Why Do Many Supplement Companies Not Make It?

by Matt Weik

Running and operating a supplement company these days is not an easy task. In fact, with so many new companies popping up across the globe, it’s no wonder so many are here today and gone tomorrow—closing up shop without a trace of their existence. So why do so many fail? Here are some reasons…

Too much competition

Let’s face it, there are thousands and thousands of supplement companies around the world today, with more entering the market with each passing day. Around 90% of all supplement sales are made up of around a handful of companies. All the other stragglers out there are scratching and clawing to gain shelf space to make a buck. If you come into the market with product that everyone else is already selling, how much market share do you actually think you’ll steal? Not much if any is the answer.

You also have people with the bright idea that they think they can get into the supplement industry and get rich fast without much work. They couldn’t be any more wrong with their thinking. As with any business, it becomes your life. You need to evolve as the industry evolves or you’ll be left behind. There is no get rich quick in business. Either get into the industry for the right reasons, or stay out and keep your money.

“Me-Too” products

As an extension to what was mentioned in the heading above, if you have a product or products that are just like what everyone has on the market already, what’s the point? Unless you shrink your margins in order to sell product dirt cheap, there’s really no reason for anyone to change over to your brand or product line. If they are price driven and you are fine with working off pennies then be my guest, but your lifespan in this industry will be cut extremely short when you find yourself not making any money. Be creative. Be unique with your product profile and ingredients, try to find new innovation and launch that versus something that every Tom, Dick, and Harry is selling.

Back in the early 90’s there were a handful of companies in the industry and it seemed like new innovation was always coming to market. These days it’s pretty much companies trying to steal others’ formulations and market it better just to make a dollar. There’s no real thought going into new products these days which is disappointing for the consumer looking for something that is cutting edge to help take their health or fitness to the next level.

Poor product quality

It doesn’t matter if you have a “me-too” product or true innovation, if your quality sucks, so will your sales. You only get one shot to earn a consumer’s trust and if you fumble you’ll never get the ball back in time to put points on the board. Brand loyalty is extremely important to the success of a brand. If you turn off consumers that are coming to your brand for the first time, you’ll never get them back—and they’ll tell all their friends to stay away from your products as well, a double-whammy. They will ultimately shop around for a new brand or go back to the one they were using before trying your products. Also, don’t fairy dust products with under-dosed ingredients and don’t put in ingredients that have not been proven to be safe and effective towards the purpose of the product and the consumers end goal for purchasing this specific product.

Over-hyped products with no results

We don’t live in the 90’s anymore and consumers are smarter now than they ever were and stay on top of current research for the most part. The days where you could say “gain 1000% strength in the first dose!” can no longer be used and believed. Companies were making these outlandish claims left and right and sales were skyrocketing because of how gullible people were. A very small percentage of people are like that anymore and companies are getting sued every day for false advertising. And that paycheck you are giving the sponsored pro athlete… he/she is laughing all the way to the bank. The athlete isn’t using your product, and quite frankly, the athlete doesn’t even care about your brand—it’s the money they are after. No one is dumb enough to look at a professional bodybuilder these days and think by using a certain brand’s creatine, protein, and fat burner that they too can look like that athlete. It’s total nonsense, quite fooling yourself.


This ties in directly with a comment from above. Lawsuits these days are brand killers. Sure you have the brands who make some crazy claim knowing they will get sued. But in the long run if they make $10M off the product and get sued for $2M, they still make $8M. And so the cycle continues. But for brands who aren’t hitting huge numbers before getting sued, they are left either with little money left to function as a business, or no money at all where they are immediately forced to close their doors.

Another reason for a lawsuit could be due to an interaction someone had with your product and is now suing you. Or you copycatted someone’s product and they are now suing you over the rights to sell such a product. If you could literally think of a reason for a lawsuit against a supplement company, it has probably already showed up in court a time or two.

Then you have the brands who only make money from suing other supplement companies saying their false claims, tainted products, on the fence of being a banned product, etc. have hurt their own business and they are suing for losses/damages. It’s actually quite ridiculous what some companies are doing today just to try and make money through insane lawsuits against others in the industry.

Not the right people running the business

I’ve seen this first hand with a brand I worked for. As a new CEO took over the company (from a different industry), he slowly got rid of other execs to bring in his friends and people he believes would do a good job growing the business. While this can work, more times than not it fails simply because these people know nothing about the health/fitness/supplement industry, they themselves don’t workout or take supplements, yet because of who they worked for in other industries, they are technically qualified to run a company and be successful. The learning curve, however, takes time and as we all know, time is money. Once these new faces start running the day to day, they want to make more changes so they have some familiarity around them. These changes sometimes do not align with the supplement industry and what it takes to be successful in this unique piece of the market. The changing of faces often continues down the line until even the sales team is replaced with people outside of the industry. Unfortunately, this is nail in the coffin for the brand many times. It will take time to get the new sales team up to speed on the industry, product line, ingredients and uses for each, and having them pound the pavement and phones to pick up new business and even try to reestablish the business the previous sales team already had. When retailers realize the new sales team is clueless, they’re moving onto another brand and replacing your products on their shelves.

If you’re going to spend the money to bring in a new CEO or exec, then spend the money and get someone from a very successful already established supplement company. Let them come in and see what is holding back the brand and make the changes necessary to win. Having a new team come in from outside the industry and take a year or more to get everything up to speed is not doing the brand any favors and could cost them the business.

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