When launching a new product, most supplement brands face restricted budgets or products they are unsure will succeed. That’s why they often decide to begin with small production volumes to test the market. If the reception of the first product is positive, you start wondering when and how to make the transition to large-scale production. This guide offers a framework to assess readiness to make that leap to the higher volume. Here are the steps that will assist in confirming your brand is ready for the big leagues!
Assessing Your Current Market Position
Before making the next step, it’s important to understand where you are at this point. That will tell you if scaling up is the right decision.
Here are some factors that can assist you in understanding your current position:
Sales Volume and Growth Trajectory
While analyzing sales trends, make sure to assess monthly sales carefully. For example, are they going steadily up each month? Do the numbers show that the product is particularly popular during a particular season? Can you connect the growth to a specific promotion or advertising campaign, or do you think it’s organic?
Generally, steady and consistent growth is one of the best signs that the next step should be increasing production volume. However, don’t forget to analyze relevant industry trends and assess market forecasts. Can you predict any changes or get insights into the long-term potential for your supplement? That can help you when devising the right strategy for the future.
Distribution Channels
We can divide distribution channels into online-only and brick-and-mortar presence. Most brands begin selling their product online since it’s a simpler and more accessible avenue. However, the fact that there’s no accessibility of your product in physical stores might be hindering its sales.
If you believe there’s sufficient potential for your supplement, you can consider partnering with physical retailers and distributors. That will require more investment in inventory and complicated logistics. It could be the next step to partner with a large retailer, and their interest is a good signal that you need higher production volumes in the future.
Customer Feedback & Demand
Listening to your customers has always been one of the best possible ways to assess your product. You can ask existing customers to complete a survey or send you their opinion about the supplement. That will uncover potential areas to work on, but may also indicate that the product is exactly what they were looking for.
Customer demand can also be measured better if you are offering a subscription model for your products. You can see clearly that you have 1,000 dedicated people expecting their bottles each month, and watch how that number creeps higher and higher. If you notice your active subscriptions are climbing, it may very well be the time to up the production volume you get.
Operational & Financial Considerations
Increasing production volume will require investing more capital in your supplement brand. You will have to take into account a higher upfront cost for the production process, which leaves you with less capital for marketing and other operational expenses. If your brand is in a place where capital is flowing and more readily available, putting in a larger order will get you a better bang for your buck.
Finally, don’t forget the operational considerations, such as how you plan to manage your inventory. You will need sufficient storage space for the ordered product batches as they arrive. If a single production run takes up most of your space, it could be bad for the business and mean you are not ready for more volume. But if you run out of stock, that could affect your sales negatively. Forecasting tools can help in optimizing inventory management strategies.
Supply Chain Resources
Ensuring a flawless supply chain is imperative if you want everything to work smoothly in a large-scale production. Here are the main considerations regarding the supply chain resources:
- Raw material availability. If you need large ingredient volumes, it’s important to find reliable resources. Components being unavailable for only a short period of time can significantly affect the entire production and subsequently hurt your profit.
- Lead times and logistics. Make sure to confirm that the manufacturer can fulfill the promised turnaround time, even for bigger orders. The entire order complexity grows as you increase production volume, so make sure to confirm it works logistically for both parties when planning for a new, larger order.
- Backup suppliers and risk management. It’s unwise to rely on a single supplier – having a backup can ensure you can compensate for disruptions and shortages without a large negative effect. You can also consider diversifying manufacturer locations to mitigate any potential problems that happen in a particular facility.
Quality Assurance & Consistency
If you are able to sell through your manufacturing batches, that’s a great thing. That’s at least partially due to quality assurance and consistency, so keeping that up is a necessity. It’s not easy to maintain product integrity at higher volumes. Consider that you’ll need adequate facilities and staffing. The manpower should have the necessary training, and the manufacturer must possess the necessary machinery for increased production volumes while maintaining all proper manufacturing practices.
Finally, don’t forget about relevant regulatory and compliance checks. If you plan to expand to other markets, different rules might apply there. Adhering to local or global industry standards and acquiring product certification can show that you are dedicated to maintaining maximum quality. Some standards worth mentioning include FDA, GMP, and NSF.
Brand & Marketing Readiness
You can make a product of superb quality, but it won’t be worth much if you don’t properly market it. Strong brand presence and advertising strategy are crucial, especially when producing products on a larger scale.
Another consideration is that your labeling and packaging should be ready for mass distribution. You will need to ensure the label printer can handle printing more labels to meet the higher volume requested. You also may now need to produce labels and instructions in multiple languages, insert barcodes, and consider that the packaging is shelf-ready.
Making the Transition
You can choose a phased or full-scale approach to the transition. Essentially, a phased approach enables you to do things one step at a time. You will slowly increase production while analyzing the demand. As the need increases, you improve production quantities. Pros include less risk and smaller investment, but the risk is that the demand is even higher than predicted, so you compromise potential profit.
A full-scale approach means you move to the next level volume right away. It’s great if your supplement is experiencing exponential growth or if you signed a partnership with a powerful retail chain. The pros include bigger potential profit and increased company growth rate, but the risk is that you might invest a lot without being able to sell through the inventory before its expiration date.
On this journey, it’s vital to pick a suitable manufacturing partner like SMP Nutra. You should be vetting at least several manufacturers before choosing the one that is the best fit for your brand and project. You should consider the company’s technology, capacity, and expertise. The contract and payment specifics should align with your budget and expectations. Make sure to choose a reputable and reliable manufacturer since the odds are that your partnership will be long-term.
Conclusion
Taking a supplement brand to a mass production stage isn’t an easy decision. It means you’ll get out of your comfort zone and take everything to the next level. You should only go with this if you carefully assess the product’s current market position. Once you think the demand is adequate and have the capital, you should begin looking into what is required to get a larger volume production order and align your internal teams with this new plan. Additionally, you shouldn’t neglect the financial implications of the move. Analyzing everything thoroughly and having a smart and structured approach is the way to ensure a successful transition while maintaining product integrity.
SMP Nutra is The Top US-Based Supplement Contract Manufacturer
As the leading contract supplement manufacturer in the US, we are ready to work on your large order needs. We can provide large numbers of finished goods or bulk supplement pieces.
We currently have an extensive catalog of stock formulas that you can browse and bring to your brand, or we can work together to create a custom formula.
Getting started is as simple as filling out our request a quote form or the contact us form.