Selling supplements online might be an attractive way to earn some extra income. However, those interested in the industry may have many questions, with a common one being; do I need a license to sell supplements?
The answer to that question is as simple as no. You do not require any license to sell supplements online. However, it gets more complicated, the more you look into it.
That is because there are certain things you need other than a license to sell supplements online.
The United States Food and Drug Administration or FDA has regulations for selling dietary supplement products under the Supplement Health and Education Act of 1994.
These regulations are applied to dietary supplements, and the manufacturers are legally bound to meet all the rules and guidelines.
If you want to create your nutritional formulas and manufacture the supplements on your own, you need to obtain a certificate and additional insurance.
Consulting with a business attorney is highly advisable at this step.
You can also go through a leading supplement manufacturer that has already certified their line of products and has all of the required resources to manufacture and label your line of supplements for your brand.
By doing this, you can entirely forego the need for licensing and logistics, and focus more on selling and marketing your brand.
The Rules of Selling Supplements Online
If a brand of supplements is misbranded or uses illegal/banned dietary supplements and ingredients, it is prohibited from being marketed and shut down by the authorities.
The facilities that manufacture your supplements are responsible for the safety evaluation and the labeling of the products before being marketed and sold to customers.
Within the US’s borders, you need to abide by the rules and regulations for selling supplements, along with adhering to the manufacture and nutritional labeling guidelines.
The correct wording on labels is imperative to the success of the supplements.
False claims, or saying your product can heal, cure, or aid with a specific ailment should be avoided. If you make these claims, the FDA, or Food and Drug Administration, will be ready to close down your business.
Have an Incorporated Business
It would help if you had an incorporated business to sell supplement products.
Incorporation is the process of the registration of your business as a corporation.
Three different parties control corporations and these are:
- Shareholders
- Directors
- Officers
Shareholders own the corporation by purchasing stock and elect a board of directors who decide matters of policy and management.
The board also appoints officers such as a Chief Executive Officer, a Chief Financial Officer, a Secretary, and so on who will run the corporation daily.
There are two main types of corporations, including:
- C-corps
- S-corps
C-corps are taxed once at the company level, and distribution of profits to shareholders is taxed again on shareholder’s tax returns.
The owner of the C-corps can elect to organize the business as an S corporation, which is taxed by itself differently.
When it comes to S-corps, the profits and losses pass through an owner’s tax return and are taxed at their income tax rates.
The switch between C-corps and S-corps can be done at any time throughout the life of your business. However, it is preferred if you know exactly which structure you plan on following.
To properly incorporate a business, you need to comply with licensing and zoning laws and conduct a business name search.
Once you name a registered agent, you need to draft articles of incorporation.
Some states require additional information such as an explanation of the corporation’s purpose, the names and addresses of the people who will serve on the board of directors, the names and addresses of the corporation’s officers, and how long the corporation will last.
You also need to file articles of incorporation with the state and write up corporate bylaws.
When it comes to the bylaws, you might also need additional information such as the number and type of shares the corporation can issue, the information about shareholder meetings, board meetings and the annual meeting that every corporation holds, how it approves loans, the frequency and procedure for financial audits, and other transactions.
Other Requirements
The products also need to have FDA approved ingredients in them.
Products that have a label that follows the FDA structure-function claims rules are also a must, as by not doing so, you are making a violation.
Insurance is smart to have, and most good manufacturers will include liability insurance with your product order.
To summarize, to sell supplements both through offline and online channels, you do not require a license. However, you need to follow a set of rules to set up an incorporated business and use ingredients approved by the FDA.
The most important factor to analyze and make sure you get right is the labeling, as the last thing you want to do is make a violation and get your supplements off the market even before you start the selling process.
This, in turn, leads us to the conclusion that just about anyone can get into the business of selling supplements, and they can go one of two routes:
They can acquire their own factory, formula, and certifications to make the product authentic and as per their standard and goal as possible.
They can use a pre-established company that has the required ingredients, has the required certification, and uses it to develop the supplements you want to bring to the market.
In any case, whatever your end-goals might be, make sure to set up an entire plan from the very start, so you do not get lost or sidetracked along the way to your success.
Manufacture Your Supplements With SMP Nutra
Having high-quality supplements is crucial to the success of your supplement brand. SMP Nutra is a leading supplement manufacturing facility that can manufacture any type of supplement.
We are also capable of producing capsules, softgels, tablets, gummies, and more. We also offer design services to make your supplement look professional and attractive.