There are a lot of details involved with building a new supplement formula, and it’s easy to only focus on the cost of the final product.
We recommend that before you launch into the formula process that you spend time considering the other costs that are less obvious, especially when you are just starting.
So, here’s the big picture.
1. Market Research
Before you start formulating a new dietary supplement, it’s helpful to start with market research to ensure you are creating a product that people will buy.
The first step is creating your buyer persona. Essentially, you’re going to outline the target market including their pain points, how your product will help with an unmet need and questions they might have through the buyer’s journey.
Next, you have to engage your audience by talking with them. You could hold in-person focus groups. You can also create online surveys or host phone interviews.
The people in these groups should fit in your target market, they can be current customers, previous customers or individuals you find in your network. Typically, you’ll need to provide some type of incentive to the participants, so you’ll need to budget for market research.
More importantly, market research takes time, so you’ll need to determine a time budget as well.
2. Product Labels
Product labels are crucial to the success of your brand because a lot of customers do judge a book by its cover.
If you’re not a designer, you’ll probably need to outsource label artwork to ensure the finished product looks professional, but the process doesn’t end there.
You’ll need to run a regulatory check, buy a UPC code registration and ensure the final design is compliant with international regulations too if you plan on shipping your brand overseas.
Designers can charge by the hour or by project, and the prices may vary widely. Your budget will be based on who you choose to do the work and their rate. It’s important to consider designers familiar with both national and international regulations.
“Build it, and they will come” is not an effective strategy in the supplement marketing industry.
Reaching your target audience might include product marketing sheets, white papers, online product descriptions for Amazon and other online retailers, keyword research, blogging and social media management.
Marketing will either cost time or money. It might help if you outsource the work to an experienced team, so you don’t slow down your launch date or limit the growth of your brand.
If you aren’t investing your own time into the content creation, your marketing team may charge by project or a monthly retainer fee for services. Marketing can cost as little as a few hundred for a couple projects or several thousand a month depending on the extent of the work.
4. Website Design and Branding
Along the same lines as marketing, you might need to hire a designer to help with creating your brand identity, logo or website.
Website hosting is cheaper now than it was several years ago because you can launch a Squarespace, Wordpress or Wix site for as little as $144 to $180 per year. However, you’ll have to design the website.
If you’re not experienced, outsourcing a new website could cost $1,000 to $5,000 (or even more). There are cheaper options, but typically these options are limited on the website’s robustness.
5. Distribution Costs
Finally, after you put in all the hours creating the product, you’ll need to budget distribution costs.
You’ll need items such as Certificate of Free Sale (COFS), import country registration and approval, shipping and warehousing logistics.
Where are you going to store your products? How much will storage cost? Are you going to use programs like Fulfilled By Amazon (FBA)? What can you expect in shipping costs?
At the end of the day, a new supplement is more than just a product, it’s also your business, which means you’ll likely need to consider any normal business expenses.
At Ameri-Kal we can help you launch your brand from start to finish. Meaning, we can help you register a UPC code and outline shipping and warehousing logistics and everything in between.
We can partner with you to make your custom dietary supplement formula successful and profitable.
If you want to speak with a product expert right away, then call us at 405-225-1804 for a discovery meeting.
You can also download our free financing worksheet so you can continue crunching numbers to determine what’s best for you next custom formula.