{"id":3482,"date":"2021-08-03T08:00:00","date_gmt":"2021-08-03T12:00:00","guid":{"rendered":"http:\/\/creativethirst.com\/blog\/?p=3482"},"modified":"2023-11-13T10:56:12","modified_gmt":"2023-11-13T14:56:12","slug":"growing-a-supplement-company","status":"publish","type":"post","link":"https:\/\/creativethirst.com\/blog\/growing-a-supplement-company\/","title":{"rendered":"Growing a Supplement Company to 5 Million Per Year"},"content":{"rendered":"\n
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\"growing<\/figure>\n<\/figure>\n\n\n\n

Growing a supplement company to 5 million dollars per year from scratch can be overwhelming.<\/p>\n\n\n\n

To get to that level you\u2019re spinning multiple plates and dogging a ton of pitfalls along the way.<\/p>\n\n\n\n

And if you\u2019re not preparing for growth at every step, you\u2019ll likely never reach your vision.<\/p>\n\n\n\n

But, if you focus on the process and go from one step to another, you can build your dream supplement company one step at a time.<\/p>\n\n\n\n

We all have to start out somewhere and before you can get to 5 Million, you first have to get to 1 Million.<\/p>\n\n\n\n

When you\u2019re first starting out, getting to even 1 Million can seem like an impossible task. <\/p>\n\n\n\n

But like any journey, it all starts with the first step. <\/p>\n\n\n\n

Step 1:<\/strong> Getting to the first $100k<\/p>\n\n\n\n

Step 2:<\/strong> From $100k to $500k<\/p>\n\n\n\n

Step 3:<\/strong> Going from $500k to $1M<\/p>\n\n\n\n

Step 4:<\/strong> Growing $1M to $5M<\/p>\n\n\n\n

Each step presents their own unique challenges.<\/p>\n\n\n\n

So let\u2019s look at each step and what you need to focus on to get to the next one.<\/p>\n\n\n\n

Getting Your Health Supplement Company to The First $100,000<\/strong><\/h2>\n\n\n\n

Let\u2019s assume you\u2019ve already launched your business. You\u2019ve jumped over the hurdles of formulation, manufacturing, distribution and everything else. <\/p>\n\n\n\n

You have a product and a website or a funnel to sell it. <\/p>\n\n\n\n

Now all you need are sales. <\/p>\n\n\n\n

Or you might have a few sales that trickle in slower than you\u2019d like.<\/p>\n\n\n\n

You might be selling only on Amazon at this point. <\/p>\n\n\n\n

That\u2019s a good place to start but you don\u2019t want to build a business that relies solely on Amazon. <\/p>\n\n\n\n

Selling on Amazon<\/a>, means you don\u2019t own the customer. <\/p>\n\n\n\n

Owning the customer, means you control the communication to that customer and that\u2019s the key to getting to $5 Million.<\/p>\n\n\n\n

Plus Amazon can cut you off at any point.<\/p>\n\n\n\n

Amazon might be a good place to get cashflow and prove the market, but it\u2019s nothing more than that. <\/p>\n\n\n\n

Later it can provide a different role but this is all it is for now at the sub $100k point.<\/p>\n\n\n\n

You\u2019ll want to get sales from your own website if you\u2019re ever going to break out and climb the ladder.<\/p>\n\n\n\n

Let\u2019s look at some quick math, to get to the $100k mark you\u2019ll need to bring in 6 sales a day at an average order value (AOV) of $50.<\/p>\n\n\n\n

Average order value<\/a> is the amount spent each time a customer places an order. To calculate your AOV divide total revenue by the number of orders in one month. <\/p>\n\n\n\n

An AOV of $50 is very low, but remember, you\u2019re just getting started.<\/p>\n\n\n\n

At this stage, you\u2019ll likely be doing a lot of different things to drive traffic.<\/p>\n\n\n\n

You might be buying ads on Instagram, Facebook, Google Shopping, Google Display, Google Search, Influencers, and much more.<\/p>\n\n\n\n

Or trying different offers, headlines, promo codes and more.<\/p>\n\n\n\n

This is the wrong approach.<\/p>\n\n\n\n

The reality is that when you\u2019re trying to get to your first $100k, your entire company is in beta mode.<\/p>\n\n\n\n

It\u2019s one BIG experiment.<\/p>\n\n\n\n

The truth is at the $0 – $100,000 stage your sales are too low to really learn any true insights. <\/p>\n\n\n\n

You\u2019re searching in the dark with no flashlight. <\/p>\n\n\n\n

So every input gets you off track. <\/p>\n\n\n\n

Maybe you get 5 sales through Google Shopping and only 2 from Instagram. <\/p>\n\n\n\n

How do you know which is the better path? <\/p>\n\n\n\n

You don\u2019t. <\/p>\n\n\n\n

The numbers are too low to indicate success in any one area.<\/p>\n\n\n\n

Yet to get more sales, you need to spend more money on driving traffic. And you need to do that consistently month over month.<\/p>\n\n\n\n

If you can do that and narrow the focus, you\u2019re on your way.<\/p>\n\n\n\n

Your focus should be on one offer, and one traffic source.<\/p>\n\n\n\n

Only then can you begin to shine some light on your situation.<\/p>\n\n\n\n

As you figure out if this supplement business is going to work or not.<\/p>\n\n\n\n

That\u2019s really all your doing at this point. <\/p>\n\n\n\n

Seeing if this business is going to work or not.<\/p>\n\n\n\n

So that you can get to $500,000 in yearly revenue.<\/p>\n\n\n\n

The Slog From $100,000 to $500,000<\/strong><\/h2>\n\n\n\n

If you made it to $100k, congratulations. <\/p>\n\n\n\n

You\u2019ve gone through most of the fog. But you\u2019re still not out completely.<\/p>\n\n\n\n

It\u2019s still a messy journey of the unknown.<\/p>\n\n\n\n

You might have gotten to $100k with one single health supplement product. Or even a few (1 – 3 products) along your journey.<\/p>\n\n\n\n

But to get to $500k in annual revenue you\u2019ll likely need to add more products.<\/p>\n\n\n\n

Not much more than what you might have started with. <\/p>\n\n\n\n

Many multi million dollar health supplement companies only have 6 to 12 products. <\/p>\n\n\n\n

With only 2 or 3 of those being top sellers. <\/p>\n\n\n\n

And only 1 that’s responsible for bringing in all the new customers into the business.<\/p>\n\n\n\n

Adding more products allows you to have a backend.<\/p>\n\n\n\n

A backend is all of the products you sell to a customer who has already made an initial sale.<\/p>\n\n\n\n

Having backend products allows you to generate more revenue.<\/p>\n\n\n\n

It also allows you to offer additional up-sells in your acquisition funnel. Which will raise your AOV. <\/p>\n\n\n\n

You\u2019ll want to get your AOV to $100 at this level.<\/p>\n\n\n\n

You can do that by increasing your conversion rate or selling other products in the up-sell flow.<\/p>\n\n\n\n

You\u2019ll likely need both of these to get there.<\/p>\n\n\n\n

With a $100 AOV you only need 14 sales a day to reach the $500k mark.<\/p>\n\n\n\n

You\u2019re getting closer to the real game, which is a numbers game.<\/p>\n\n\n\n

But you\u2019re far from there.<\/p>\n\n\n\n

Even at $500k, you should not worry about hitting any target return on ad spend (ROAS).<\/p>\n\n\n\n

Adding a backend also increases the life time value of a customer. <\/p>\n\n\n\n

LTV is something that will be come important at a later stage.<\/p>\n\n\n\n

A backend will also help to increase the overall revenue of your supplement company to help you reach the next level.<\/p>\n\n\n\n

The easiest way to add backend offers is to sell your buyers affiliate offers.<\/p>\n\n\n\n

Adding affiliate offers is also quick. Since all you have to do is promote at that point, you don\u2019t need to create any new supplements or products.<\/p>\n\n\n\n

But what affiliate offers do you sell?<\/p>\n\n\n\n

Since they are supplement buyers, it stands to reason they will buy more supplements. <\/p>\n\n\n\n

So you can sell them other supplement affiliate offers that don\u2019t conflict with yours.<\/p>\n\n\n\n

Offers that are similar or that solve a sideways pain point will perform best. <\/p>\n\n\n\n

For example if you\u2019re selling a sleep supplement of your own then add an affiliate supplement for stress. <\/p>\n\n\n\n

If you\u2019re having trouble sleeping you\u2019re probably also under a lot of stress, that\u2019s an example of a sideways pain point.<\/p>\n\n\n\n

But there\u2019s also opportunity to sell non-supplement products. <\/p>\n\n\n\n

Again if you\u2019re selling a sleep supplement, give them an affiliate offer for a special sleep pillow. <\/p>\n\n\n\n

Or other sleep products outside of the supplement space, like a weighted blanket or a cooling mattress system. <\/p>\n\n\n\n

Once you learn what offers work then you can create similar products of your own to sell.<\/p>\n\n\n\n

But remember, you\u2019re not looking for data here. <\/p>\n\n\n\n

You\u2019re looking to increase revenue on the buyers you already have to get to the next level.<\/p>\n\n\n\n

The little data that you have at this stage is not something you can build on with any reassurance. <\/p>\n\n\n\n

There are simply too many anomalies happening at this level. <\/p>\n\n\n\n

Your traffic numbers and sales are still too low to really make heads or tails out of anything. <\/p>\n\n\n\n

And you shouldn\u2019t make decisions based on data at this stage. <\/p>\n\n\n\n

You\u2019re not ready to scale yet.<\/p>\n\n\n\n

But if you keep going you will make it to the next stage.<\/p>\n\n\n\n

Going From $500,000 to $1 Million<\/strong><\/h2>\n\n\n\n

Getting from $100k to $500k was a slog. <\/p>\n\n\n\n

But now that you hit this next milestone, you\u2019re on track to hit $1 Million in annual sales.<\/p>\n\n\n\n

And it\u2019s about to become a whole new game.<\/p>\n\n\n\n

When you go from $500,000 to 7 figures you finally have data that\u2019s actionable.<\/p>\n\n\n\n

This is the level where you start tracking return on ad spend (ROAS).<\/p>\n\n\n\n

It\u2019s about to become a numbers game and you need to start tracking data very closely now.<\/p>\n\n\n\n

This is where some learnings start to happen. <\/p>\n\n\n\n

But to get to that coveted 1 Million mark, you\u2019ll need to double down on what\u2019s already working. <\/p>\n\n\n\n

So if you got here with one traffic source, don\u2019t look at doing any new traffic sources. <\/p>\n\n\n\n

If email media buys are working for you then keep doing that. <\/p>\n\n\n\n

We covered email media buys with Neerja on an episode of the Health Supplement Business Mastery podcast<\/a>.<\/p>\n\n\n\n

If that\u2019s working, then test more email creatives. Test different email vendors. Test different email lists. But stay in the lane that\u2019s working for you.<\/p>\n\n\n\n

Don\u2019t get into Facebook or Instagram or any other kind of advertising. <\/p>\n\n\n\n

Stick with what\u2019s working. <\/p>\n\n\n\n

This is the perfect time to do pre \/ post split landing page testing. <\/p>\n\n\n\n

Where you\u2019re looking at data before and after you make a change. <\/p>\n\n\n\n

You likely don\u2019t have a high enough level of traffic or conversions at the $500k point so pre \/ post testing is a great way to get some learnings.<\/p>\n\n\n\n

But keep slogging through and soon you\u2019ll be at the $1 Million dollar mark.<\/p>\n\n\n\n

So that you can then\u2026<\/p>\n\n\n\n

Grow From $1 Million to $5 Million<\/strong><\/h2>\n\n\n\n

When you reach $1 Million, a major change happens to your supplement business.<\/p>\n\n\n\n

Things move faster at this level.<\/p>\n\n\n\n

Your team starts to flesh out.<\/p>\n\n\n\n

You\u2019re driving way more paid traffic to your funnel.<\/p>\n\n\n\n

And you\u2019ve expanded beyond one media channel. <\/p>\n\n\n\n

You might be doing a combination of channels that broadly fit into display, search and affiliate\u2019s sending traffic to your offers.<\/p>\n\n\n\n

And at this level you finally have enough sales to have some real data that you can learn from. <\/p>\n\n\n\n

Specifically lifetime value (LTV) on a per product basis.<\/p>\n\n\n\n

You start doing A\/B testing where you\u2019re splitting the traffic to the same landing page.<\/p>\n\n\n\n

Every improvement you make multiplies the return you get.<\/p>\n\n\n\n

You\u2019re concentrating on AOV and LTV.<\/p>\n\n\n\n

Through A\/B testing you\u2019ve dialed in your funnel to get to an AOV of $200. Or you\u2019ve also focused on increasing the LTV of your buyers through your backend offers.<\/p>\n\n\n\n

A $200 AOV is extremely healthy. <\/p>\n\n\n\n

And that\u2019s the point where you need to be to really scale an offer. <\/p>\n\n\n\n

But you might not be there until you\u2019ve crossed the $5 Million dollar mark. Even then it might be just a little further out.<\/p>\n\n\n\n

That\u2019s okay, you can still grow even if your AOV is not at $200 yet. It will just be more challenging. <\/p>\n\n\n\n

With an AOV of $100, you\u2019ll need about 30 sales a day to get to the $1 Million dollar point and about 90 sales a day with an AOV of $150 to get to $5 Million.<\/p>\n\n\n\n

To get to $5 Million you need to massively increase the customer acquisition side of your business. <\/p>\n\n\n\n

Customer acquisition is the new buyers you\u2019re bringing in to the top of your funnel. <\/p>\n\n\n\n

Bringing in new customers consistently is what the whole game is about at this point.<\/p>\n\n\n\n

So, your CPA (that\u2019s your cost per acquisition) needs to be as much as you can afford. <\/p>\n\n\n\n

Most people make the mistake of not increasing CPA.<\/p>\n\n\n\n

And thus they never break through the $1M glass ceiling. <\/p>\n\n\n\n

To get to $5 Million, you shouldn\u2019t be making any money on a sale here. <\/p>\n\n\n\n

All of your ad costs should go to the CPA. <\/p>\n\n\n\n

Pay as much as you can and you will get more customers. <\/p>\n\n\n\n

Your goal is to get a new customer for free.<\/p>\n\n\n\n

So you want to lower your ROAS. <\/p>\n\n\n\n

Many supplement owners actually go in the hole to acquire more customers. <\/p>\n\n\n\n

Before the $1 Million dollar mark this is a recipe for disaster. <\/p>\n\n\n\n

But after $1 Million, on your way to $5 Million this is how it\u2019s done. <\/p>\n\n\n\n

You can afford to go into the hole. Because you increased both your LTV and your AOV to get to this level. <\/p>\n\n\n\n

Going in the hole means you have a negative ROAS. <\/p>\n\n\n\n

You\u2019re paying $3 to make negative $5, because you know your LTV and you have a backend at this point to make up that gap. <\/p>\n\n\n\n

So you\u2019re floating the money today to make more tomorrow.<\/p>\n\n\n\n

That is the Entire Journey in a Nutshell<\/strong><\/h2>\n\n\n\n

For the first $100,000 you\u2019re implementing best practices. <\/p>\n\n\n\n

It\u2019s a search through the dark to see if this business is viable. <\/p>\n\n\n\n

You\u2019re focusing on big needle movers like your offer and not much of anything else.<\/p>\n\n\n\n

From $100,000 to $500,000 you\u2019re in the slog. <\/p>\n\n\n\n

It\u2019s a slow journey and there are a lot of unknowns but you\u2019re starting to see the light at the end of the tunnel.<\/p>\n\n\n\n

Getting from $500,000 to $1M you\u2019re doubling down on what\u2019s working. <\/p>\n\n\n\n

You\u2019re still focusing on one traffic channel. <\/p>\n\n\n\n

Growing from $1M to $5M is a whole new game. <\/p>\n\n\n\n

You\u2019re taking bigger risks. <\/p>\n\n\n\n

And watching your numbers like a hawk. <\/p>\n\n\n\n

You\u2019re finally scaling your traffic channels and you\u2019re on your way to building a sustainable multi million dollar supplement company. <\/p>\n\n\n\n

Strap in and enjoy the ride.<\/p>\n\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

Breakthrough The Supplement Revenue Ceiling<\/strong><\/p>\n\n\n\n

This diagnostic reveals the specific bottlenecks limiting your supplement brand’s revenue growth and provides a clear optimization pathway for breakthrough.<\/p>\n\n\n\n

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GET YOUR DIAGNOSTIC<\/a><\/div>\n<\/div>\n\n\n\n
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\"Health<\/a><\/figure>\n<\/div>\n\n\n\n
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Listen to the Health Supplement Business Mastery Podcast<\/a> for for dietary supplement entrepreneurs and marketers. <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n

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\"\"<\/a><\/figure>\n<\/div>\n\n\n\n
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\"Listen<\/a><\/figure>\n<\/div>\n\n\n\n
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\"Listen<\/a><\/figure>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

Growing a supplement company to 5 million dollars per year from scratch can be overwhelming. To get to that level you\u2019re spinning multiple plates and dogging a ton of pitfalls along the way. And if you\u2019re not preparing for growth at every step, you\u2019ll likely never reach your vision. But, if you focus on the… Continue reading Growing a Supplement Company to 5 Million Per Year<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3482","post","type-post","status-publish","format-gallery","hentry","category-conversion-rate-optimization","post_format-post-format-gallery","entry"],"yoast_head":"\nGrowing a Supplement Company to 5 Million Per Year<\/title>\n<meta name=\"description\" content=\"Build your supplement company one step at a time. 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