Is it Possible to Sell a Clinically Dosed Product?

In the Sports Nutrition industry, creating a clinically dosed product is the right thing to do.  You can go to sleep at night knowing your customers are getting a quality product without fillers or small quantities of effective ingredients.  However, to create products like this you either have to be prepared to operate on small margins or you have to price your product outside of normal category prices to maintain a healthy business model.

I’ve found that today’s online consumer does their search based on price…..period.  Large specialty websites are well aware of this, which is why you always see merchandising of low priced product and/or aggressive promos for products that definitely don’t live up to an effective product standard, in most opinions.

So how can you create a high-quality product and sell it effectively to maintain a healthy business?

  1. Increase your direct to consumer business.

If you have a very good product, boost your direct sales.  This is done through strong lead generation, effective social media marketing, an active website and creating quality content.  You can safely price your products in category standards (ex Pre- Workout $29.99) if you are selling directly from your website.  This price may be impossible if you are trying to sell through distribution, Amazon (with their fees) or any other ecommerce site with their discounts off of wholesale.

  1. Double down on the marketing.

If you want to clinically dose your product and work with resellers, you must come in with a plan of how to market it.  In fact, you should do several months’ worth of marketing prior to the release to see what kind of interest you can generate in the product.  If you have to sell a pre-workout, for example, at $39.99 to make solid margins through resellers, you need to make sure people want this product prior to its release otherwise you won’t have any resellers.  Creating quality content is key.  When selling through the internet you need to rely on video as your sales rep.  Educational and entertaining videos may just be enough to get someone to spend an extra $10 on a high quality pre workout with 10 less servings.  Getting a manager at a brick and mortar store to push your product may be a challenge, so don’t bank on it.  Consumers don’t go into the store to browse any longer, they go in with an agenda because they’ve done their homework already. Create a scenario where they go into shops asking for your product.

In summation, don’t create a clinically dosed product unless you have a strategy to take it to market.  Sure, creating these types of products is the best thing to do, but be sure to have a B2B and B2C strategy and if at all possible generate enough content prior to the release to get people lined up to buy.  This will not only help direct sales, but will generate enough interest on the reseller level where you don’t have to chase down customers.

 

Reverse Engineer Your Cost Of Goods

Bringing a sports nutrition product to market requires more than just a good formulation.  Some of the best formulated products don’t even make it through their MOQ’s before they hit expiration dates.  Why is this?  If I make the best product the market has ever seen, what’s the hold up?

Too many new companies try to start categories or create product before they completely understand what the consumer will pay.  The internet has given us the best resource to price out similar products to get an idea where we need to price our products competitively to give it a fighting chance.

If you’re a new company or a part of a lesser known brand your best way to storm into the market place is with low cost goods and an aggressive price point.  As you build brand loyalty, then you’ll have an opportunity to introduce products priced above category standards.

Few things to keep in mind when starting your discovery process.

  1. What does the market dictate for a product formulated similar to yours with the same amount of servings?  
  2. Does your product have a larger market presence than that brand?
  3. If yes, go ahead and add a premium tag to it.
  4. If no, you have to come in lower.

When selling directly B2C, there aren’t many other factors to consider other than, if you want to run promotions, will you still maintain healthy margins?

When selling B2B, this is where your COG is going to play an important factor.  There was a time when wholesale cost was wholesale cost, but through the manipulation of the industry, discounts have since been applied to wholesale where brands extend deeper discounts to those accounts that can move higher volumes.

In addition, in the .com space, promotions influence sales. If you want to play ball with the likes of a Bodybuilding.com, you need to be prepared to give discounts of 35% or more off of wholesale and create situations where the product can be promo’d at 20-50% below that to gain any type of merchandising space.

This all has to be done within your MAP pricing, which needs to be set in line with the competitors in each category.  

This may be enough info for you to bail out and look at another line of work because being able to get product at the price you need to remain competitive is extremely difficult when starting out.  With this in mind, if you are a smaller brand with less access to funds or resources, start with a direct to consumer model.  If you can grow your following, you’ll have retailers connecting with you and you can control the market.