April 16, 2020 by Andrew Minalto - 2 Comments

The WORST product to sell on Amazon UK FBA – FOOD SUPPLEMENTS?!

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Sell supplements on Amazon

Let’s talk about food supplements on Amazon UK. Is it a good niche to get into or not? Why are supplements such a hot category, and why are so many people trying to get into this niche? What is the best way to sell supplements on Amazon using FBA, and is it a profitable business model? I will try to cover all these questions in detail and shed some light on the whole industry so you can better understand how it works.

First of all, why supplements? Well, I have been experimenting with supplements for the last twenty years, so I have a lot of experience dealing with them on a personal level.

Secondly, I regularly get emails from people asking me for advice on this industry, and as I haven’t talked about supplements on my blog before, I think now is the right time to do it. Due to the COVID-19 crisis, supplement sales are skyrocketing on Amazon, as people are trying to improve their overall health and immune system as much as they can. There are manufacturers that I personally work with in this space who tell me that they can’t cope with the demand, it’s that big of an increase.

I also hope that one thing the world gets out of this crisis is that more people start to eat healthily, fix their chronic health issues, get in shape, be more active, etc. Like it or not, people who are obese, who have diabetes, high blood pressure and other chronic conditions are at high risk of suffering from and dying from this virus.

No wonder the US got hit so hard—it’s the most obese Western country in the world, with some 36% of the adult population being obese. And those are just the people with a body mass index (BMI) of 30 or more! The percentage of overweight adults in the US was close to 70% in 2019, and experts predict that within a few years, that number will be closer to 90%!

That’s shocking. Nine out of ten people being overweight, which is the most common cause of high blood sugar, type 2 diabetes and many other chronic conditions. The Pope said that the coronavirus pandemic could be nature’s response to the climate crisis. I say that the virus came to teach us all the lesson that we can’t continue on this path. We can’t keep eating processed, sugary foods only to end up on multiple prescription drugs by the age of forty with chronic conditions and still continue to thrive as a species. We simply can’t. We have to get healthier. That’s the only way to fight COVID-19 and any future viruses that will come.

Anyways, sorry for getting sidetracked, but I do think that supplements can play an important role in this process of us getting healthier. It’s a massive industry worth more than 100 BILLION dollars globally and continues to grow every year. So, there’s no doubt that the demand is there, but is it a good idea to sell supplements on Amazon? Let’s find out!

Should you start selling
supplements on Amazon UK?

Food supplements

Why do people get so excited about the whole supplements market? Because, when they do product research using Jungle Scout, they get blinded by the massive sales numbers! Let’s look at the Amazon UK market. Here are just a few examples to get your head spinning:

  • Fish oil: £200k + per month
  • Protein powder: £400k+ per month
  • Vitamin C: £500k+ per month
  • Collagen: £250k+ per month
  • Vitamin D: £700k+ per month

These are just approximate numbers that I have quickly summed up using Jungle Scout’s Chrome tool on the top twenty listings in the search results. The actual market size is even bigger as there are thousands upon thousands of listings in this space.

If we found all of the supplements on offer and summed them up, I predict that the total sales on Amazon UK in this space is more than £20 to £30 MILLION per month—probably much more! And this is just Amazon UK. I won’t even talk about Amazon US. Just take a look at the sales numbers for protein powder in the US:

Protein powder sales Amazon US

It’s millions upon millions of dollars every month! For just one product.

So yes, I do understand the excitement about the size of the market, but here’s the thing: food supplements is one of THE MOST competitive niches out there. It has been that way since the beginning of the internet. Even before Amazon came along, supplements, gambling, financial services and adult entertainment were super competitive industries. And don’t think for a second that the situation on Amazon is any different—it’s not.

We all know how business on Amazon works, right? We source a product, brand it, create an awesome listing, and then we have to spend money on PPC (or other traffic sources) to build up sales velocity and organic rankings. Now, there are two massive problems here:

1. Most top listings in this market are long-established players with a massive amount of reviews, which is very hard to compete with.

2. Click prices can be super high. For some supplements, it can cost up to £5 per click to get any traffic in! And that’s for products that sell for between £10 and £20!!! It’s impossible to make a profit on first order with such a high click price.

And the second point leads us to the main marketing/business drive behind any serious and large supplement business:

They DON’T make money on the first sale!

The whole idea behind this business is to make a profit in the long term on repeat sales.

This means that you have to be prepared to invest a LOT of money into acquiring customers and have a perfect branding and marketing plan in place for them to come back for a second, third and fourth order. Only then will you start making a profit.

Most people who start out on Amazon have a budget of a few thousand pounds and simply can’t afford to invest, say, £30 to acquire one new customer who will only become profitable after the third sale. They simply can’t afford it.

Also, we shouldn’t forget that Amazon is a marketplace and you don’t own or control it. I know for myself that I often change the brands of supplements I buy. Maybe I see something new/interesting coming on the market, maybe someone has started selling the same product for less, maybe it’s got better packaging or whatever. Every time I go on Amazon to buy the product you sell, there’s a good chance that I will end up buying from someone else. That’s just how it is.

To sum this all up, I personally think that for most people, it’s a really bad idea to get into this market.

If you have a large budget and prior experience, you can try it, of course, but you should have a clear plan in place for how you will turn your first-time customers into regular buyers to offset those high click prices.

If you’re passionate about this market (as I am) and want to build a business around it, do it outside of Amazon. You should create a website/online shop using Shopify, build your social presence on social media (Facebook, Instagram, YouTube, etc.), work with influencers, optimise your SEO and paid ad amplification, etc.

Only then will you have full access to your customer data so you can use re-targeting ads and harness the full potential of email marketing to keep your customers coming back for more. If you have the skillset, patience and a good vision, then yes, you can build a successful business in the supplements market.

And when you do that, you can also list your products on Amazon for the same price and let people buy from your Amazon store, too. It will be a profitable channel as you won’t be paying those ridiculously high click prices anymore. People will already know about you from other sources and will buy from you because they already know you or have already placed an order with you in the past.

WARNING!!! Don’t fall for all the online “home business” packages you see on the internet that offer you “fully loaded” eCommerce shops in the supplements industry that are “ready to go”! Usually, these business opportunities cost you several hundred dollars or pounds and promise that all you have to do is join the program and you will basically turn your computer into a money printer. I’m sorry, but that just won’t work.

Supplements dropshipping store

Having a generic or even cheaply branded online supplements store filled with dropshipped products is a total waste of time. It’s not 1998 anymore; people are smarter now. You will simply be wasting your time and money trying to promote such an obviously generic website with no real legs.

If you want to do this right, build your website, brand and online shop from the ground up. Use a well-known shopping cart platform, like Shopify, come up with a great brand name, source your products directly from manufacturers and use the best email automation systems, like Klavyio, etc. Build a real business and real brand that offers real value to your customers. Yes, it will be a difficult journey and it will take a lot of time, so if you’re not ready for that, don’t even start.

One thing that is actually quite easy in this space is finding good manufacturers that can sell you the product for very good prices, offer private label options (branding) and will generally work with very low MOQs. You can easily find such companies in the UK/Europe using Google or by attending trade shows.

Private label nutrition

I recommend you stick with UK/EU companies as they will have all the proper paperwork and testing in place, so you won’t have to do it on your own (like when you import supplements from China).

Another thing to keep in mind is that there’s a reason why these manufacturers offer such good terms, low prices and great branding options, and that’s because the manufacturing/fulfilment aspect of the supplements industry is the easy part. The difficult part is actually reaching customers and SELLING those products!

So, don’t be naïve. When you see that you can source a supplement for £1 per bottle and the going price on Amazon is £10, don’t think that you will make a £9 profit. The huge margin in this industry exists for one simple reason: the cost of customer acquisition is extremely high!

So, while I love working with high-margin items, I can definitely tell you that it’s not all about the margin alone. You have to account for the cost of making that sale. Whatever is left over will give you a good indication of how profitable that product is or is not.

Ok, but is there a way to start smaller and sell supplements on Amazon?

Yes, there are few ways you can approach this market and still make money by selling food supplements directly on Amazon UK using the FBA fulfilment method. If you’re smart and don’t do what everyone else is doing, you can actually make a good profit in this industry, even if you sell only on Amazon.

How to sell supplements on Amazon
UK THE RIGHT WAY!

Organic supplements

First things first, forget about selling any generic, hugely popular supplements like:

  • Vitamin D, C, A, etc.
  • Protein powders
  • Collagen powders
  • Magnesium, calcium, zinc, etc.
  • Turmeric, black pepper
  • Fish oil
  • Etc.

All the well-known, popular supplement categories on Amazon will already have huge competition in place, which will lead to high click prices and difficulty achieving good organic rankings without spending a lot of money on PPC.

I have followed this industry for more than twenty years now, and in my opinion, there are only two ways to make it work:

  1. Be the first; and/or
  2. Dominate a small niche.

The first option is simply to be ahead of the curve and start a business around a product that will be popular in, say, two or three years. Just like Vital Proteins did with collagen powders.

Vital Proteins

They started the company when no one knew what collagen peptides were, and they basically created this new category out of nothing. I won’t explain that this route is very risky, capital-intensive, and did I say risky? I don’t think this strategy is suitable for 99.99% of small-time Amazon sellers as they simply won’t have the capital, knowledge or insights to pull off anything like this.

So, we’re left with option number two: dominate a small niche. And this can be done solely on Amazon, too. Basically, what you need to do is locate a small sub-niche within this industry—find a rare supplement variation that no one else is selling.

This way, you will be able to better target your customers in the search by using more specific keywords AND rank quickly in the organic results, too, as NO ONE else will compete with you for the same keywords.

Now, obviously, this strategy does not mean that other sellers won’t try to compete with you in the future and create similar products. However, it will give you some time—at least a few months, maybe even a few years, depending on how big the niche is (the smaller it is, the less attention it will attract from other sellers).

During this time, you will position yourself as a market leader on Amazon and outside of Amazon. You will create a following, acquire loyal customers and build a high review score. This will make it much more difficult for new players to disturb your organic search positions.

Sounds good so far? Excellent! What are the most common sub-niches in the supplements market you can explore on Amazon? Here are my top five strategies:

1. Unique blends/formulas. Create unique formulations and blends of vitamins/minerals/active ingredients that no one else is selling. Most supplement manufacturers are happy to create unique formulas for you if you can reach certain MOQs. If you can identify a need in the marketplace for such a custom blend, it can be the easiest and quickest way to make a profit on Amazon selling such supplements.

2. Organic supplements. There’s a certain percentage of people who will always happily pay more (often A LOT MORE) for an organic version of the product. In the supplements market, it’s not that easy to find organic manufacturers. That’s why the competition in this sector is much lower.

3. Vegan supplements. Similar to organic supplements, there are lots of vegans out there who won’t take supplements if they have any animal products in them, even if there is gelatin in the shell of the pill. Many supplements are available in vegan forms, but many are not. It’s your job to find and identify those unsaturated opportunities.

4. Halal supplements. Again, a certain percentage of customers will look for halal-certified supplements. This is another way to niche down and target a small audience with a unique product with no direct competition.

5. Super small niches. Lastly, you can simply go after super-rare supplements that maybe attract a few hundred pounds of sales per month. Yes, super-small demand, but if there’s not a lot of competition, you can take 100% of those sales without much effort. Be prepared for the fact that you may need to import such supplements from outside the UK/EU and deal with certification (if required) on your own.

All of these principles can also be mixed together to create even more unique products that are not easy to copy!

The key to success with any of these strategies lies in your ability to FULLY IMMERSE yourself in the market and really learn the ins and outs of your target audience.

You need to consume an enormous amount of content around any health problem/issue you’re researching, so watch videos, read blogs, forums and Reddit, listen to podcasts, read books, etc.

You have to find those small golden nuggets—unique variants you can create to target a specific sub-group of customers who will instantly notice your product on Amazon and who will connect with your brand (as you will create it in a way that speaks to them). Only in this way will you be able to make easy sales without spending large amounts of money on PPC.

Yes, these markets will usually be small—a few thousand pounds per month in sales, maybe even just a few hundred pounds—but you will make a profit and you will rank easily for your main target keywords!

To give you a quick real-life example, let’s go back to collagen powder. This is a niche close to me as I also sell in that niche myself. For a very long time, there were no ORGANIC options available on Amazon. Then, a few months ago, one seller started selling an organic version of the product:

Organic collagen powder

Based on my research, it’s the ONLY organic collagen powder available on Amazon right now. They sell the 300g tube for £39.95, which is basically three times the price of the normal collagen powder. I have no doubt that their sourcing price is also higher, but I’m sure they’re making a very nice profit on that £39.95 sale.

Their sales volume on Amazon UK is very low, but that’s because they’re based in Germany and their main listing is on Amazon.de, where they do about fifty sales a month and £2000+ in revenue.

Fifty sales may not sound like a lot, and it’s not, but I bet they make at least £10 profit on each sale, which means a net profit of £500 per month for this one super-niche product.

This is just one example, and probably not the best one, but you get my point. Niching down is THE ONLY way to make a profit in the supplements market on Amazon. That is, unless you have the £100k you’d need to burn in PPC costs to advertise a generic fish oil product.

And that’s it for today. If you’re really passionate about this market, as I am, you can still make it work. You can do it solely on Amazon, but then you’d have to niche down and accept low sales for each product you launch. Or, if you want to go big, do it outside of Amazon and build a real brand with a proper eCommerce store and loyal customer base!

Good luck!
Andrew

Andrew Minalto

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2 Comments
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  1. Lynne Hardy

    Fantastic article Andrew, you always provide so much value!!!

    1. Andrew Minalto

      You’re welcome Lynne! 🙂

      Andrew

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