It has never been a better time for private label dietary supplements – the industry is fascinating! Dietary supplements have been credited for saving lives, and in some cases, they have also been blamed for taking lives. In its early beginnings, consumers largely thought these products were no more than ineffective, even potentially harmful “snake oil”. In recent times, most especially since the pandemic, consumers and have increasingly been relying on these products to provide them with good physical, mental, and emotional health… and with good reason. Scientists have also been studying the potential benefits of supplements in the prevention and treatment of Covid-19.
The dietary supplement industry has grown consistently year after year, and it shows no signs of slowing down. Some reasons for this growth are increased consumer awareness of the importance of preventative wellness, the increased ability to purchase trusted supplement brands online, increased transparency in supplement labeling, and the significant buying power of millennials, who have a renewed perspective of the value of supplements and their health.
This has resulted in more new private label supplement brands on the market than ever before – even pharmaceutical companies are entering this natural space! But just like the products themselves, the ins and outs of successfully navigating this territory are not for the faint of heart. There is a lot to learn, starting with understanding how different private label programs work and how to choose the right manufacturer for your brand.
This Ultimate Guide to Private Label Dietary Supplements will provide information about the main differences between private label and contract manufacturing programs for dietary supplements, and how to choose which one is right for you. It will outline some of the biggest risks you might face when starting your own supplement brand, such as balancing inventory levels with sales or making label claims that are non-FDA-compliant. It will highlight some of the key advantages of utilizing a private label program, such as speed-to-market and the benefits of having proven formulas. Lastly, it will guide you through the top 10 factors you should consider when choosing your private label supplement manufacturer.
The Difference Between Private Label and Contract Manufacturing Programs for Dietary Supplements
There is often a misunderstanding of the differences between a private label program and a contract manufacturing one. Here are the main differences between them:
- Private label products (or stock products) are pre-formulated and pre-packaged. The products cannot be customized through this program. The minimum order requirements are smaller, and the timing to get orders is faster.
- Contract manufacturing happens when custom orders are produced to a brand’s specifications. Customization is possible through this program, but the minimum order requirements are higher and the timing is longer.
- A private label program is usually the best option for smaller companies, brands that are just starting out, those who are looking to get products to market quickly, or those who are interested in testing out a specific product before making a larger commitment.
- Creating a custom product through a contract manufacturing program can sometimes be the best option for larger companies, established brands, or those who have a novel idea or other specification that cannot be successfully addressed by using stock products.
How to Manage the 3 Biggest Risks of Offering Private Label Supplements
The FDA has recently stated that three out of every four Americans consume a dietary supplement of some kind every day. This is yet another reason why so many new private label supplement brands are entering the market every day. It is important for these brands to understand how private labeling works, and how a good program can help them to avoid some of the biggest potential pitfalls:
- Inventory – As these products come with an expiration date, it is important to not have more inventory than can be sold before the products expire.
- Labeling – There are very strict rules on what can and cannot be said on the label of a dietary supplement. A quick way to ruin the reputation of a brand is to make a mistake and be forced to recall all of the products in violation.
- Formulation – This is an industry with thousands of ingredients, and although so many of them are safe, effective, and beneficial, some can have negative side effects, lack supportive research, or be completely ineffective.
A private label program should allow for lower-volume purchases, limiting the risk of bringing in too much inventory to efficiently sell or tying up valuable resources. The program should also offer a labeling service that will provide the opportunity for you to have your own brand name on your products without the risk of being non-compliant with FDA requirements. Lastly, by taking advantage of pre-formulated private label products, you will know the research has been done to use the appropriate forms and doses of each ingredient, that the combination of ingredients is synergistic and beneficial, and that the product has undergone the testing required to guarantee it is safe and effective.
Why Branded & Trademarked Ingredients Matter for Private Label Supplements
With so many supplements on the market, it can be hard for consumers to know which products they can trust to provide the benefits they promise on the label. One way that some top-selling supplement brands distinguish themselves is through the use of branded ingredients in their products.
Branded ingredients provide clinically supported health benefits that communicate safety and efficacy to the consumer, which also justifies a higher price point for the product. Here are the three biggest benefits branded ingredients can bring to a brand:
- Quality Consumers Can Trust – Branded ingredients are usually manufactured to higher quality standards than generic ones.
- Science to Support the Claims – Because the supportive studies related to the ingredient can be linked directly to the product, it lends validation to the product by communicating quality, safety, and efficacy to the consumer.
- Compliance to Ensure Efficacy – Private label supplement manufacturers using branded ingredients in their finished products are often under contract with the ingredient supplier to include the ingredient in the way the studies are supporting it.
Private Label Program Essentials: Quality and Time-To-Market
Leveraging proven private label dietary supplement formulas is an excellent way to launch or fill out a brand. The two most desired benefits to be found in a gold-standard private label program are quality and time-to-market.
There are some easy ways to ensure the quality of your private label products, and to make sure your customer will know it as well:
- Certifications – An easy way for consumers to recognize a high-quality whole food supplement is to scan the label for any official seals, such as Certified USDA Organic or Non-GMO Project Verified. These seals, and others like them, are an easy way to communicate the high quality of a private label product.
- Branded Ingredients – Something that isn’t common to find in a private label supplement, but that inherently provides value and quality, is the use of branded ingredients. These ingredients have clinical research in support of their safety and effectiveness, and have undergone vigorous testing protocols to make sure their quality is of the highest standard.
- Whole Food Based – Also rare to find in a private label supplement is a true whole food based formula. They are very challenging to make, and only an experienced manufacturer can provide formulas that stabilize and concentrate the naturally occurring vitamins and minerals in fruits and vegetables. This will allow for the same important claims and certifications mentioned above to be made on the labels, which will immediately convey the highest standard of quality to the consumer.
Time to Market
The process for creating a custom formulation can take months, or even years. Utilizing pre-formulated, pre-tested, and pre-packaged stock products can be a huge benefit to a brand by allowing them to quickly enter the market in a number of ways:
- Faster Turn-around Times – Private label stock products are generally made on a regular schedule, so when an order comes in, it can be quickly pulled off the shelf, labeled, and sent right out the door, saving months of time in development, sourcing, scheduling, and production.
- Market Research/Data Collection – Offering a tried-and-true, tested, and well-received product can save a lot of time in the test-market / feedback-gathering stages of development.
- Finished Product Testing – Another advantage of using a pre-established stock product is that several types of testing will have already been done to the product, including real-time stability data, which is highly valued for its accuracy.
The Private Label Process: Optimized for Speed and Value
A private label dietary supplement program should exist to provide quality, variety, value, and speed-to-market. The products offered must meet the needs of many but still stand apart from the competition. Here is an inside look at what an optimized private label program does to provide these important benefits during each stage of the private label process:
- Formulation – Using Safe, Effective, Symbiotic Ingredients to Create Successful Products. In an industry with thousands of ingredients to choose from, it is critical to know which ones are safe, effective, and work well together in a formulation.
- Production – Saving Valuable Time to Launch Products More Quickly. Avoiding the process of creating a custom formulation is guaranteed to save a lot of valuable time. It saves time in the formulation stage, and also in manufacturing the orders as the PO’s are placed. Placing orders that can be pulled from available inventory is certainly the quickest way to get a product to market, and even in the case of larger private label orders, the desired amount can be added into a production run that has already been scheduled.Pulling stock products from existing inventory or planning for larger private label orders this way can save months in getting a product to market.
- Packaging – Utilizing Smart Packaging Options. To effectively meet the needs of thousands of clients, the packaging for private label products has to be practical. If given the option, it is likely that 10 different brands would choose at least 8 different packaging types as a first choice, which would make it impossible to provide these products at low volumes and/or reasonable prices. Therefore, private label products must utilize smart packaging options that will make sense in a multitude of situations.
- Labeling – Providing FDA Compliant Labels With Low Fees. There are two benefits to utilizing the labeling service offered through a private label program. 1) It allows the brand to order in fairly low quantities. A small number of labels can be printed out in the needed quantity and applied to the products as they are ordered, sometimes even hand-applied. This provides value to the brand by avoiding label inventory fees or forcing them to purchase in much larger volumes. 2) When a private label manufacturer supplies the labels for the products, they are responsible for the labels being compliant with FDA requirements. This should provide the brand with a sense of comfort, and confidence in knowing that their manufacturing partner is invested in the safety and success of the brand.
- Cost and Value – Using Experience, Relationships, and Market Knowledge to Provide Value. In order to provide value to their clients, the manufacturer needs to be an expert at keeping the cost of the formula down while achieving the highest possible quality. Years of experience have provided trusted supplier relationships and access to the newest and highest quality of ingredients – benefits that can be passed on to the client. Additionally, the manufacturer has to understand the current market for these products so that they can accurately calculate product costs and provide suggested retail pricing.
- Support – Providing Expert Guidance From Product Selection to Sales Promotions. A seldom-discussed benefit of working with an experienced private label supplement manufacturer is the level of support the brand might receive. Throughout the process, there should be assistance, if desired, with decisions such as which products to offer or identifying strong selling points for the products. When working with established, pre-certified private label supplements, there should be a knowledgeable point of contact and/or sales rep to help guide the brand, right from the beginning.
The Advantages of Scheduling in Private Label Supplement Manufacturing
Placing private label orders for stock products that can be pulled from available inventory is certainly the quickest way to get a product to market. Often the turn-around time for orders like these is just a few days, especially with small-batch orders. Sometimes, however, the orders are too large – or too frequent – to be pulled from available inventory. Trying to meet the needs of hundreds (or thousands) of brands means that inventory needs to be carefully allocated, so as not to run out.
As an easy example, let’s say that a manufacturer has 2,000 units of vitamin C in stock this week. They can give 200 customers 10 units each. However, if one customer needs 1,500 units, they would work with their sales rep to plan ahead and add those units to the schedule. That allows that customer and the 200 others wanting vitamin C to all get what they need. This is one way that planning for larger orders means that nobody gets shorted.
How to Start Your Own Private Label Dietary Supplement Brand
There are many reasons people choose to launch their own private label dietary supplement brand. This outline will help guide you through the smartest, safest, and simplest way to get started.
The 6 Steps to Private Label Success
- Understand Your Brand – What characteristics will define your brand? Will your products be Vegan or Organic? Are you targeting athletes or women? You will want to have a good idea of who you will be selling your products to and what they care about.
- Create Your Brand Image – If you don’t already have a logo for your business, then this is what you will want to do next. You want your branding to carry the correct tone through whatever medium your branding will be viewed, be it the product label, your website, or a social media page, etc.
- Plan How You Will Market and Sell Your Products – Next, you will want to give some thought as to how you will best reach your target audience. Once you have decided where you’ll be selling your private label supplements, you will get an idea as to what resources you will need to support that type of sale, which will be helpful when you are choosing your private label manufacturing partner.
- Legally Set Up Your Business – If you are not already in business, it is important to get set up as soon as possible. You want to make sure you are operating a legal business and that you will be protected should anything adverse occur.
- Decide What Products You Want to Offer – Think about what will set your brand apart from the competition when you are deciding which products you want to offer. Then, start with a small investment of some key products that go along with the values and goals of your brand. If those initial products are successful, you can slowly continue adding private label products to continue to round out the line.
- Research and Choose a High-Quality Private Label Supplement Manufacturer – There are many reasons to go with one manufacturer over the next, and it all comes down to what is important to you and your brand. Your priority might be speed to market, product selection, minimum order requirements, or product quality. It may be a combination of these factors, or something else entirely. As long as you know what services are priorities for you, you should be able to choose a private label manufacturer that meets your needs and that you can establish a long-term relationship with.
The Top 10 Factors in Choosing the Best Private Label Supplement Manufacturing Partner
There are a lot of private label supplement manufacturers out there, and it can be a challenge to know which one to choose. These top 10 key factors will help you determine whether a private label supplement manufacturer is a good potential fit for you:
- Minimum Order Requirements – Being able to purchase in quantities that are not risky and feel manageable to you is very important.
- Selection of Products – Making sure the manufacturer has a large selection of products so you are able to effectively grow your business.
- Pricing – Be sure that there is a decent margin for you to make a profit off of the sale of the products, and they are competitively priced.
- Turnaround Time on Orders – Look for a manufacturer that can get your orders out within a week or two to keep your cash flow and inventory levels balanced and comfortable.
- Availability of Products –Check with your sales rep to make sure that out-of-stock situations are not common, and that they can work with you to plan for larger orders if needed.
- Label Fees –Look for a private label program that includes the labeling service with every order, so you know exactly how much that part of your overall investment will be.
- Sales Support – You will want your private label manufacturing partner to offer sales support of the products and the market when you are ready to begin selling.
- Quality – Whether it is through the inclusion of branded ingredients, organic formulations, or vegan offerings, looking for a manufacturer who has expertise in any area you want to be a highlight of your brand, so you are assured that those products will be of the highest quality.
- Facility Certifications – At the very least, you want your manufacturing partner to have GMP (Good Manufacturing Practice) Certification. There may also be other certifications that would be necessary to produce specific types of products, for example, if you intend to have the word “Halal” on your product label, both the product and the facility must be certified by a third-party Halal certification agency.
- Product Certifications – In addition to facility certifications, you will most likely want your manufacturer to be able to provide certain certifications for your products, as well. Today’s supplement consumer places great value on well-recognized certifications such as USDA Organic, Vegan Certified, or Non-GMO Project Verified. If your goal is to deliver high-quality, on-trend products to your consumers, you will want to ensure right from the beginning that your manufacturing partner will be able to provide certifications such as these on your products.
We hope that this guide will be helpful to you in gaining a solid understanding of how a successful private label dietary supplement program can work for you. Not every manufacturer you consider will check every item off of your list, but these posts should come in handy as you work through the process of identifying what is most important to you. At the end of the day, you want enough information to be able to choose a private label manufacturer that meets your needs, and that you can establish a long-term relationship with.