If you’re looking for a business idea, and especially one that can be run primarily online, you might consider supplements. The supplement industry is huge and continuing to grow, but there are things you need to know, especially when it comes to legal liability and marketing and advertising rules in this industry.
You often hear about product liability cases stemming from supplements and similar products, so you’ll need to legally protect yourself as someone who operates this type of business.
The following are some things to know about starting a supplement business.
Product Liability in the Supplement Industry
Product liability is a part of the law that relates to responsibility for putting certain products on the marketplace, and it determines who is liable if someone is injured or becomes ill because of using said product.
If a defective supplement were to cause injury to a consumer, the manufacturer, the distributor, the wholesaler, or the retailer could be potentially held responsible.
If you’re going to start any kind of supplement company, you should talk to a lawyer about how to legally structure it to give yourself the most protection.
Things to be aware of, aside from liability and business structure, include what kind of insurance will best suit a supplement business, and you’ll also need to look at tax implications.
If you’re going to sell to customers located outside of the U.S., you’ll have to make sure your products are compliant with other country’s laws.
There may be a combination of state and federal licenses you need to start a supplement company, depending on where you live. You should visit the Small Business Administration website to figure out what could be relevant to your possible new business.
The FDA does have strict guidelines that dictate how you can sell dietary supplements.
When it comes to where you’ll get the supplements you ultimately sell, you have a few different options.
If you’re willing to make an upfront investment, you might make your own.
You will have to source your ingredients or work with a company that helps customers create supplements.
If you’re going to make and sell your own supplements, you’ll need additional insurance and certifications.
Other options as far as sourcing your products can include drop-shipping or private labeling.
With drop-shipping your upfront costs are minimal. You sell products without ever physically having them.
When you make a sale, you let the drop shipper know, and they send it to your customer.
With private label supplements, you can partner with a company that has existing product formulations, and they’ll customize the labeling so that you can sell it as your own.
Regardless of the particular route you take, you need to make sure you choose the best possible supplement manufacturer.
When you’re choosing a manufacturer, keep the following in mind:
- Ask the manufacturer how they source ingredients, how much testing they do, and what their quality control process is like.
- If you’re going to make your own formulation, or you’re going to go with the private label option, you’ll need to talk to manufacturers about their minimum order requirements.
- You should do a background check on the manufacturer and make sure there are no complaints about their products or services.
- Ask the manufacturer if they have NSF compliance, and if so, verify. The NPA is the only other organization providing certificates to supplement manufacturers.
- Is the manufacturer turnkey? This means they can help you with everything including not just testing but the packaging, labeling, and distribution.
- Is the manufacturer based in the U.S.? It’s best if they are because they’re going to understanding the rigorous U.S. regulatory requirements.
- Talk to any possible manufacturers about the regulatory environment surrounding supplements, and make sure they’re knowledgeable in this area.
Regardless of your business model, it’s extremely important that you know the science behind your supplement, and a lot of that information is going to come from your manufacturer.
Creating a Label
When it comes to creating a supplement company, one of the most important things you’ll do is create your label. The label is critical from both a marketing and regulatory standpoint.
A supplement label has to follow all FDA guidelines. It should have a full list of both the active and inactive ingredients it contains.
You want to create a logo that’s going to reflect your brand and help you stand out among your competition.
Give yourself time, and speak to an attorney about your supplement packaging. You have to be careful about the claims you make and how you label every ingredient as well as with warnings you might need to include.
How Will You Sell Your Supplements?
Beyond legal considerations and sourcing, as you’re building a business, there’s a lot to consider, including how you’re going to sell your supplements online.
You can use a platform like Shopify to create an online store and then sell directly to your customers. You can also use social media, or you can go through Amazon. Most supplements do a combination of all of these.
Selling supplements can turn into a huge business, but there are some common mistakes you want to avoid.
First, you need to have a targeted audience before you do anything with your business. If you don’t know your audience, you might not source the right products or market them appropriately. Creating a highly specific target audience is something you should do first because it’s going to drive most of your other decisions.
The next mistake supplement entrepreneurs often make is not taking the time to understand FDA policies. They control everything you’re going to do in this industry, from manufacturing to labeling.
Finally, you don’t need to spend too much time trying to be the first at anything. You don’t have to be the only one to offer your product. You can do things in a unique way and still sell a supplement that’s otherwise available.