Niche Supplements - Creating a Brand

[Zach]

My wife and I created a women's supplement for a chronic medical issue and are selling it on Amazon & Facebook. The product is for something none of you have probably even heard of. Very niche.

In a couple months we sold out of inventory (3500 bottles) and waiting on our 2nd round of product to be delivered to our shipping center! We ordered 12,000 bottles this time around. Like 30-40% margins by the end of it....Things are going well! Mostly racking sales from paid FB campaigns. I come from a paid marketing background, so paid acquisition is our strength aside from the niche domain knowledge.

We have about 80 reviews with a 4.9 star average now across our website + Amazon. The most exciting part is it is a highly-likely rebill kind of product (this product is not a cure but a TREATMENT of a chronic issue, and it works better than most anything out there, but few know about it still). Were profitable on the FIRST sale soooo.....the rest is gravy (I hope).

Picking it apart, I'm trying to figure out if there's a brand strategy worth doing with our current product as well as duplicating our existing setup to new niche supplements. This has been really successful outta the gate, but I could be getting gassed up over dumb luck of a relatively new product.

One thing I've noticed quite a bit in supplements is this "generic vitamin shop" feel to them. I'm seeing a ton of supplement shops that seem to sell everything under the sun and many of the products are unrelated. They don't care about creating a "brand" in the space, they just sell product or "what's hot" at the time. Just thinly skinned white labeling.

Amazon-only stores are super common too. Shitty looking products ranking big for random niche keywords and still managing to get thousands of reviews. I just think its crazy to have products with so much gas behind them (ones that medically treat stuff) AND having virtually no brand behind them. Like what a waste of opportunity. Everything in me wants to create a dominating brand in some of the niches I'm looking over.

I think most of these competitors would fall into this category: "You don't have a company, you just have a product"....I'm trying to not find myself in that same boat. Given our current product is 1 ingredient in a capsule, we got 0 defense against anyone who wants to take us on. Hence the need to brand ourselves. So we're doing lots of things within our store to try to become an authority for people with this given problem. We want to dominate the category.

While our competitors basically rank, bank, & call it a day on Amazon, we're on social media, writing blog posts, working with influencers, doing paid search, doing paid FB, doing paid Amazon, product upsells, email marketing, retargeting, etc. Trying to hit all of the channels for our stuff. We feel like the minority doing all this stuff in some of these niches.

Another example of what I see a lot of...let's say problem X was for chronic dry skin. Consumers usually hop on Amazon and type in something around "chronic dry skin treatment", end up at a page for a product that looks decent, and buy. But is there any other interaction with the brand? Not really. This product is damn-near an Amazon-owned product. The customer sure is Amazon-owned. I think the brand loyalty is ULTRA low in this scenario, but this is a very common scenario in the supplements business for niche products.

With the current brand we own, we're going the opposite direction of the above scenario. We have lots of things built into our brand to make it memorable, keep people coming back (to OUR site, not Amazon), and the big hope of all the extra effort is that there's actual LOYALTY going on for our ability to educate, entertain, and provide solutions for our customers.

The reason I create this thread is because I'm looking for confirmation on a strategy I see & would like to invest heavily into if I truly believe in the merits of it.

I want to create hyper niche-focused brands that sell supplements for problem X.

A whole brand about X problem.
A whole different brand about Y problem.
A whole different brand about Z problem.

This means I would essentially be launching 2-3 brands by the end of the year with a very similar formula to what we have going now. Hitting all channels actively & being so much more than an Amazon chop-shop.

My question is how/what way do you gauge the value of creating a brand in the given scenario? Is there any loyalty in supplements anyways? I'm new to supplements in general, any common ways to do it wrong? Do people give a shit that you're the EXPERT in problem X when your product is basically identical to these other guys that sell it for $2 cheaper on Amazon? In moments where product itself is identical, all you have is the brand, right?

Anyways, so many great brand marketers here & honestly I know little about it. I came from an affiliate hustle where the play was all about clicks & conversions. Screw lifetime value. The extent of my brand knowledge was reading some kinda brand-building authority thing by CCarter like 3 years ago. Going to reread, but thought I'd make this thread anyways.

Look forward to hearing some thoughts! Feel free to ask questions, I'll be here to answer!

 

[Janiform]

We feel like the minority doing all this stuff in some of these niches.

You feel or you know? Big difference. Check other states, same language countries, etc. just to be sure. Also, it doesn't last. The barrier to entry is low with supplements.

I want to create hyper niche-focused brands that sell supplements for problem X.

Sounds like you're trying to (re)invent the wheel multiple times before figuring out how a wheel works. Better said: I'd first make sure the majority of brand 1's sales come from owned media, like your site, email lists, etc. before moving on to brand 2,3,4. Why try to have multiple headaches at the same time? Effectively, you'll be using brand 1's revenue to get new brands set up, so if it relies on external platforms too much and they ban or limit you... you're done. Once brand 1 is "independent", though, you're solid.

Do people give a shit that you're the EXPERT in problem X when your product is basically identical to these other guys that sell it for $2 cheaper on Amazon?

No. Everybody says they're the expert. People only care about the question "what's in it for me?" so how it improves their life. Does it alleviate pain/inform/inspire/entertain? Price is a strong incentive, but competing on price is a bad idea. Compete on great support/delivery, etc.

In moments where product itself is identical, all you have is the brand, right?

No. Besides product, there's price, place, promotion, people, processes and proof (the 7Ps). And even if some guys have the exact same product for the same price, offering it at the same places using the same promotionals, and so on... there's still strategy. And speed of execution. And business models. And technology. Thinking a brand is all you have is a limiting belief, man.

 

[Zach]

I don't know how to do multi-quote, so I'll just give general feedback based on what I hear from @Janiform so far.

1. Yes we feel like the minority because I've done fairly extensive traffic acquisition research on our competitors and what their businesses look like. Most of them I can't find brands of any sort. They exist as one trick ponys that rank on Amazon and that's it. I've already changed languages and searched different geos for these products, and they are nonexistent in other geos. I'll find many amazon stores with thousands of reviews, then google their name, and nothing shows up. They're fully tied to Amazon and got nothing outside of it. Or they have a website with no traffic & looks like crap.

The only area of this that I don't have visbility into is if these brands have large brick & mortar presences. I haven't seen them in Walmart/Target/RiteAid though so I'm doubtful of this.

I just can't help but see lazy, short-sighted marketing here with the niche products I'm focusing on. Everybody sitting waiting for someone to type in a keyword while we go out and GET PEOPLE who never knew to type in our product keywords. We advertise to people telling them about their problem & how we've solved it for thousands of women. That's the big difference between us vs them. They wait for Amazon to feed them sales, we go get people who don't even know what these products are.

"The barrier to entry is low with supplements"

Yea feels like it, hence my focus on trying to do things that can't be so easily replicated. Loyalty. How to generate amazing loyalty?

2. "Sounds like you're trying to (re)invent the wheel multiple times before figuring out how a wheel works. Better said: I'd first make sure the majority of brand 1's sales come from owned media, like your site"

70% of our sales are from our site. Amazon is just the cherry on top. We aren't trying hard on Amazon, but people just see us around, and head over there and type in our brand & buy. Something *super* interesting about Amazon is that our specialist in there has said our rankings have surged for a lot of keywords because we're bringing in 3rd party traffic a lot. He says he's never seen a product skyrocket in rankings so fast. Promising to hear & a real competitive edge for us - we can get outside sales while others can't and Amazon is handing us rankings because of it!

That being said, our sales are primarily generated via paid FB campaigns. So if that campaign dies, we're in trouble. I absolutely feel exposed with this. However, our FB campaigns have already died 1 time on us, and I was able to reinvent the angle a little bit & then it did even better. With every successful relaunch I gain confidence in the viability of this model. I'm doing the best I can to diversify traffic sources too though. Influencers are actually working well for us. Paid search + ebook are in the works as I found a sneaky competitor doing that approach. Google Shopping, B&M stores giving out free samples are a few other methods we're doing. Google display & native up next.

The philosophy of waiting until you're 100% on your own feels too risk averse to me. I'm not fueling expansion with profits from this biz, I'd be fueling new brands with my own cash because I believe I've got an edge. I don't have a lot of supplements industry knowledge, but I know 10x more about acquiring consumers than these competitors. So far I'm smashing it. Is this enough to bet on an expansion strategy?

3. "No. Everybody says they're the expert. People only care about the question "what's in it for me?" so how it improves their life. Does it alleviate pain/inform/inspire/entertain? Price is a strong incentive, but competing on price is a bad idea. Compete on great support/delivery, etc."

You're right everyone does say they're the expert. I think I just said this wrong. I think I'm taking on a role of doing a lot of educating for the consumer & finding people who didn't know they had a solvable problem (they mark their issue off as 'oh well, it'll always be this way'). That makes me an expert in their eyes because I changed their mind/showed them something they didn't realize. This aspect alone seems like a highly loyal aspect. This is a huge assumption, but it feels right? WE showed them there was another way. And it worked for them. Why would they switch when things are going good? So don't screw it up & continue to create things that separate us from everyone else.

And no, I'm not competing on price. We're the priciest in the market and I don't care.

 

[Ryuzaki]

One thing you can consider to gain an edge before anyone else even joins the party is to have a proprietary blend. In these cases (you'll have to look into it, I'm not entirely sure) you don't even have to break down all of the ingredients. It can be like...

Ingredients: 97% main ingredient, 1% some other attractive ingredient, 2% proprietary blend.​

Within that last 2% you can have a ton of marketing magic. You can treat this one ailment with one ingredient, or you can have a double tiered attack vector where the proprietary blend enhances the uptake of the primary ingredient while supporting blah blah where the problem occurs!

Then you can have a branded product name too, versus something like "Vitamin C." Now you have Brand Name's Proprietary MagiCfix 9000.

And instead of having multiple brands (starting over each time) you can have several supplements under one brand name, each with their own special name. I get that this might throw off the segmentation of the marketing, put you can have separate landers for each product too, like mini-sites all on the main brand site. Should be able to easily segment customers and interested users in your email lists too.

 

[Zach]

@Ryuzaki

1. Yes totally have thought of adding X% proprietary blend. I've even seen competitors do this and I figured it was for reasons you mentioned. For a defensible edge. However, medically speaking our product is super sensitive and adding in non-essential ingredients scares my wife (who knows everything about the issue). One of our larger competitors completely changed their recipe from 1 ingredient (same as ours) to a blend of like 8-10 different ingredients and all their customers have done is complained and left them for it. So we're carefully considering this, but keeping "true" to what people actually want is a priority too.

2. Yes instead of calling our product the literal ingredient name, we named it something to try to make it seem more about us & less about the 1 ingredient.

3. Segmented brands vs One brand....This is one of the core ideas I am trying to grasp. I don't really want to have 10 different niche products housed under 1 company. I'd love to have each company be a "specialist/authority" for each supplement. I realize the cons to this, but I think there are pros.

Here's the exact type of scenario I don't want to be in: We Sell Everything! (and they don't have a website)

For supplements I'm looking at as well as customers of my current business the people are really detailed, chronic problems. I just think having a very catered brand to their needs is very comforting for them because they've tried so many products & mostly they've resulted in failure, hence the 'chronic' nature of their issues. My wife has had multiple customers crying on the phone telling her how life-changing our product has been. Turns out our best FB campaigns talk VERY little about the product, and instead are straight up copy/paste emotional, heart-felt reviews from customers on our site. People see these ads on FB and go "holy shit that's me too!"

I feel like when you're talking about life-changing supplements that are treating a medical issue, having a store with kids probiotics & pets vitamins right next to your "life changing supplement" is just cheesy. Our customers are highly emotional with their chronic life-long struggles & appreciate brands that cater to that desire to help diagnose & treat their problem. Just for the record, this paragraph I am not sure about, only going with gut instinct. One of the larger issues & reasons I created this thread. When it comes to chronic medical issues, do specialty brands outperform generic catch-all brands? If so, why?

 

[Janiform]

I'll find many amazon stores with thousands of reviews, then google their name, and nothing shows up.

Sounds like you did your homework. I don't know how much Seller Central experience you have so don't take this the wrong way, but there are many brands in virtually every market that operate different entities (sometimes even in different countries) for their e-com and marketplace channels. I've worked for one and while doing hardcore enforcement for them I encountered many other "hidden" players you won't find by simply Googling an AMZ brand name.

Long story short: if you're confident you're among a minority, great, but don't assume it lasts and definitely don't analyze your market from an overconfident mindset. Overconfidence kills.

70% of our sales are from our site.

The philosophy of waiting until you're 100% on your own feels too risk averse to me.

Gotcha. Didn't know you were already at 70% owned and agreed that waiting for 100% might not be the best move.

This is a huge assumption, but it feels right?

Dangerous statement right there haha. The medical arena might have better stickiness for customers. People will always buy based off of emotions first and logical reasoning (justification of emotions) second, so getting data directly from them to figure out what inspires loyalty would be a smart move. Survey those fuckers! And test everything.

When it comes to chronic medical issues, do specialty brands outperform generic catch-all brands? If so, why?

You might want to take a look at Bayer. Huge multinational, they do a little bit of both last I saw.

 

[Zach]

@Janiform

"I encountered many other "hidden" players you won't find by simply Googling an AMZ brand name"

...great tip. Hadn't considered this.

Looks like Bayer has a ton of pharma brands, but from what I saw they participate very rarely in the type of marketing we're doing. They don't even have websites really. Looks like they just seem to focus on commercials + "ask your doctor" kind of sales process. They are probably just at every pharmacy in the US and directly get fulfilled there. True pharmaceuticals rather than supplements. They obviously know they are neglecting the online marketing game and it is a conscious decision to do so. Doctors do their marketing for them.

We're more of supplements - stuff you don't need a prescription for. The model we're going more off of is DollarShaveClub. All online customer acquisition & get LOYALTY to our stuff by delighting our customers in any way we can.