yield results or match your brand identity as time goes on, you can always change it later on. Bear in mind, however, that you’ll need one when you set up your business for legal reasons.
For name inspiration, research the supplement business names of your competitors. If you come up with a few supplement shop names but can’t decide which one is best, consult friends and family or organize a focus group with supplement buyers and ask their opinions. Keep your supplement business name clear and concise to make your marketing materials more eye-catching.
5.2 Choose a Business Structure
To get into supplements, you’ll need to choose a business structure that best suits your set-up. This will effect your taxes and how you do your accounts. Here are the main structures to choose from:
- Sole proprietor: A sole proprietor owns an unincorporated business by themselves.
- Partnership: A partnership is when two or more people create a business, they each contribute and share the profits and losses.
- Corporation: In a corporation, shareholders can give money or property in exchange for the corporation’s capital stock.
- S Corporation: S corporations pass corporate income, losses, credits, and deductions to their shareholders for federal tax purposes.
- LLC: An LLC protects its owners from personal responsibility for its debts or liabilities.
5.3 Register for Taxes (EIN)
Every business has to pay tax – it’s a non-negotiable aspect of starting a supplement business. While there are business structures with more flexible taxation options (such as an LLC) you’ll still have to pay tax at the federal and (probably) at the state level.
If you’re unsure exactly how much tax to pay per year and how to file your tax return, conduct online research or hire an accountant. Remember, accountants cost money, so consider this as part of your budget and decide whether it’s necessary for the successful running of your business. You can find more information on business taxes here.
5.4 Bank Account & Credit Card
There are multiple benefits to opting for a business bank account instead of simply using your personal bank account. You can distinguish between your personal and business money, which makes it easier not only to keep records, but also to keep track of what you’re spending. Having a business bank account can also make you seem more legitimate to customers and clients.
Most of the main commercial banks offer business accounts you can use for your supplement shop online. Some bank accounts come with perks for applying, so do your research before selecting the right one for you. It’s worth applying for a credit card, too, for periods of minimal cash flow.
5.5 Insurance & Accounting
Accounting is how you keep on top of all your incomings and outgoings, and it’s crucial for being able to report your company’s earnings and paying adequate taxes. Insurance protects you from lawsuits, which are the last thing any small business owner wants to deal with.
There are multiple types of insurance for small business owners to consider, to make your business safer. These include:
- Business owners policy
- Product liability insurance
- Professional liability insurance
- General liability insurance
- Home-based business insurance
If you’re not sure which types of insurance apply to your small business, ask other small business owners or consult a professional.
5.6 Permits & Licenses
Permits and licenses are sometimes required at the state and federal level for businesses like your supplement company. For the most part, permits and licenses are needed if you’re selling a product that’s regulated by a governmental body, such as alcohol or firearms.
Depending on the ingredients of your supplements, they may be considered pharmaceuticals and could require permits or licenses to sell. If you’re unsure whether or not you’re require a license, consult this site.
Bear in mind that permits can cost anything from $50 to hundreds of dollars, so factor these crucial costs into your budget before applying.
6. Set Up the Shop
A crucial part of any supplement business is opening a supplements shop online, which allows customers to see your products and place orders. When setting up the shop, consider what you’ll use to create it. Most first-time small business owners use eCommerce platforms like Shopify, BigCommerce and WooCommerce, which allow you to create a website from scratch with minimal experience.
Once you’ve set up the shop, consider how you’ll market it. It’s also worth adding extra content to the online shop beyond just the products. Having a blog, for example, can improve SEO and drive more traffic to your store.
6.1 Define the Pricing
Pricing is important, but it’s okay if you don’t get it absolutely right the first time. Look at competitors’ sites to see how much their products cost, and market yours as either a more affordable option or a more luxury option.
If you want your brand identity to be luxury, opt for a higher price point, but don’t price your products so high that nobody can afford them. The same goes for pricing your products low. Price them at an amount where they will sell in high volume, but don’t compromise your profit margin. If in doubt, discuss with family and friends how much they’d pay for items from a supplement shop.
6.2 Create an Online Store
While you can create a physical store later down the line, creating a supplement business online is the easiest way to get started and it requires very few upfront costs, unlike a brick-and-mortar shop.
You don’t need any online experience to create an eCommerce store. The best way to create one is to use an eCommerce platform like Shopify. With Shopify, you can create a store that matches your brand identity and has a customizable checkout and other features and functionality. Plus, you can add integrations and apps to your eCommerce platform for extra features such as pop-ups and email subscription boxes.
6.3 Order Inventory
Once you’ve launched your site and are ready to start selling to customers, it’s time to order your inventory. Promising products to customers before they’ve arrived with you can cause problems for your customer service, so check with your supplier exactly how long the inventory will take to arrive.
Create a countdown on your online store for the date your products arrive in stock to create a sense of excitement and anticipation in customers. Don’t order too much in case you can’t sell it – opt for enough stock to make about $2000 worth of sales, then order more when you’ve met this goal.
7. Reach First $1,000 in Sales
Thinking of the long-term plans for your supplement brand can be incredibly overwhelming, so to start, simply focus on making $1000 in sales.
To do this, reach out to your friends and family and ask them to buy your products and leave you a review on your eCommerce website, Google, or a third-party review site.
Create a free social media account for your business and follow lots of people in the hope they will follow you back, and you can promote your products. Send supplements to content creators for them to try and ask them to post them on their Instagram stories for publicity.