Opening a Supplement Store

[orangejuice07]

Have any of you guys been on Own a Supplement Store! Not a franchise! I have been doing research on them for the last 6 months and am seriously considering opening up a store with them. Its not a franchise (so no paying $250,000 for a GNC sign on your store) and they claim that every store they have opened in the last 12 years is still open and profiting. All you have to do is secure a store location and they come in and in 3 days you have a fully stocked store ready for business, already set up with pre-determined discounts from suppliers and everything. Its $85,000 for one store and I have the backing for capital so that will not be a problem. I would appreciate it if someone with a little more experience in this field would take a look at the website and give me an honest opinion.

 

[BillHilton]

First, go visit as many of their stores as you can.
Second, get a list of exactly what you will be receiving for the 85k. Then do your own research to see how much it would cost you if you procured all of that on your own.
Just my opinion -- the supplement industry is pretty mature. I buy most of mine online. The "real" good stuff is not sold in stores anyway. You have to have a good and compelling answer to this question: Why would someone shop at your place, and not online, and not at the Vitamin Shoppe down the road?

I get worried when I see phrases like, "offer assistance." That is pretty tough to define, and therefore to enforce.

 

[Nathan]

It looks great on paper after reading through some things. You still want to be very careful with a brick and mortar supp store these days with internet sales being what they are and at rock bottom prices. I wish you the best of luck OJ!

 

[orangejuice07]

Thanks for the responses. The city I am looking to open this shop in has no Vitamin Shops or any supp stores. The oil field has really boomed in this area in the last year and has brought alot of business here. The closest supplement store is more than an hour in each direction. They are currently building a new strip mall, several hotels, new wal mart, and planet fitness etc so there is lots of new developement going on there. I really think it would work but I am still going to do lots of research before I dive into this project.

 

[Superkman]

will they provide you with a set of "proforma" financial statements or a.k.a. "forecasted" financial statements?

These are very regulated so they can show you projections but its against the law for them to "guarantee" them...what is your internal rate of return (IRR)? if you invest $85k what kind of cash flow can you expect to get back? You should look at this over a 12 month and 5 year period.

The main thing with Supplement sales is being able to offer them online and use the location as a warehouse with storefront.

The Supp industry is very competitive because there are no barriers to entry. Meaning anyone can lease a space, make connections with suppliers, obtain wholesale prices, install a POS system, and start selling. The industry primarily competes on price so getting the cheapest inventory is one key factor to success. Also, developing an internal monitoring system to keep inventory turnover low (i.e., inv is sold and replaced every 30 to 60 days) is another key factor. If the company doesn't want to turn over revenue information a good place to snoop would be with your state sales tax revenue office, the sales tax information is public and you can use it to formulate realistic sales assumptions in your model.

good luck bro.

 

[hulkboy]

will they provide you with a set of "proforma" financial statements or a.k.a. "forecasted" financial statements?

These are very regulated so they can show you projections but its against the law for them to "guarantee" them...what is your internal rate of return (IRR)? if you invest $85k what kind of cash flow can you expect to get back? You should look at this over a 12 month and 5 year period.

The main thing with Supplement sales is being able to offer them online and use the location as a warehouse with storefront.

The Supp industry is very competitive because there are no barriers to entry. Meaning anyone can lease a space, make connections with suppliers, obtain wholesale prices, install a POS system, and start selling. The industry primarily competes on price so getting the cheapest inventory is one key factor to success. Also, developing an internal monitoring system to keep inventory turnover low (i.e., inv is sold and replaced every 30 to 60 days) is another key factor. If the company doesn't want to turn over revenue information a good place to snoop would be with your state sales tax revenue office, the sales tax information is public and you can use it to formulate realistic sales assumptions in your model.

good luck bro.

There is no sales tax on supplement sales. I have looked into opening up a store as well. The old place i used to run really never made money, we broke even month to month. But unless you can keep a high margin, which is hard with the internet, its not worth it. You can run it 7 days a week and still expect to bring home ONLY about 3 grand a month.

 

[illuminated33]

What about a smoothie/juice bar perhaps? I have been thinking about it myself.
Could do fruit/vegetable juices/smoothies and have protein/supplement drinks as well.

I think what others have already said that a lot of these stores are losing business to the Internet(more sales, cheaper, volume discounts, free shipping).

However, I do see one store doing fairly good and it's a mix between bulk foods, health products, supplements, vitamins, herbs, juices etc. Also has a person doing live blood tester, nutritionist.

let us know what's going with this endeavor.

 

[mjacked]

First, go visit as many of their stores as you can.
Second, get a list of exactly what you will be receiving for the 85k. Then do your own research to see how much it would cost you if you procured all of that on your own.
Just my opinion -- the supplement industry is pretty mature. I buy most of mine online. The "real" good stuff is not sold in stores anyway. You have to have a good and compelling answer to this question: Why would someone shop at your place, and not online, and not at the Vitamin Shoppe down the road?

I get worried when I see phrases like, "offer assistance." That is pretty tough to define, and therefore to enforce.

:yeahthat:, very good advice, internet is hard to beat

 

[magnus82]

I you are opening it where i think you are, you should do very well. The bigger problem being, finding a reasonable lease.

 

[DC4Life]

I like your idea, good luck :headbang:

 

[DoradoGuy]

It can work.

I have owned 20 plus business. Some with more success then others.:banghead: I now do my share of consulting. I guided my buddy in opening up his shop. He started with 75k but only used 55ish. The key is not to open up next to a gym and expect to get there business. You'll get some but it shouldn't be your life line. Busy strip center with a Starbucks or something is the way to go. You will have to reach out to the mom and pop training studios, Xcrossfit, high schools and local business; offer them a discount. The most important part, picking up a line that is not promoted on the internet and doesn't horror out the line. And of course a good product. You might want to private label a few of the energy stim drinks. 150% profit. Protein is expensive. Might want to look into Intek. Taste good mixes super easy. Customer walks in they're going to ask for your advice. My advice is not to promote internet product. My buddy runs at a 85% profit margin that's with averaging the products that customers request with little to no profit margin. If you are really serious you can PM me.

 

[Cometfball55]

Location,location,location is the key. Also being very knowledgable with products help. If you can impress every customer, word of mouth is the best advertisement!

 

[Performance Based]

Honestly, online retailers have a grip on the market. I have a friend who runs a few I think they are called "total nutrition" in the DFW area. He has four stores and struggles to pay his rent every month.

You simply cannot compete with online retailers period, unless you have name brand recognition (GNC/Vitamin world etc)

 

[lhouay]

Honestly, online retailers have a grip on the market. I have a friend who runs a few I think they are called "total nutrition" in the DFW area. He has four stores and struggles to pay his rent every month.

You simply cannot compete with online retailers period, unless you have name brand recognition (GNC/Vitamin world etc)

I concur, and I'll add that even the ones with brand recognition are struggling somewhat, unless you are the only Nutrition store within a 50 mile radius.
From a business standpoint nutrition stores (brick and mortar) are not that profitable because the niche you're targeting is relatively small and if you have to share that "small niche" with many other stores (depends on the location) and online retailers, your piece of the pie just got that much smaller. The majority of Americans don't even care about nutrition, now if you had one of those "Heart attack grill" joints, your niche would be 10x that of a nutrition store

 

[Bad Fox]

There is one thing that hasnt been mentioned. Advertising.... One of the very best mediums for advertising is radio. It makes the most sense from a cost aspect also. Not only do you want to get name recognition from your advertising, but also customers through the doors NOW!

What should you mention in your advertising? ...... Well.......you want something that appeals to the very largest group of potential revenue.....FAT PEOPLE! By marketing an in store brand of weight loss product with a compelling story that is based on the WoW factor... but also common sense and a compelling reason to try it, you will bring in the... well ... lets say.....most needy and least informed people who tend to try anything to get results.

Then once in the store you can set them up on a complete supplement regimen with the approach that Rome wasnt built over night and certainly not by one person........ Meaning.... make the customer understand that they must use a well rounded supplement approach and not just a single pill to do it all. And they must be willing to commit to a full 6 month regimen in order to see good results.

I think you will find that good proper advertising combined with highly skilled sales people will be the key when selling from a store front. Many people want to have their hand held and be told what they should do. If you rely on price to sell your products......... you will get smoked by the internet.

But remember.... you dont necessarily want those customers anyway. You want the less informed desperate people who will be more apt to form a relationship with their new SUPPLEMENT DADDY!

Good luck!

 

[Juicemart]

I agree with PMCChris. It is very difficult o beat the online retailers because they have a huge inventory. They can offer prices that you most likely couldnt because of the sheer volume they order. Even with all the advertisement it is hard to compete against retailers. Even though GNC is expensive they already have a built in customer base. If you wanted to open a shop the demographics would have to be right. Just not a good idea in this economy.

 

[Cbarbarian23]

I wonder if I know the town your talking about .

I think I do..maybe lol

 

[gogotren]

Never go into a business just because you like the business. What I mean is, you work out, take supps, right? Don`t open a store because of that. So many "business owners" are nothing more than people that know a trade and get their own work, but don`t know much about business strategy or managing people and finances, marketing, etc.

Look at alan mulally. He ran boeing, he was then hired by ford in 2006 when they were about to file BK. What does a plane guy know about cars? NOTHING and it didnt matter. He is a master strategist and business man that turned them around. Follow me?

 

[dslocs]

If you do open a store maybe if the internet has the product for cheaper you can match it as long as if the customer brings in proof for a legitimate source. Also it does sound like you have a good location to open a store but I would check to see if a GNC is going to be opening with the shopping center. I've seen many shopping centers and a lot of them always have the same stores such as GNC.

 

[Jude2]

It is a very tough business to be in. I would not do it again. Too many hours for small$$. The internet has killed this business.