Online vs Retail

This topic contains 21 replies, has 7 voices, and was last updated by Profile photo of Buy Health supplements online Buy Health supplements online 11 months, 1 week ago.

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  • #417
    Profile photo of Sally
    Sally
    Participant

    i’m trying to decide if i should go through retail or online channels for my product and would like to know everyone’s opinion about the relative benefits of each.

    right now here’s how i see it

    1). online – easy to get started, scalable if you can get your marketing down right, but probably difficult to get people’s attention. i’m not sure if i’m much of a writer or content creator so i’m unsure of how this would work. (i’m thinking about affiliate marketing and am very glad @bejako is now a member).

    2). retail – this seems more direct and an easier way to get bigger sales, maybe less thinking for me to do, but i’ve never done trade shows and to be honest i don’t really know how it works.

    does anyone have input on the benefits of these two channels? is it possible to do both at the same time or would you recommend against doing that?

    jonathan do you have any advice here?

    thank you!

    #418
    Profile photo of Stephen
    Stephen
    Participant

    in the past i’ve watched “over the shoulder” through webinar style videos as a top-notch media buyer explained his approach to buying mass traffic for supplements, and in his particular case i remember thinking that his numbers suggested he was paying around $70 or so to get a conversion from quality traffic that was responding to banner ads. i don’t think there was any list building involved, just get them across to the sales page, and show them a VSL which converts reasonably well. this one was for a blood pressure supplement.

    of course, it’s very hard to be profitable at $70 per customer acquisition. so the trick was designing the funnel so as to increase the value of the overall sale. upsell the same product discounted in packs of 4 and 6, for example. this way the average sale ended up being worth $180 or so which is more than twice the cost of the conversion.

    but that’s only after weeding out the sites worth advertising to. i also saw dud sites in the stats where the cost per conversion was in excess of $400. so there’s a lot of testing with this sort of thing to dial it in and it’s not for the faint of heart. at the time these guys were doing around $40K in sales a day and delivering about 40K visitors to their sales page. heavy duty.

    #421
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    in the past i’ve watched “over the shoulder” through webinar style videos as a top-notch media buyer explained his approach to buying mass traffic for supplements, and in his particular case i remember thinking that his numbers suggested he was paying around $70 or so to get a conversion from quality traffic that was responding to banner ads. i don’t think there was any list building involved, just get them across to the sales page, and show them a VSL which converts reasonably well. this one was for a blood pressure supplement.

    of course, it’s very hard to be profitable at $70 per customer acquisition. so the trick was designing the funnel so as to increase the value of the overall sale. upsell the same product discounted in packs of 4 and 6, for example. this way the average sale ended up being worth $180 or so which is more than twice the cost of the conversion.

    but that’s only after weeding out the sites worth advertising to. i also saw dud sites in the stats where the cost per conversion was in excess of $400. so there’s a lot of testing with this sort of thing to dial it in and it’s not for the faint of heart. at the time these guys were doing around $40K in sales a day and delivering about 40K visitors to their sales page. heavy duty.

    This is awesome, thank you. It’s also a re-inforcement to me why I don’t want to go this route. It seems like you have to be “all in” on making it work or else it’ll bankrupt you, and the unit economics are tight, forcing you to have extremely low product costs and very bold marketing claims to justify the high price…..it seems like a slippery slope.

    Have you done any work in this area yourself?

    Owner of Health Kismet . Open to answering any and all questions.
    #422
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    i’m trying to decide if i should go through retail or online channels for my product and would like to know everyone’s opinion about the relative benefits of each.

    right now here’s how i see it

    jonathan do you have any advice here?

    thank you!

    As per my other post, I definitely think it’d be hard to do the online affiliate thing alongside anything else because it squeezes your margins into a box that would make other channels unaccessible.

    With online marketing I think there has to be some form of content creation that you’re very good at to make it work or else it’s not worth it. I’m good at blogging but terrible at social media so I get by with that. I know of some supplement companies that go entirely through Instagram for sales and nothing else…..it’s all about finding your medium.

    But be in the top 10% or find something else.

    With retail sales you have to invest in the trade shows and reaching out to distributors. You also have to pay close attention to packaging which can be difficult because you might have to get containers that have specialty printing and require 10,000+ units as minimum orders but you have to have something that stands out on the shelves.

    Lots of the health food stores are actually owned by the distributors so many of them will only buy from you if you have an agreement with them.

    Owner of Health Kismet . Open to answering any and all questions.
    #423
    Profile photo of Stephen
    Stephen
    Participant

    Have you done any work in this area yourself?

    no, but i’m trying to move towards it. i promised myself for a long time that i’d find some non-Google, non-Facebook paid ad platform and try to master it so that i’d always have a source of traffic i could fall back on when needed. selling health related products on G and F is like trying to tip toe through a mine field. so i’m going to start on the self-serve banner networks and practice trying to sell a simple digital product. then if i feel the method has potential (for me) i’ll have more confidence that maybe i can try a supplement (i have one in mind that i have been thinking about and tentatively formulating for months now).

    there are other approaches that might work for you with your latest product (since it’s kind of novel), and that’s selling via existing email marketing lists. basically you pay the owners of large well-targeted lists to email on your behalf and you see if you can get those people onto your own list where you educate them about your product and convince a portion of them to buy one or more of your products. i think your Incredible Mood product has the potential to get people interested, and then if they take the bait you can maybe also get them interested in the greens and berries products. that’s an avenue i’d definitely explore if i had a subscription-worthy product :)

    #426
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    Have you done any work in this area yourself?

    no, but i’m trying to move towards it. i promised myself for a long time that i’d find some non-Google, non-Facebook paid ad platform and try to master it so that i’d always have a source of traffic i could fall back on when needed. selling health related products on G and F is like trying to tip toe through a mine field. so i’m going to start on the self-serve banner networks and practice trying to sell a simple digital product. then if i feel the method has potential (for me) i’ll have more confidence that maybe i can try a supplement (i have one in mind that i have been thinking about and tentatively formulating for months now).

    there are other approaches that might work for you with your latest product (since it’s kind of novel), and that’s selling via existing email marketing lists. basically you pay the owners of large well-targeted lists to email on your behalf and you see if you can get those people onto your own list where you educate them about your product and convince a portion of them to buy one or more of your products. i think your Incredible Mood product has the potential to get people interested, and then if they take the bait you can maybe also get them interested in the greens and berries products. that’s an avenue i’d definitely explore if i had a subscription-worthy product :)

    Interesting.

    To be honest, I’ve always considered myself fairly weak at mastering the funnel. I think my method of thinking is a bit too scientific for it…..I’m not sure how well I relate to the commmon man.

    Is there a marketplace for such a service or do you just muckrake to find the right people to solicit?

    Also, I’d be careful to make sure you have high margins on your product (you probably already knew that)….but I’d think something along the lines of 10x would be appropriate.

    Owner of Health Kismet . Open to answering any and all questions.
    #427
    Profile photo of Sally
    Sally
    Participant

    @stephen – are there any affiliate networks you recommend using to promote a dietary supplement? i am just so totally new to this and am not sure where to start.

    is something like share-a-sale a good idea or is there something better? what kind of success can i expect to have if i don’t have any affiliates right now?

    thank you so much!

    #429
    Profile photo of Stephen
    Stephen
    Participant

    Jonathan – i’d say it’s closer to the muckracking and roll the dice end of the spectrum myself. there are people out there that one can point one’s finger to and say “he’d be great to work with on this” but getting their attention or being able to afford the “entry fee” required to roll that dice is a show stopper. when i get some time i’ll email you with a few thoughts. things i don’t really want to start discussing in public forum.

    ultimately if i decide to go ahead and create my supplement i’ll need to use someone like yourself to file off the crazy bits and make the final product actually worth swallowing. that’s why i stick around this place. i see you have the new “get a quote on your crazy idea” option, which i think is great, and at some point, when i don’t think i’ll be wasting your time, hopefully i’ll be using that.

    • This reply was modified 2 years, 8 months ago by Profile photo of Stephen Stephen.
    #431
    Profile photo of Stephen
    Stephen
    Participant

    hi Sally. i would say that if you are just starting out you should not put too much faith in the ability of affiliates to sell your product.

    in general they won’t bother to seriously promote your supplement unless you have proven to them that you can sell it yourself and that there is a strong market for it.

    also, you have to be VERY careful about how you go about finding reliable affiliates. there are guys out there that are quite happy to swamp your product with fake sales if they think they can get paid the commissions before the deception is uncovered. lots of ways for things to go wrong.

    i’m not familiar with the details of share-a-sale and for all i know the affiliates are vetted and it’s a safe way to provide partners with incentives for promoting your offers.

    but like i said, i would not put all your hopes into affiliates. they tend to flock to vendors who are having success, they don’t generate that success for them.

    one affiliate network that i have my eye on at the moment is ClickBank. they’re traditionally a digital product network, but not exclusively so – especially because fulfillment is done by the vendor.

    ClickBank has recently introduced a “health supplements” category and right now there is only one product in it. i happen to know a little about that vendor, what kind of funnels he uses, who his copywriter is, and the kind of money he’s been able to make selling his greens supplement himself. it’s a lot, and that’s why he has now been able to port his offer over to ClickBank and try to take advantage of the huge number of affiliates who would love to make easy sales to their health lists with a physical product.

    but for the vendor, unless you’ve tested your product carefully in the market, it would be a huge risk to go straight to ClickBank because you only get one shot at convincing affiliates that you are worth their time investment. if you flub it you’re done. you’d literally have to rename your product and re-introduce it on a new account for anyone to take notice of it again.

    so – bottom line is you’re better off figuring out how your market works yourself and then once you know what’s what then you think about getting others involved in the promotional side.

    hope that helps, even if it sounds as though it’s going to be an uphill struggle (which we know it always is).

    #433
    Profile photo of John Bejakovic
    John Bejakovic
    Participant

    I’m a bit late to this discussion but let me throw in my opinions about a few questions that have been asked.

    @sallym: Affiliate marketing can be an effective way of increasing sales, but it works best when you already have a product that’s selling well or a network of people you’ve done business with before (or both). I don’t think it’s a great first step if you’re looking to launch a product and you have no previous network.

    About the paid marketing: I think this can be very effective if you put in the time. That price ($70 per customer acquisition) seems very high. I think the answer there is that it was a straight sales page, rather than trying to get people to opt-in for a mailing list.

    Asking people to opt-in for a mailing list, giving them valuable information and building trust, and then promoting your product would be a much better way to go, and the cost per new customer would be much lower.

    @jonathanbechtelgmail-com: there’s a site for getting in touch with email list owners called http://udimi.com/. I haven’t used it personally, but some supposed IM gurus recommend it.

    That said, I don’t think it’s so hard to get in touch with people who have an audience that might be interested in your new product and who would be willing to promote it. The key here is that you should aim at people who have a solid audience and following, but who aren’t such successes and celebrities in their niche that they are out of reach. The second point is that you should aim to build a genuine relationship with them before asking them to help you out.

    There’s a sequence of free books on Amazon called Quit In 6 by a guy called Matt Stone (alias Buck Flogging). Matt built a bunch of successful businesses online, and he calls the above strategy (connecting with medium-level influencers) the secret to his success. All the books are a good read:

    http://www.amazon.com/Quit-Your-Job-Months-Book/dp/B014J500EC/

    #434
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    Jonathan – i’d say it’s closer to the muckracking and roll the dice end of the spectrum myself. there are people out there that one can point one’s finger to and say “he’d be great to work with on this” but getting their attention or being able to afford the “entry fee” required to roll that dice is a show stopper. when i get some time i’ll email you with a few thoughts. things i don’t really want to start discussing in public forum.

    ultimately if i decide to go ahead and create my supplement i’ll need to use someone like yourself to file off the crazy bits and make the final product actually worth swallowing. that’s why i stick around this place. i see you have the new “get a quote on your crazy idea” option, which i think is great, and at some point, when i don’t think i’ll be wasting your time, hopefully i’ll be using that.

    Thanks…..I kind of thought so. If I were to go this route I’d probably avoid the superstars and try and locate a talented newcomer who’s market value hasn’t been identified yet and buy my way through some of their growing pains…..strikes me as the more cost effective way to go.

    It’s my attitude towards hiring people in general: I think flocking straight to the superstars is a lazy approach and only works if you have a huge budget.

    Owner of Health Kismet . Open to answering any and all questions.
    #435
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    That said, I don’t think it’s so hard to get in touch with people who have an audience that might be interested in your new product and who would be willing to promote it. The key here is that you should aim at people who have a solid audience and following, but who aren’t such successes and celebrities in their niche that they are out of reach. The second point is that you should aim to build a genuine relationship with them before asking them to help you out.

    There’s a sequence of free books on Amazon called Quit In 6 by a guy called Matt Stone (alias Buck Flogging). Matt built a bunch of successful businesses online, and he calls the above strategy (connecting with medium-level influencers) the secret to his success. All the books are a good read:

    http://www.amazon.com/Quit-Your-Job-Months-Book/dp/B014J500EC/

    Thanks. Sounds a bit like what I was discussing in the last post. Best to targeted talented people who haven’t quite had a chance to have their star shine and go after them, rather than top-of-the-food-chain people who are probably bombarded with offers constantly and command a very steep price for their audience.

    Owner of Health Kismet . Open to answering any and all questions.
    #437
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    To get back to the original topic of the thread….@sallym

    If you’re looking to go into retail, here are a few good tips to keep in mind:

    1). packaging becomes way more important and you ought to be prepared to go to a specialty supplier in order to get something that stands out.

    2). A lot of the big distributors meet twice a year to decide what they’re going to carry in their store. So typically you have to prepare some sort of power point presentation to explain how your product works, fill out some forms, and go pitch them from there in order to get yourself over.

    3). Be prepared to get liability insurance. Most of the distributors won’t touch you unless you have at least 2 million in coverage.

    4). It’s a lot of work!

    More and more I’m steering people towards trying to come up with larger budgets (either through private investment or savings) and a greater amount of upfront planning in order to prep themselves for the process. This is especially true if you don’t already have a business that you can plug your products into.

    Owner of Health Kismet . Open to answering any and all questions.
    #438
    Profile photo of Sally
    Sally
    Participant

    To get back to the original topic of the thread….@sallym

    If you’re looking to go into retail, here are a few good tips to keep in mind:

    1). packaging becomes way more important and you ought to be prepared to go to a specialty supplier in order to get something that stands out.

    2). A lot of the big distributors meet twice a year to decide what they’re going to carry in their store. So typically you have to prepare some sort of power point presentation to explain how your product works, fill out some forms, and go pitch them from there in order to get yourself over.

    3). Be prepared to get liability insurance. Most of the distributors won’t touch you unless you have at least 2 million in coverage.

    4). It’s a lot of work!

    More and more I’m steering people towards trying to come up with larger budgets (either through private investment or savings) and a greater amount of upfront planning in order to prep themselves for the process. This is especially true if you don’t already have a business that you can plug your products into.

    thanks jonathan!

    A few questions:

    1). who do you go for packaging?

    2). how much does liability insurance cost?

    do you have a rough idea for what kind of money you need to start this up? thank you!

    #439
    Profile photo of Jonathan Bechtel
    Jonathan Bechtel
    Keymaster

    To get back to the original topic of the thread….@sallym

    If you’re looking to go into retail, here are a few good tips to keep in mind:

    1). packaging becomes way more important and you ought to be prepared to go to a specialty supplier in order to get something that stands out.

    2). A lot of the big distributors meet twice a year to decide what they’re going to carry in their store. So typically you have to prepare some sort of power point presentation to explain how your product works, fill out some forms, and go pitch them from there in order to get yourself over.

    3). Be prepared to get liability insurance. Most of the distributors won’t touch you unless you have at least 2 million in coverage.

    4). It’s a lot of work!

    More and more I’m steering people towards trying to come up with larger budgets (either through private investment or savings) and a greater amount of upfront planning in order to prep themselves for the process. This is especially true if you don’t already have a business that you can plug your products into.

    thanks jonathan!

    A few questions:

    1). who do you go for packaging?

    2). how much does liability insurance cost?

    do you have a rough idea for what kind of money you need to start this up? thank you!

    Hi Sally,

    1). The standard container for most stuff is a white plastic HDPE container, which are recyclable and almost always provided by the manufacturer. There’s no need to go out of your way for this.

    If you want specialty containers you can try something like peel plastics or swisspak USA, both of which are pretty good with custom packaging solutions.

    2). All supplement companies are insured at the same amount up to 2 million dollars in sales, which will typically cost about $5,000/year depending on what product you sell. You don’t have to do this but it’s usually a requirement if you want to go into retail.

    You can try a company like chubb to get a quote or talk to Greg Doherty.

    Owner of Health Kismet . Open to answering any and all questions.
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