How to Sell Supplements Online
A business owner selling supplements online
Credit: Adaptiv Payments
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The online supplement industry has become extremely lucrative as more people seek to develop healthy lifestyles on busy schedules. Selling supplements online requires developing the right market model, adhering to product-compliance guidelines, and choosing a payment platform that understands the market.
IBISWorld market research suggests that US online supplements are now worth $25.6 billion, driven by the rise of direct-to-consumer sales channels. The industry's expected CAGR is 3%, representing significant growth and the opportunity for major profits.
However, the industry is still considered high-risk due to strict guidelines on supplement advertising and high chargeback rates. To sell online, you need to balance compliance with quality marketing and inventory management.
Define What You Sell and How You Sell It
Supplements are a range of vitamin products or dietary supplements intended to fill dietary gaps or support sports nutrition. Selecting your niche makes it easier to sell directly to your target market while ensuring you continue to produce high-quality supplements rather than overextending.
Multivitamin Dietary Supplements
Selling vitamins online can include products like Vitamin C, Vitamin D, magnesium, zinc, and iron combined to address nutritional gaps. These may be gummies or pills.
Single-Vitamin Supplements
Designed for individuals who are deficient in a specific vitamin, these are often easier to produce because of widely available formulas. Depending on whether the vitamin is water or fat-soluble, these can be formulated as oils, drops, powders, or other forms.
Functional Blends
These are made to address specific issues, like improved focus, relaxation, or hormonal support.
Collagen and Protein Supplements
Collagen and protein are essential for hair, skin, nails, and muscle growth.
Whether you're making prepackaged protein shakes, whey protein powders, or vegan-friendly protein products, these help individuals meet their protein goals for overall health or fitness.
Pre- or Probiotics for Gut Health
Unlike vitamin or mineral supplements, probiotics and prebiotics include fiber and bacterial cultures to enhance digestion.
Stress, Mood, and Sleep Support
Supplements that relieve stress, enhance mood, or improve sleep quality may include ingredients like ashwagandha, melatonin, or magnesium.
Men's or Women's Health Supplements
Typically, these cater to hormonal issues and may include different ingredients suited to different stages of life. Key tips for these categories are to avoid making diagnostic claims and to prioritize "whole-body wellness" rather than claiming to completely resolve hormone imbalances.
Pre-Workout and Performance Nutritional Supplements
These supplements contain ingredients such as creatine and amino acids to boost performance and reduce muscle fatigue.
Herbal Remedies
For those seeking a more natural approach to medicine, herbal supplements such as ginseng, echinacea, or red yeast can support whole-body health. These may be powders, tinctures, oils, or pills.
Next, you'll want to consider how you will sell your supplements, which often breaks down to one-time DTC vs bundles vs subscriptions/autoship vs wholesale.
| One-Time Direct to Consumer (DTC) | Bundles | Subscriptions or Autoship | Wholesale | |
|---|---|---|---|---|
| Sales Model | Individual supplements marketed to individuals | Formulated packages that work synergistically | Recurring billing for supplements, often using | Selling to distributors, retail stores, health stores, and grocery stores |
| Platform Examples | Specialized platforms;selling vitamins on Facebook Marketplacemay not be possible | Supplement website to allow customizable bundles | Supplement website for convenient billing and subscription management | Wholesale selling platform |
| Merchant Account Type | High-risk merchant account | High-risk merchant account | Subscription merchant accounts for repeat purchases | International merchant accounts for global distribution |
Understand FDA Approval and Licensing Requirements
You must carefully consider licensing requirements to sell supplements online. You'll need a general business license and manufacture your products at an FDA-registered facility. The facility must meet Good Manufacturing Practices (GMP) standards, including material sourcing, facility cleanliness, and well-maintained equipment.
The Dietary Supplement Health and Education Act requires you to notify the FDA if your product label makes health claims, such as improving immune function. This typically must be done within 30 days of product launch.
Most online platforms require you to provide third-party product testing to demonstrate that your supplements are safe, made with food-grade ingredients, and free of harmful chemicals.
Choose a Manufacturing Model
First, consider whether you want to use a private-label manufacturing model or create custom formulations. Private-label means you sell products produced by a third party with your supplement brand on the label. Custom formulations mean you produce the product yourself according to your specifications.
| Private Label | Custom Formulation | |
|---|---|---|
| Upfront Costs | Low | High due to development and testing |
| Formula Flexibility | Limited to existing formulations | More control over ingredients and dosages |
| Documentation Requirements | GMP and Certificates of Analysis (COAs) | Development and testing records |
| Market Differentiation | Low; the formula will be similar to others on the market | High; a unique blend of supplements |
| Launch Speed | Fast; formulas and facilities already exist | Slow; must develop the formulas and receive approval |
| Operational Challenges | Low | High due to development and testing |
Consider what format you will use for your products, such as powders, oils, tinctures, pills, or gummies. Some potential customers may prefer a convenient pill or gummy format, while others would like more control over dosing and would choose a powder or oil.
Sourcing high-quality ingredients is essential. Look for third-party testing and research the suppliers to ensure they have a clean manufacturing record.
If you have a custom formulation, consider which vitamins and minerals work well together and which ratios are best for it. Certain types of formulas are more bioavailable than others, which needs to be explained to your customers.
Labeling requirements are often the most challenging aspect. Proper labeling should include the following information:
- Product name and dosage form, like powder or oil
- Net quantity
- Supplement Facts with active ingredients
- Serving size with daily values
- Manufacturer contact information
- Allergen warnings if necessary
You cannot make claims that your product can diagnose, cure, treat, or prevent any disease, but you can explain the product quality and its intended purpose.
Calculate Costs and Profit Margins
Selling supplements online requires you to develop a reasonable sales framework. These are the common cost drivers:
- Ingredients: Sourcing, purity, testing requirements, and active levels
- Packaging: Material types, minimum order quantities, and customization options
- Testing: Third-party lab fees, contamination, purity, and active levels
- Minimum Order Quantities (MOQs): For your materials and finished products
- Freight and Storage: Warehousing, shipping fees
You'll also want to consider factors such as packaging design, artwork, additional testing for formula differences, packaging adjustments, and storage and fulfillment requirements.
Once this is complete, build a cost-of-goods estimate with manufacturers and suppliers to determine a reasonable margin. Typically, 10% to 20% margin is considered acceptable in this industry.
Operational Considerations (Quality Control and Fulfillment)
Quality control and fulfillment for supplements company
Credit: Adaptiv Payments
Sustainable growth requires carefully managing inventory and ensuring a smooth fulfillment pipeline. One of the major considerations is choosing self-fulfillment versus third-party logistics.
Key things to consider in this realm include:
- Order Volume: Self-fulfillment is suitable for steady, low-volume sales, while third-party logistics can handle volume spikes.
- Cost Structure: Self-fulfillment means fixed costs, while third-party logistics is more scalable depending on shipment needs.
- Shipping Speeds and Geographic Reach: Third-party logistics can speed up shipping and allow you to enter new markets. Self-fulfillment is often slower and better suited for smaller markets.
Self-fulfillment can work for a small, boutique company, but you may find that your sales volume outgrows your capacity. It also means you will spend a significant amount of time on logistics. Sudden volume spikes can lead to payment holds due to suspected fraud.
You will need to provide proof of fulfillment to customers, which includes packing quality assurance, shipment tracking, and delivery confirmation. This may be simpler when using third-party logistics, as they will have shipping and tracking as part of the service.
Returns are a necessary part of any business. Develop a strong returns policy that explains what can be returned, such as requiring the package to be sealed and unopened. Clarify when you refund customers, the average timeline for returns, and how you document a refund.
Understand Marketplace Requirements
Starting an online supplement store requires understanding which marketplaces allow you to sell and what kind of requirements they have for approving products.
While selling supplements on Shopify is possible, your products must be approved by the FDA and meet strict quality guidelines.
Selling vitamins on Facebook Marketplace is prohibited, but you can still advertise on social media platforms, such as by promoting seasonal discounts or sharing testimonials.
The best option is to set up your own site with a supplement merchant account. This avoids common issues with selling supplements, like sudden account restrictions.
Ensure you develop a mobile-friendly site with comprehensive product descriptions and testing information. Your payment processor will want to see that you have strong policies to address customer concerns and will check COAs before underwriting your account.
Set Up Payments
When setting up payments, you will need to develop a smooth operational process, including clarifying your response times.
Develop clear ticket categories, such as delivery issues, negative reactions, cancellations, or refund requests, to stay compliant with regulatory guidelines.
Proactive messaging can reduce disputes and help maintain your banking relationships. Reach out to customers about shipping delays and set up auto-reminders for subscription billing. Confirm refunds as soon as possible.
Chargebacks can be both expensive and damaging to your brand. Prompt refunds will be less costly than chargebacks while also demonstrating goodwill to your customers.
Your payment processing decision can make a significant difference in operational success. Adaptiv Payments offers merchant accounts for high-risk industries, based on the unique needs of your business model. Our comprehensive underwriting process means you are less likely to face sudden account terminations while also ensuring that we offer customized service that meets your operational needs.
We provide secure, PCI-DSS-compliant payment gateways to protect you and your customers from fraud, along with real-time fraud monitoring. Our international payment processing enables you to expand your brand's reach with lower transaction fees and multi-currency wallets.
Our industry experts understand the challenges of selling supplements and can advise you on common processing issues to ensure consistent cash flow. Contact us today for a free quote and learn more about how we can help your business grow.
