It’s hard to turn on the news and not hear any one of these words…
Baby boomers, medical debt, Medicare, Obamacare…
There’s no doubt that the increase in health care costs, aging population and world financial crisis, that more and more people are worrying about their current and future health situation.
This, combined with the increasing awareness behind preventive medicine, has made people seek out alternatives.
Now, although they’ve been around forever there’s been a recent boom in what are referred to as nutraceuticals.
Nutraceuticals are pills, powders and liquids that fall somewhere between prescription drugs and dietary supplements.
They normally claim to fix some sort of health issue (high blood pressure) or increase physical performance (physical activity or sexual health).
They’re not regulated by the FDA and you don’t need to see a doctor or have a prescription to buy them.You can get them online or at any health/supplement shop like GNC.
Examples include nutraceuticals for…
- Athletic performance (weight loss, pre-workout, muscle builders)
- Sexual health/libido
- Joint pain relief
- Blood pressure
- Skin conditions
- Fish oil, flax oil, krill oil
- Pretty much any condition you can possibly think of
Since they’re made up of proprietary blends of vitamins, minerals and herbs, you don’t need to be a licensed doctor or a work at the research department at Pfizer to create one.
Massive Rise in Popularity
According to Nutraceuticals World magazine, the nutraceuticals product market is expected to reach $204.8 billion dollars by 2017. Many marketers have taken advantage of the boom and began to create their own.
They’ve also found a way to advertise them very effectively on display.
And contrary to popular belief, it’s not difficult for the average person to create their own.
We’re not going to get into the nitty gritty details on how you create the product and fulfill orders, but believe me when I tell you that there are a couple multi-million dollar nutraceutical companies with factories, physical stores and lots of employees that started mixing ingredients on their kitchen table, storing product in their closet and shipping orders out of their local post office.
This post outlines how one nutraceutical company uses display advertising to sell millions in product per year, plus insights you can take from their campaigns and implement them in your own business, even if you have no interest in creating or marketing nutraceuticals.
Why Is This A Good Business Model?
Starting a nutraceutical business is more work then just writing and selling a digital eBook. There is a learning curve and it does require an upfront investment in time and money.
However, most people find that the potential profits more than make up for the extra hassle.
Mainly because nutraceuticals have a few distinct advantages over digital products.
Unlike an eBook or online course, your customers are eventually going to use up their supply and need more. This means lots of repeat customers and purchases.
The Lifetime Value of One Customer Can Be Huge
It’s a huge advantage when you pick the right nutraceutical to sell.
When you have the right product that works well for a large portion of the population, they’re going to keep using it as long as they keep seeing results. This means the lifetime value of one customer can be huge.
Example: I take a premium multi-vitamin and omega 3 fish oil supplement every single day. I’m probably going to take these supplements for the rest of my life. It costs me ~$30/month to take these two supplements. I’ve taken both since I was 25 (I’m 27 right now). If I continue taking these supplements for the next 15 years I’ll have spent ~$5,400 with these companies.
Easy To Sell in Bulk
When you have a good product that people use month after month, it’s easy to sell a larger quantity at any given time, either as an upsell at the point of purchase or as part of some special deal. It’s a no brainer to buy in bulk if your customer knows they’re going to take your supplement every day for the next 12 months and you offer a 12 month supply at a deep discount.
Most nutraceuticals have some sort of continuity plan. Recurring revenue of $40 – $100 level per month for one customer is a very nice thing to have. Plus, most people enjoy having the convenience of something being shipped to their door. This combined with the hassle of canceling (even if it’s just hitting a button, sending an quick email or making a short phone call) means they’re less likely to cancel their shipments, even if they find another competitor that’s cheaper, higher quality or has some advantage over your brand.
Why Do Nutraceuticals Work So Well on Display?
Display Feeds the Mass Market
The best nutraceuticals solve an issue that everyone deals with at some point in their life.
Almost everyone will suffer from joint pain, lower testosterone levels, high blood pressure, loss of mental clarity, etc. It’s just part of getting older. However, most people will will want to do something to “slow down” aging.
Any kind of a market where there’s huge demand in a large percentage of the population tends to work well on display.
There are a lot of sites where it’s easy to target an older demographic without having to use all these fancy search keywords
Let’s use a testosterone booster as an example. Studies show that your testosterone levels lower by ~1% every year after you turn 30. Lower testosterone is a fact of life. A man who’s 65 years old will never have the same testosterone levels as an 18 year old. However, there’s no man on this Earth who isn’t at least interested in raising his testosterone levels.
Yet, most will not actively think about it unless it gets so bad that it causes some sort obvious health issue. Most guys are not going to suddenly decide they need a testosterone booster RIGHT NOW and head to Google to search for it.
However, if someone sees an interesting display ad tied to a good sales page, they’re going to be aware of their lowering T levels and at least be open to trying it.
The guys that have high-quality products and sales funnels are typically going to be doing at least 5x (if not 10x) the revenue from display compared to search.
Getting Started: Things to Keep in Mind
Starting a nutraceutical business is much different than most other online business models. It has its own set of challenges that will be new to marketers who have never sold a physical product before.
Here’s a quick list of things you’ll need to take into account before you get started.
(Note: This is far and away from a complete list of what you’ll need — just an introduction)
- An idea/market – What pain/problem do you want to help solve? Is it actual phyiscal pain like joint pain… or do you want to create a supplement that helps with performance (e.g. a pre-workout supplement for bodybuilders). Both can be highly profitable, but I’d recommend you choose something that interests you. It’s even better if you’re in that niche (you hit the weight room) or if you’ve suffered from that problem in the past and found a solution (you suffered from low testosterone).
- A wholesaler — You’ll need to find a company that can sell you bulk quantities of whatever herbs or powders you’ll need to create your blend.
- Some way to assemble the pills – You can do this yourself when you’re first getting started. However, you’ll eventually need to hire someone or a factory to do it if you want to scale.
- Some way to ship the product – Again, on day 1 you can pack the boxes and taking them to USPS. However, eventually you’ll need to find a cost-effective way to have someone else pack and ship your product.
- A good copywriter — Success with cold traffic relies heavily on the copy you use in your sales letter, video sales letter, article lander, or whatever your prospect sees when they hit your landing page. If you’re already a good copywriter — awesome. If not, you’ll have to either learn or hire someone.