How to Start a Supplement Company

If you're wondering how to start your own supplement company, this guide on starting a supplement company is best for you.

As Americans have become more health-conscious, the Vitamin and Supplement Manufacturing industry has grown over the five years leading up to 2021.

Over the five years to 2026, IBISWorld expects industry revenue to grow at a faster-annualized rate of 2.1 percent to $39.6 billion.

Do you have a passion for supplements and nutrition? Are you always looking for the latest and greatest way to improve your health? If so, then you may be thinking about starting up a supplement company.

This can be a great way to share your knowledge with the world and help people improve their health. But it’s not as easy as it sounds. There are a lot of things to consider before you get started.

In this article, we’ll discuss some of the things you need to think about before launching your own supplement company. So read on, and learn how to start a supplement company successfully.

Step 1. Find a product that is in high demand and will add value to people's lives

When it comes to building your niche in the supplement industry, you should consider your own needs first. Since people are heavily invested in this market, they underutilize the health benefits inherent in vitamin supplements.

There are numerous types of supplements available, and you must first decide which one(s) you want to produce before proceeding. Certain markets will almost certainly be more profitable than others.

The best place to begin is with a valuable product that assists customers in achieving their goals and fulfilling a purpose. Weight loss, muscle gain, improved memory, and, of course, overcoming a deficiency are all obvious markets.

Step 2: Select your audience

When starting a supplement company, determining and selecting your target market is a good place for starting a business. You must be certain that buyers will want to purchase your supplements; otherwise, they will collect dust on shelves or in warehouses.

Consumers have never been more health-conscious than they are now, and demand for health and fitness supplements is only expected to rise. However, focusing solely on “health-conscious people” or even “health-conscious men” is too large an audience.

The more specific your selection the better it is, as it allows you to concentrate your marketing efforts on a smaller group of people who are more likely to purchase your goods.

You can spend more time identifying your target audience’s pain points, needs, and even who they’re currently buying from by getting specific with them, which will make your marketing efforts even more compelling.

Step 3: Calculate how much money you'll need.

A supplement company can be started for around $6,000, but business owners who have $10,000 to invest will have a much easier time. Business owners can usually get the following with $6,000:

150 bottles of a dietary supplement
Labels that have been professionally designed
Small business insurance
A website

Supplement company owners should look for a supplement manufacturer that is NSF-certified, GMP-Certified, and FDA-registered when choosing a supplement manufacturer.

A certificate of analysis for each batch should also be provided by the manufacturer, proving which components are present in each batch. These manufacturers aren’t always the cheapest to work with, but they provide guaranteed products that a company can rely on.

Few manufacturers meet these requirements, and even fewer accept initial orders of only 150 units. With a total of $10,000, business owners will be able to place larger initial orders in order to meet manufacturers’ higher initial orders.

Label design costs should not be overlooked by business owners. Most customers choose supplements based solely on the packaging, so having a professionally designed label is critical. Professional logos can be created for between $300 and $500.

Recommended: Explore how Logo Designer at Wise Business Plans can create strong brand identities, manage effective branding collateral, and tell your brand’s story with consistent branding.

Step 4. A comprehensive analysis of competitors

The analysis of competitors is a crucial component of the puzzle. Simply put, if a product does not stand out from the crowd, it will not sell. Being good isn’t enough on its own. You’d have to duplicate your competitors’ successes while avoiding their blunders.

It’s time to start recording the following information about your competitors and their products in an Excel spreadsheet.

After you’ve finished filling out your spreadsheet, there are a few things you can do to set your product apart from the competition:

Price – It’s difficult to get right, but it’s tried and true. Even if the difference is minor, large volumes frequently go to the lowest bidder. Just be aware that the margins will be razor-thin. (At the end of the day, it may be less than $1 per bottle.)
Find a new customer segment – There may be a group of people who are unaware of a product because it is never marketed to them in a way that they can relate to. Athletes, seniors, and people who follow a strict diet are all examples of this.
Find an ingredient to eliminate – To make a particular product, an undesirable (or less popular) ingredient is frequently required (because it has to come from a certain source).

The goal is to uncover a detail in the product development process that other organizations choose to ignore or cut out (for good reason, of course — you’ll have to conduct some study to find out). This is your chance, astute entrepreneur, to go all-in and show your dedication to your product and your target market.

Step 5. Create your own product

It’s time to start designing your product after settling on your market and determining what already exists in that field. Whether you’re inventing the formula yourself or cooperating with a private label supplement manufacturer, formulating your new product can be an exciting step in the process.

You may produce a really distinctive and effective product by combining the demands of your intended customers with your company’s ideals. If you’re starting a supplement company without the support of a manufacturer, it’s probably advisable to stick to one or two products at first.

A restricted focus will allow you to focus on creating the right product, and a higher-quality product will perform better than one created with minimal care or effort. Starting small doesn’t imply you’ll stay tiny forever; taking the time to lay a solid foundation ensures your brand’s scalability and long-term viability.

Step 6. Choosing a brand name for your dietary supplement

It is the initial calling card, regardless of whether it is the real product or the supplement brand name, and it must be chosen with care.

Brand-name supplement ideas that usually work:

The titles of your health supplement companies should be simple, sweet, and relevant.
Consumers will be able to recall your product faster than competitor products if you have a set color palette.
A distinct and consistent voice that is relevant to your target demographic and consumer group will undoubtedly bring value to your brand.

When it comes to supplementing names, what should you avoid?

When deciding on a name for your supplement firm, you need to take certain measures.

Run the supplement company names through a search engine to see whether they’re possible. Even though the name sounds unique to you, it’s possible that other businesses with the same or similar names already exist.
Make sure the supplement company names you choose aren’t too similar to those of your competitors. You surely want a name that is specific to your brand and mission.
Make certain that the name you pick for your company has no bad implications.

Recommended: Learn how to choose a business name

Step 7. Create a legal entity

Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations are the most frequent types of companies. Forming a formal company, such as an LLC or corporation, safeguards you from being held personally accountable if you are sued for your supplement business.

Find out how to form an llc yourself

Learn about llc formation, including information on registered agents, naming rules, business licenses, and more.

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Step 8. Determine which supplement manufacturer is best for you.

What To Look For When Choosing A Supplement Manufacturer

Finding the right manufacturer can be difficult. Fortunately, you’ve come to the right place. We’ve compiled a list of our top recommendations for finding the best supplement manufacturer.

Keep an eye out for the right certifications
One of the most important things to look for in a supplement contract manufacturer is certifications and the ability to comply with import regulations. Look for basic certifications that demonstrate the manufacturer’s trustworthiness. Look for cGMP (current good manufacturing practices) compliance, which is overseen by the FDA and frequently third-party verified by NSF or NPA.

Check to see if there are any minimum order requirements
Another thing to consider when choosing a manufacturer is what their minimum order requirements are. Most manufacturers will require a minimum of 1,000, but it is frequently more than that. You’ll want to think about this carefully depending on the size of the orders you’ll be placing and make sure the minimum order requirement isn’t too high for your needs.
Learn about the various fulfillment options available
The majority of start-ups will require assistance with supplement fulfillment. If you’re in the same boat, you’ll want to know what to expect from the manufacturer ahead of time. Find out what packaging, shipping, and storage options they have. In all three of these areas, a great manufacturer will be able to assist you.

Find out how long it takes for a product to be made
When evaluating a manufacturer, you should also inquire about their lead times. To properly evaluate this, it can be a little more difficult than you might think. Even though you might think that shorter lead times are better, you don’t always want to go with the quickest option.
If lead times are unusually short, it could indicate that a manufacturer isn’t doing its job properly. They could be cutting corners in some aspects. As a result, you’ll want to ask some follow-up questions to learn more about the process.

Inquire about options for research, development, and formulation

You’ll also want to find out what kinds of research, development, and formulation options the supplement manufacturer offers. The manufacturer should have a fully qualified research and development team ready to assist you with testing and documentation. The team should also have a fantastic lab where they can conduct all of their development and research to ensure that they’re assisting you in meeting your goals.
Dietary supplement formulation can be difficult to perfect, so choosing a manufacturer who can assist you with the design process can be extremely beneficial.

Look into the various supplement manufacturing options
You should also learn about the various manufacturing options available for your supplements. First and foremost, inquire about the types of supplements they can create for you. Check to see if they can produce capsules, tablets, soft gels, and powders. Manufacturers may only be able to make one type of supplement, depending on their capabilities.
Inquire about their options for dealing with ingredients as well. Determine whether you will be able to purchase the ingredients on your own and store them in their designated area. You should also inquire about the ingredients they already have on hand. Ingredient sourcing is a critical link in the supply chain; learn how your ingredients will be sourced and validated for quality from the manufacturer.

Look for a supplement company based in the United States
They are familiar with the stringent regulatory standards in the United States and are less likely to surprise you with unexpected costs.

Step 9: Create your personal brand

The most creative and challenging aspect of starting up a supplementary company is often developing a brand. Your product, as well as your target audience, should have an impact on your company’s branding.

If you’re creating an all-natural supplement for homeopathic consumers or pledging to be an environmentally conscious company, you might want to consider using eco-friendly packaging to reflect your values. When creating a brand, make sure to look into the requirements for supplement packaging.

Step 10. File your taxes

Before you can start a supplement company, you’ll need to register for some state and federal taxes. You will need to apply for an EIN to register for taxes. It’s really simple and completely free!

Taxes on Small Businesses

Depending on which business form you choose, you may have different taxation options for your company. Some LLCs, for example, may benefit from being taxed as an S corporation (S Corp).

These resources will help you learn more about small business taxes:

Step 11. Starting a supplement company: legal requirements

The Dietary Supplement Health and Education Act of 1994, enacted by the US Food and Drug Administration (FDA), imposes strict controls on the manufacture and sale of dietary supplement products. Because nutritional supplement laws differ from those that apply to traditional medications and foods, supplement makers are legally obligated to follow all of the rules and guidelines established by the Dietary Supplement Health and Education Act of 1994 (DSHEA) and the FDA.

Before being utilized in a product, all new dietary ingredients introduced after 1994 were required to file a new ingredient notification to the FDA. You should also make sure that the contract manufacturer you choose uses GMP (Good Manufacturing Practices) accredited facilities.

Before launching a supplement line, it’s a good idea to look into the legalities of doing so.

Step 12: Developing a supplement label

The aim of a label, on the surface, is to tell the consumer:

1) What the product is.
2) Who created it.
3) how much of the product is in the box. Isn’t it simple?

You must adhere to certain criteria set forth by the country in which you plan to market your product. The FDA oversees all supplement products in the United States, so you’ll need to follow their requirements while writing your label.

When it comes to following FDA criteria, reputable manufacturers run a tight ship and should be a fantastic partner when acquiring information for your labels.

Step 13: Create a bank business account and credit card

Personal asset protection requires the use of dedicated business banking and credit accounts.

If your personal and business accounts are intermingled, your personal assets (house, car, and other possessions) are at stake if your company is sued. This is referred to as piercing the corporate veil in business law.

Furthermore, learning how to build credit can help you obtain credit cards and other financings in your company’s name (rather than your own), lower interest rates, and increase credit lines, among other benefits.

Open a Bank Account for your business

Aside from being a requirement when applying for business loans, opening a business bank account provides the following benefits:

Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
It makes tracking expenses easier and more organized.

Recommended: To discover the greatest bank or credit union, read our Best Banks for Small Business review.

Create a Net 30 Account

Net 30 Payment Terms are used to establish and grow credit for businesses as well as boost cash flow. A net 30 account allows firms to purchase items and pay for them in full within a 30-day period.

The major commercial credit agencies receive reports from several of the net 30 credit providers (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how companies establish company credit in order to get approved for credit cards and other lines of credit.

Recommended: Read our list of the top net 30 vendors guide to start getting business credit or simply open your net 30 accounts with wise business plans in seconds.

Get a Credit Card for your business

Obtaining a business credit card benefits you in the following ways:

Put all of your company spendings in one location to separate personal and business expenses.
Build your company’s credit history, which can come in handy if you need to raise money in the future.

Pro Tips: Check out our list of the 11 best business credit cards and decide which one is best for you.

Step 14: Obtain business insurance

Insurance, like licenses and permits, is required for your business to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.

There are a variety of insurance policies designed for various sorts of organizations with various risks. If you’re not sure what kinds of dangers your company might face, start with General Liability Insurance. This is the most frequent type of coverage required by small businesses, so it’s a good place to start.

Workers’ Compensation Insurance is another important insurance product that many businesses require. If your company employs people, it’s likely that your state will require you to carry Workers’ Compensation Insurance.

Pro Tips: Do you want to learn more about business insurance? You can read a comprehensive article about 10 types of small business insurance and how much small business insurance costs.

Step 15: Supplement marketing strategies

In today’s competitive nutraceutical business, high-quality products with appealing packaging and effective supplement marketing methods are critical.

How Should You Promote Your Supplements?

Concentrate on the needs of your customers:
When marketing nutritional supplements, keep in mind that your health product should satisfy the needs of your clients. Encourage, gather, and evaluate client feedback to learn more about this. Be open to constructive criticism as well as positive suggestions. Customer loyalty is valuable and deserving of recognition.

Labeling and packaging should be appealing and compliant:
72 percent of purchasing decisions are influenced by labeling and packaging. Color schemes, graphics, fonts, and simple, FDA-compliant labeling and packaging are all important in capturing customers’ attention.

Promote your dietary supplements on the internet:
It’s the Internet age, and you and your goods require a strong online presence. Create mobile and user-friendly websites, e-mails, paid marketing, affiliate marketing, and Amazon-sponsored promotions to promote your supplements online.
Recommended: Always hire a professional business website design company to show your supplement to the internet world.

Use fans, celebrities, and influencers to your advantage:
The loyal fan base of your goods accounts for 80% of your profit. Interacting with them directly and making them feel special is worthwhile, as it will build their bond with your business.
Choose an up-and-coming athlete or social media personality (rather than an established one) with a large fan base for your supplement promotion. It will fit within your budget while also benefiting your brand in the long run.

Advertising that is adaptable could be the key!:
Adopt a variety of creative and successful marketing strategies for your product. Create video marketing, magazine and radio advertising, or even grassroots advertising by placing fliers in gyms, spas, salons, and clinics’ receptions and waiting rooms, depending on your budget. These are the sites where the majority of your target audience may go.

Use social media to your advantage:
The modern consumer is heavily reliant on social media, with over 80% of Americans owning at least one account. When it comes to developing a supplement marketing plan, online marketing is critical.

Brand awareness and consumer loyalty are aided by clever supplement hashtags.
Observe an increase in conversion rates.
Save a lot of money on your advertising.
Recognize cross-promotional possibilities:
By identifying and utilizing different consumer niches for a single product line, you can tap into a large potential market. Veganism, for example, is practiced by 2.5 percent of all Americans. Vegan products can also be promoted to vegetarians, flexitarians, and traditional clients, in addition to this group.

The Importance of Offline Marketing:
Offline marketing, particularly print and broadcast media, continues to play a role in the promotion of your dietary supplement. Customers can be educated about dietary supplement items through television, radio, newspapers, and magazines. While physical businesses can aid in sales, promotion, and advertising, word-of-mouth recommendations always generate excitement.

Step 16: Start selling now!

It’s finally time to start selling your product after all of your hard work, money, and effort!

Here are some considerations to bear in mind:

5 Key success factors

Production of market-preferred items: Because many consumers get nutritional supplement advice via the internet, word-of-mouth recommendations, and doctors, companies must change their product mix to keep up with fast-changing consumer desires.
Possessing knowledge of marketing: Marketing can greatly increase demand for a given product due to the wide selection of products accessible on the market.
Distribution arrangements under control: Companies with effective and wide distribution networks, from raw material distributors upstream to wholesalers and retailers downstream, are more likely to maintain and grow market share.
The ability to understand and navigate regulatory restrictions: To prevent fines and possibly litigation, this industry must stay on top of FDA regulations, forthcoming supplement safety legislation, and current good manufacturing practice (cGMP) requirements.
High-quality ingredients are available: Consumer views of dietary supplement quality, efficacy, and safety are strongly linked to demand for industry products. As a result, to generate a safe and effective product, operators must select the highest-quality inputs.

The highlights of our recently developed dietary supplement business plan

Market Analysis Summary: dietary supplement business plan

As Americans have become more health-conscious, the Vitamin and Supplement Manufacturing business has grown over the five years leading up to 2021.

A growth in studies on diet-related disorders has encouraged consumers of all ages to resort to dietary supplements while rising pharmaceutical drug prices have increased media coverage of health and wellness trends.

Due to the increasing demand for health supplements induced by the COVID-19 (coronavirus) pandemic, industry revenue is expected to expand an average of 2.4 percent to $35.7 billion over the five years to 2021, including a 3.7 percent increase in 2020.

Even so, revenue growth is expected to slow to 2.2 percent in 2021 alone, as revenue growth returns to pre-pandemic levels. However, depending on the speed and efficacy of mass vaccination attempts, these estimates may alter.

Product and Services

A wide range of health products are sold in tablet, capsule, powder, or ready-to-drink form by the Vitamin and Supplement Manufacturing sector.

Industry products are intended to supplement a healthy diet; they are not intended to cure, prevent, or treat any medically important ailments. Over the five years leading up to 2021, the product breakdown of the Vitamin and Supplement Manufacturing business has altered dramatically.

While vitamin and mineral supplements were formerly the most popular product category, they currently account for less than 40.0 percent of total industry sales due to rising demand for sports nutrition and herbal supplements.

Frequently Asked Questions

What is the revenue model for a supplement company?

The sale of supplement goods is how a supplement company gets money. Customers can buy products directly from manufacturers or through distributors and retailers.

What is the maximum amount you can charge customers?

Supplements range in price from a few dollars to over $100. The cost of a supplement is frequently determined by the rarity of its ingredients and the advantages it provides.

What is the maximum profit a supplement company can make?

The amount of money a supplement company makes per product sold is determined by how the product is offered. Businesses that sell directly to customers should strive for a profit margin of 10% to 40%. Those who sell through distributors often make a 5 to 15% profit.

How can you make your business more profitable?

By introducing more supplement goods, several supplement companies enhance their sales and profits. A company that starts with a few very unusual supplements can expand to include some more basic supplements that aren’t as imaginative but are nevertheless popular. Customers who purchase unusual supplements are likely to also purchase basic supplements from the same company.
(If companies start with basic supplements and then add distinctive ones, they will struggle to distinguish out in the business. It’s easier to discern a company’s items if you start with the most unusual and work your way down to the most basic.)

Is it necessary to obtain a dietary supplement manufacturing license in order to sell supplements?

Nutraceuticals are subject to extensive regulations to ensure quality and safety, with an increasing number of Americans taking nutritional supplements each year. You must obtain particular permits as a supplement brand owner in order to start your own supplement line; failure to do so can result in heavy fines.
If you want to make your own nutritional formulations and supplements, you’ll need to get your own certificates and insurance, and you might want to speak with a company attorney first.

Alternatively, you can work with a supplement manufacturer who is already accredited and has the resources necessary to manufacture and label your supplement or nutraceutical line. This eliminates the requirement for license and logistics altogether.

How to Start a Supplement Company

If you're wondering how to start your own supplement company, this guide on starting a supplement company is best for you.

Step 1. Find a product that is in high demand and will add value to people's lives

Step 2: Select your audience

Step 3: Calculate how much money you'll need.