Starting supplement company

[Pure]

Hi Everyone,

I am looking for information on starting a supplement company in NZ. I have no business experience, however I have used a variety of supplements for the few years I have been trainiing and Im sick of paying top dollar for shitty products.

Anyway I have a source in the states that will provide me with high quality supplements for a greatly reduced wholesale price (if I buy in bulk), I can get anything from protein (ion exchage isolate,concentrate,micellar casein..you name it) to supplements such as pharmaceutacal grade creatine and glutamine etc.

Like I said I have no experince in business, but if anyone owns their own business or has knowledge of something similar any advice on getting started would be greatly appreciated.

Thanks heaps

[markm]

Hi Pure,

Sorry, can't really help you with your business ambitions, but welcome to NZBB and I wish you luck with your venture. I'm sure we'd all be happy to see some cheaper supplement options available.

[Marcus]

Hi & welcome to the site.

My advice to you would be research, research, research. You can't do enough of it. Find out what the market is doing, what sort of profit margin you would want to make to make it all worthwhile & what your potential overheads would be.

[Pure]

Hi guys,

Thanks for your welcoming comments.

[deegee]

Welcome, I have heard that it is a tough market here to get into because of the small size of the bodybuilding community. and the fact that people use the internet alot now. Maybe an internet only business would help keep overheads down.

[waldo]

Welcome, I have heard that it is a tough market here to get into because of the small size of the bodybuilding community. and the fact that people use the internet alot now. Maybe an internet only business would help keep overheads down.

You'd do well to listen to this man. Success in business comes down to innovation and timing a lot of the time. You may have missed the boat on both these counts.

[Flex]

If only it were so easy...One thing I can tell you is you're going to need a fair but of cash to make a decent go of it - here's some of the more important things to keep in mind:

• If you are formulating your own products you will need to get labels designed and printed making sure that they meet current NZ labeling requirements for dietary supplements. If the products are already labeled keep in mind that most US labels don't meet current NZ requirements - they don't always enforce the law but the health department can make things difficult for you if they choose to. If you have to do your own labels you can do it the cheap way by digital printing or the expensive (proper) way which results in having a fair amount of cash tied up in labels. Barcodes aren't cheap either - I could be wrong, but from memory I think they are about $150 each - you'd need a different one for each individual product so they can add up. They aren't entirely necessary though.

• If you are ordering dairy based products and products that contain gelatin they will need a declaration that the source is BSE free and you will need a certificate of analysis for each product and for every shipment

• You will need to arrange a freight forwarding company as you will most likely want to seafreight your order due to extra costs of airfreight for powdered products - then allow at least 8-12 weeks for freight, plus maybe a week or two for clearance through customs and/or the health department. Your supplier will require payment upfront so you there will be at least 2 or 3 months from initial payment to you taking delivery. I have heard of products being tied up at customs for over 3 months awaiting clearance so make sure you have all your paperwork sorted.

• If you have all your paperwork in order and customs clear your shipment you will then need to pay GST (12.5%) and duty (7% on supplements) and any health department charges on top of what you have paid for your order which is calculated using the exchange rate on the day of arrival in NZ. You also have to pay GST on your freight costs.

• You'll then want to advertise and most likely stump up for a website and POS material - brochures, flyers, posters etc. If you're going to sell it through retail stores you are then going to have to rep it and once you have stockists wait at least another month for payment - if the product sells. If you want to sponsor BB shows factor in around $400 to $500 for each one, plus a day of your time being at each show.

• If you've formulated your own protein powders you run the risk of no one liking the flavours, you also run the risk that your suppliers are legit and actually put what they say they are going to into each product.

• Take into account that the US dollar is forecast to drop at some time in the not too distant future - a few cents drop can have quite a big impact on your bottom line which could result in the final retail price of your products being uncompetitive to comparable products.

Good luck.

[Pseudonym]

Wow. Once again, Flex, good post!

Pure, I don't think there's much that Flex hasn't already covered, so I'll keep it short. There are currently quite a lot of businesses importing supplements already - all trying to undercut each other. This, combined with the fluctuating dollar that Flex mentioned, makes it quite a risky style of business.

I'd suggest you think laterally and come up with other alternatives. Perhaps an internet-sales-only business to keep overheads down as suggested, with a strong "Buy NZ Made" emphasis? We've got (arguably) one of the best dairy industries in the world in Fonterra, so cheap, high quality whey is not hard to come by if you're a wholesaler. I'm sure you could find NZ manufacturers for other supplements too.

Good luck, and welcome to the forums.

[Musculo]

I agree with those that have posted before me.

I am NZ distributor for a tanning and supplement range from Australia. My contract for the supplements mean I can't sell retail and my prices are guided by Australia, meaning there is very little between what it costs me to purchase it and what I sell it for. Why do I do it? Because I was sick of paying the earth for supplements and I like the products.

Customs are a real pain, an example is an order that I had made over 3 weeks ago. The first part of the order arrived within a week. The rest of the order was held by customs. Its been over two weeks for them to get there act together to forward it to me!

Take into account the dollar, while its high thats all good for you bringing the product in but when it drops thats when you feel it! Also customs fees and GST etc.

The market is limited and there is a lot of brands about all vying for that small percentage. I second doing your research and seeing where the market is.

Best of luck

[The Legend Killer]

Only way I see protein prices going down is if the Warehouse tap into that market one day.

[Flex]

The big players like the Warehouse would generally avoid Sports Supps due to a few reasons:

High Ticket items like thermos easy to shoplift, big tubs of protein take up too much shelf space for the return they would get on each sale, not enough margin in it for them, not mainstream enough.

And could you imagine asking a warehouse staff member what CEM, CEE, HPLC tested, WPI, ZMA, NO2, partially hydrogenated, hydrolysed, or peptide bonded meant?

Rebel Sport would be the best bet for discounting supps but they only stock Balance and EAS at the moment and don't really discount it too much.

I would also hazard to guess that a lot of nutrition brands would run 1000miles before wanting to be in the warehouse - I for one wouldn't buy supps from the warehouse mainly just from a perceived quality vs price standpoint.

The Parallel Imported chainstores would probably be able to have a decent go of it, however again the return on shelf space wouldn't be as good as what they'd get with cellphones, watches, digi camera's etc and the margin wouldn't be anywhere near as good.

There are also a lot of import restrictions and regulations on dietary supplements, and most US brands legally require expensive relabelling to meet local standards, and there are quite a few products that don't meet the NZ requirements as far as dosage and ingredients etc. These restrictions aren't really enforced as of yet but no doubt in the not too distant future you'll probably find that you can't get a lot of foreign brands in NZ because of the new laws. Most importers aren't currently going through the official channels and the local manufacturers haven't really been putting the pressure on, however I would think it will only be a matter of time.

One way to get protein prices down is to get Fonterra to stop charging local companies more for Whey protein than they charge the foreign companies. But then that would be bad for exporting so they won't do that.

And another suggestion that will probably get alot of people's panties in a twist would be to stop allowing direct sales through the backdoor. More people would then have to support the local manufacturers, who would increase their volume and subsequently get better prices, which they would then pass onto the consumer.

[waldo]

I think you'll find the Warehouse have looked and are looking for a brand to stock. Most probably they will import one themselves, or look at something like the 'NZ Sportfood company' or whatever the hell it's called. Judging by the demographic that shops there you probably wouldn't find very flashy labels with lots of graphs on them, rather you'd find the cheap crap that retails in Foodtown for $29.95.

Judging by the last time I checked out a Rebel Sport, I'd hazard a guess and say they might even be getting out of supps as a whole. Their stock levels are way down, and the store manage didn't know when more would be coming. Their sales are slow to say the least.

Remember people, Retail business runs on profit margin. There is a point of no return as far as how low prices can go before there is ZERO point in providing a service to the public. Even the Warehouse practice margin based retail NOT discounting anymore, thus ensuring better profits for their shareholders. Believe it or not, The Warehouse isn't actually there to provide you, the consumer, with lower prices. They are there to make a profit and in turn re-distribute a % of said profits to the shareholders.

Also remeber NZ's laws allow parallel importing to benefit the consumer with lower pricing, so what you see now are probably the lowest prices you'll ever see in NZ for supplements. The $70 odd dollars for a 80 serve tub of Dymatize Elite is actually a very good deal, so I still fail to see how people can get all uptight over 'over-priced supplements'.

In the future, I'd like to see more healthy debate on how this Govt taxes the hell out of you so that child-murdering wasters can live in a house for $44 dollars a week rent and get on the piss each night. That hacks me off more than the price of Protein!

[Varven]

In the future, I'd like to see more healthy debate on how this Govt taxes the hell out of you so that child-murdering wasters can live in a house for $44 dollars a week rent and get on the piss each night. That hacks me off more than the price of Protein!

Amen to that sir,

sound the death knell for the current party and bring in National.

I work my arse off @ 2jobs, study and pay taxes, only to have cars repeatedly broken into in Aucklands lower demographic areas which are primarily funded from my taxes.

:evil:

[deegee]

Cars being broken into around where I live , south auckland is now so common that it doesnt get reported even, I park at the gym often and see broken window glass and here of things being taken from cars.

I dislike all the current crop of polititions and dont think one lot is going to be any better than we have now. But we got to try someone new.

As for protien powder and supplements i'll vote for anyone that would make them cheaper!

[The Legend Killer]

Uh, people were breaking into cars during National's time too. In fact they would've been breaking into cars more then.

[The Legend Killer]

The $70 odd dollars for a 80 serve tub of Dymatize Elite is actually a very good deal, so I still fail to see how people can get all uptight over 'over-priced supplements'.

It's priced well in comparison to other products, but quite disheartening when you go on ebay and see those same tubs are selling for $17.98 US.

[waldo]

Uh, people were breaking into cars during National's time too. In fact they would've been breaking into cars more then.

Mate, this ain't a National Labour thread. And before you go making statements like that, check your figures first.

[waldo]

The $70 odd dollars for a 80 serve tub of Dymatize Elite is actually a very good deal, so I still fail to see how people can get all uptight over 'over-priced supplements'.

It's priced well in comparison to other products, but quite disheartening when you go on ebay and see those same tubs are selling for $17.98 US.

Add the exchange rate, postage, Health Dept levies, GST, Duty, and you get a pretty similar figure. The only difference is the wholesale mark up for the guy that's gone to the trouble to front up with the money to get the tubs into the country in enough of a purchase to ensure a low price.

[The Legend Killer]

Uh, people were breaking into cars during National's time too. In fact they would've been breaking into cars more then.

Mate, this ain't a National Labour thread. And before you go making statements like that, check your figures first.

If that's the case then perhaps you shouldn't have brought it up then. I couldn't find any actual figures on car theft in South Auckland, but I did find statistics showing theft and dishonesty crimes had dropped overall in Auckland since National were in power.

And back on the protein yeah I understand that the seller has to make it worth their while, but it still sucks for the consumer that they're paying more than double what it would cost someone in America, even though we apparently have the best quality whey protein in the world.

[waldo]

Uh, people were breaking into cars during National's time too. In fact they would've been breaking into cars more then.

Mate, this ain't a National Labour thread. And before you go making statements like that, check your figures first.

If that's the case then perhaps you shouldn't have brought it up then. I couldn't find any actual figures on car theft in South Auckland, but I did find statistics showing theft and dishonesty crimes had dropped overall in Auckland since National were in power.

And back on the protein yeah I understand that the seller has to make it worth their while, but it still sucks for the consumer that they're paying more than double what it would cost someone in America, even though we apparently have the best quality whey protein in the world.

Read the thread, I didn't say anything about car theft. My only observation was I'd rather be taxed less than subsidise unemployed child killers.

Fonterra funnels our Whey Protein off shore before the NZ companies get it. And apply economic logic to a country of 300 million people and a country of 4 million, and you'll get an idea as to why it's much cheaper in the states.

[2guns]

Read the thread, I didn't say anything about car theft. My only observation was I'd rather be taxed less than subsidise unemployed child killers

yes but you started the post about the govt.

personally i think if someone wants to break into a car its not going to be decided on whose in parliament.

if they see something good on the seat e.g a laptop its gonna be all on

[Varven]

Read the thread, I didn't say anything about car theft. My only observation was I'd rather be taxed less than subsidise unemployed child killers

yes but you started the post about the govt.

personally i think if someone wants to break into a car its not going to be decided on whose in parliament.

if they see something good on the seat e.g a laptop its gonna be all on

I started the post about car breakins.

its not laptops alone.

They broke into my family type non attractive car, got into the boot, and took my gym sneakers and clothes. go figure !

[2guns]

laptops were just an example of one thing.

anyway if someone wants to break in u cant really stop it

[The Legend Killer]

Fonterra funnels our Whey Protein off shore before the NZ companies get it. And apply economic logic to a country of 300 million people and a country of 4 million, and you'll get an idea as to why it's much cheaper in the states.

Seeing as they sell the 20 kg bags of WPC and WPI off to people for low prices, it makes you wonder why they can't just get into it themselves, surely a sizeable profit could be made for them there while still lowering the prices.

[Flex]

Fonterra funnels our Whey Protein off shore before the NZ companies get it. And apply economic logic to a country of 300 million people and a country of 4 million, and you'll get an idea as to why it's much cheaper in the states.

Seeing as they sell the 20 kg bags of WPC and WPI off to people for low prices, it makes you wonder why they can't just get into it themselves, surely a sizeable profit could be made for them there while still lowering the prices.

Fonterra owns Horleys.

And Nestle owns Musashi and Abbott labs own EAS. It doesn't matter how large the company is that packages whey protein, it still costs money to produce.