This short write-up serves as a guide for you to see how to start up a bodybuilding supplement business. An actual business plan of this nature could reach up to 50 pages, so I’ve condensed it to provide you with an overview.

In the world of sports and bodybuilding supplements there is one constant and that is the hype that is placed on a company’s product. Some companies seem to have a bottomless marketing budget considering all the ads they place on magazines. These same companies claim that their products are often mentioned as revolutionary when they are in fact only evolutionary. Take for example creatine monohydrate, the advent of creatine into the bodybuilding community was hailed as revolutionary and till this day has multiple positive effects on the body. However the jump from creatine monohydrate to creatine ethyl ester is only evolutionary as only an ester molecule is attached to the creatine allowing for better absorption. Most bodybuilding and diet supplements nowadays are of the latter.

So what does this mean?

This means that when a hot new supplement hits the market and actually is revolutionary, you will be able to notice it first from all the positive feedback. Secondly, sourcing similar if not exact products should not be too difficult, as these companies do not produce the raw materials themselves.

So what to do? Here are some basic strategies to start

(The following steps are condensed and some material removed)

The obvious first step is to have an idea. If you need an idea, the easiest way is to look at a competitor’s product and their ingredient profile. Then trace individual ingredients back to their scientific journals on www.pubmed.com. For example purposes, I’ll write that I have an interest in energy enhancers. My workouts are sluggish and I would like to put in more intensity.

The 2nd step is to determine the corporate mission and major corporate goals. The mission of my company (“Company X”) is to provide bodybuilders around the world with limitless energy. Our goal is to have 1 in every 3 bodybuilders in the US recognize our brand.

The 3^rd step is to perform an external analysis of the opportunities and threats. An individual would use Porter’s five forces model, industry life cycle analysis, and the macroeconomic forces to examine the environment. Very briefly, currently there are a few companies with substitute products that contain the same main ingredient as ours; caffeine, geranium oil, and raspberry ketone. There are a large number of buyers with no single source being influential. Conversely, there are limited suppliers to geranium oil, which means we are under their mercy when it comes down to pricing.

The 4^th step is internal analysis of the strengths and weaknesses. We would look at our resources and our capabilities and how this would affect our distinctive competency. This in turn shapes our competitive advantage. The building blocks of competitive advantage include quality, efficiency, innovation, and customer responsiveness. This will indicate if we are going to take a low cost approach or differentiation. Company X does not have any special resources or capabilities, however they do have an effective online presence and are able to innovate. As a result, we have chosen to take the differentiation route.

We have now chosen the product differentiation strategy as a way to gain a competitive advantage when selling a product that better satisfies a customers needs. This is the preferred strategy as price differentiation may sometimes lead to price wars and diminishing margins. Furthermore, if you are starting up as a small business, you may not have the capabilities to battle competitors with price differentiation.

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The Marketing Aspect – 4 Ps and STP

This is the section that differentiates you from your competitor. I’m only going to focus on the more important aspects related to starting a small bodybuilding supplement business.

4 Ps

Product

Price

Place

Promotion

STP

Segmentation

Targeting

Positioning

You should already be brainstorming your product idea from the start. Your product includes everything for which you are presenting. This includes the box, capsules, label, bottle, etc. So think to yourself, how do you want to present this product? Do you prefer a metallic finish on the box and the label? Do you prefer a green color to reflect a more earthly feel? What shape do you want the bottle to be? Do you want the bottle to be translucent or not? Do you prefer gothic font or a more traditional font? An unnamed flashy bodybuilding supplement company tends to use a metallic finish to their bottles. They also include graphs (questionable) on the back of the label to show how effective their products are. These are ideas that you must think about for your product.

If you don’t have any experience in this industry, it’ll be difficult to come up with a price of the bat. I’ve seen margins range from 10% all the way to almost 100%. I would have to say that the average lies around 30-40%. If you can achieve this by selling to a retailer or distributor, then consider yourself around the industry average.

Next is how to sell your product, which refers to “place” under the 4 Ps. Are you planning to sell it online or through a brick and mortar store? Are you planning to have your own website? Have you considered going through a distributor? For an individual starting up, it’s probably best to have your own website or to try to sell it to local vendors. Keep in mind that your product is new and that if you go directly to the big brick and mortar stores, you would have a hard time convincing them of your product. Shelf space is important and they want to give it to products, which have proven themselves. Also, going to large retailers may require you to pay a shelf fee, which can be expensive.

The last big “P” is promotion. Major advertising in magazines can cost thousands of dollars for a single page. This would be too expensive for the small business owner. As a small business owner, you must look at cost benefit options. The simplest and most cost effective method is through word of mouth. This can be done by providing local retailers with samples to give to customers or through the more popular method of advertising your products on forums. Forums such as www.bodybuilding.com provide the smaller businesses with an opportunity to showcase their products within a community environment. Cost is minimal if any.

How do you put your ideas together?

Find a good co-packer. The easiest way would be to find a company who can put the powder into pills, put the pills into the bottle, label the bottle, and box the bottle. There are companies who can do this. Furthermore, these companies can also help you with designing the labels and boxes. All you would have to do is guide them and explain to them your vision. My advice is to go with a smaller company. Smaller companies tend to be more flexible, willing to accommodate your needs, and may have shorter lead times.

Raw materials can be sourced from www.alibaba.com. These raw materials can be sent directly to the co-packer's facility. As a side note, you should ask for a sample from the same batch ahead of time so that you can properly QC the product for such things as e.coli. The most ideal situation would be if the co-packer already knew who to source these products from.

The biggest hindrance to starting a business is the lack of initiative. The above are strategies and ideas on how to start a supplement business. Since there is much to talk about and so little room, if you have any questions, feel free to comment or ask below.

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http://www.muscleadvance.com