The Nutrition Business Journal’s estimate on the size of the US Supplement industry comes in at a whopping $36.7 Billion. This staggering figure speaks to the strength of the industry and its interest amongst consumers. Looking back and comparing the state of the industry in 2001 to the industry in 2015 the supplement market has doubled in size from $18 Billion to the over $36 Billion estimate The NBJ puts its value at today. In spite of an overall massive economic downturn and increased government regulatory action, sales continue to grow as more and more consumers seek a healthier lifestyle.
It’s no secret why more and more entrepreneurs seek a piece of this growing pie! However, as more and more brands are created, the competition between them makes it harder to stand out. The importance of selecting a manufacturer that can be a valued partner has never been greater. As you consider who to go with to build your products, here are some important things to consider:
1. GMP Certification
The ultimate symbol of quality for manufacturers of dietary supplements is their possession of a GMP (Good Manufacturing Practices) certification. This certification ensures that the products produced by a manufacturer meet specific requirements for identity, strength, quality, and purity. FDA regulates these industries to ensure cGMPs are being followed by using 21 CFR part 111 as it relates to the production of dietary supplements. It should be obvious when a company has this certification because they will brag about it, while those manufacturers that do not possess a GMP certification will avoid the mention of it.
An item of note, so that you are not fooled, is to notice if a manufacturer says they are GMP “compliant” rather than stating certified. Many manufacturers use this twisting of words to make it sound as if they are operating above board. However, compliant versus certified means a world of difference! Manufacturers that say compliant rather than certified mean they are attempting to operate by the GMP standards but have not been audited by an independent agency to ensure they are walking the walk and not just talking the talk.
There are two GMP auditing groups, NSF and NPA (Natural Products Association). These groups go into companies and scour over quality records, review SOP’s (Standard Operating Procedures) making certain that they are correctly written and adhered to as well as inspect facilities for cleanliness and safety. Once their audit is complete a company is given a pass/fail
determination and a certificate is awarded to those manufacturers that meet these intense standards.
2. Lead Times
The time it takes from the date you place your order until the time you receive it is your lead time. These times can vary significantly from one manufacturer to the next. Typical lead times fall in the range of 8 to 12 weeks, some longer. So many factors can come into play with regards to the length of time it takes to produce your formula, for example: raw materials supplier lead times, bottling components availability, label printing, raw material laboratory testing, etc. While this is an important factor to consider when choosing who you are going to trust to make your formula, it is not as important as the manufacturer being accurate when it comes to the lead times they advertise. A lot of manufacturers try to lure in customers with promises of shorter lead times, once they have your deposit you are stuck! Ask a manufacturer what percentage of their orders are actually produced within the lead times they advertise, if they cannot tell you right away what that figure is, they may be leading you down a path you would prefer not to travel.
The first time your product is produced may take a little longer as the manufacturer learns the specifics of working with your unique blend. However, when it comes time to reorder each production run should flow more smoothly and reduce the time it takes to complete.
The almighty dollar! A penny saved is a penny earned… but is it really? Getting a good deal on the production of your formula is important, but you may be sacrificing a lot to save a few cents.
Look for an all inclusive price. There are many components that make up the final price of your product. When receiving a quote make certain that everything you need is listed. Items like shipping costs, labels, boxes, pallets, testing, etc are often not included in the price of your product when initially quoted. While it may be impossible to know exactly what some of the costs will be, a good manufacturer should be able to give you a really close estimate. What starts out as a $5/bottle price could end up being significantly more if you are not careful. Be an educated customer and do not be afraid to ask questions.
Finding a manufacturer that can grow with you cannot be understated. No one starts a business looking for stagnation. Growth is expected and highly sought after. Make sure the manufacturer of your choosing has the ability to grow as you do. While it can be impossible to know how quickly and how large your brand can grow, it is wise to know your manufacturers capacity and their intention to prioritize your needs once your sales increase.
As increasing regulations are the tone of the day, some companies have shied away from doing lower minimums because of the expense involved. Whether your order is 100 bottles or 100,000 bottles a lot of the expenses remain fixed. That obviously benefits a larger production run because those costs can be deferred over more units produced. For example, say it costs $1,000 to perform a lab test for an herb in your formula. That cost spread over a 100 bottle order adds $10/bottle! While the same test on a 100,000 bottle order only adds $0.01/bottle. Keep this in mind when talking to manufacturers. You shouldn’t expect to make money on a small production run. Breaking even or even losing money is the norm to start. This is why its vital to make sure you select a company that has other valuable qualities to offer when it comes time for you to reorder!
This seems obvious, but finding a voice can be extremely difficult. I have met with countless customers that have worked with multiple manufacturers and they are floored with the lack of communication that exists, especially once you have made your deposit. Getting answers and updates along the way seems a nearly impossible task. You should be able to get a response from your manufacturer whenever you want one. You may not like the update, but you should get a response regardless. An open dialogue between customer and manufacturer benefits both parties.