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Categorized | Shoestring Startup

How $3,000 Grew Into An International Supplement Company

How $3,000 Grew Into An International Supplement Company

Jonathan Bechtel

My name’s Jonathan, and I’m a first time entrepreneur. I’m a 27 year old one-man company who’s started a health supplement company called Health Kismet. It makes a condensed vegetable powder called Incredible Greens that combines 35 different greens, herbs, and probiotics into a sweet powder.

Small Beginnings

The specific idea wasn’t started by grand design, and was almost an accident. I had wanted to start my own company for a while, and originally wanted to develop a web application in consumer banking, which is the industry I originally worked in. But as time went on I began to realize I didn’t have the web development skills nor the heart to follow through with all the complications of starting a finance company. The stakes were too high and I didn’t want to have doubts about my commitment.

So I turned to my second love, nutrition. I went to college for nutrition sciences and have authored quite a bit of research on the subject and I wanted to develop a drink my dad had made that he used to treat gout. It was a complicated mixture that had over 100 ingredients inside of it, but it turned out to get a liquid like that manufactured would cost a minimum of $250,000. That was a bit much for my tastes, so instead I shifted my focus to powders. I found a manufacturer that specialized in working with startup companies and small order sizes, and decided the two of us were a good fit.

My initial order was less than 500 bottles, and my total budget for manufacturing, legal work, and equipment/marketing was a total of $2,500. Not that much for the industry. The low startup cost was in large part due to the manufacturer having a stock recipe that was very similar to what I already had in mind. In general, this is an important aspect of keeping order minimums down in the supplement industry.

Growing Pains

Being a first time entrepreneur, I wasn’t sure where to start with customer acquisition. I’d always been a talented writer, and started to blog about health and nutrition about 6 months prior to the product being released. I had developed a small mailing list prior to release, and a wee little bit of media coverage.

It didn’t add up to much. I sold $300 my first week. Not exactly enough to pay the bills. But I kept trying to harvest leads, and things slowly got better. I gradually began to accumulate links to my site, continually sought out reviewers/bloggers to cover my product, and most importantly, people really liked Incredible Greens. Everybody agrees that it has a great taste for the ingredients included inside of it.

Month after month sales began to creep up, and the vital signs behind the company were always good. Everyone liked it, traffic to our website slowly began to creep up, and a lot of the seeds we planted eventually began to harvest.

Customer Acquisition

An important lesson I learned along the way is which advertising methods worked for me, and which one’s didn’t. For the most part I decided organic acquisition channels were the most worthwhile. The customers had a stronger brand loyalty, and communicated more about why they liked the product.

I tried using AdWords and buying up ad space on different websites, but the results didn’t count for very much. Traffic was sparse, the conversions were dismal, and I decided that it wasn’t worth the money to get good at traffic buying.

So instead I invested heavily in blogger outreach, my own content marketing, youtube, and a few offline marketing efforts. This made the initial going a little more difficult, but I firmly believe it was worth it in the long run. I wrote thank you cards to every customer, responded to every e-mail, etc, and it slowly began to pay dividends. We started to get a lot of facebook traffic to our product page purely through word of mouth, and I would regularly get customers based off of customer recommendations.

However, when we first started out, I kept running into a problem with the novelty of our company. We only sell bottles in one size, and lots of people wanted to know if there was a smaller sample that they could try, in case they didn’t like it. We also marketed our product to a lot of market segments that were previously unaware of a greens powder, and they were hesitant due to unfamiliarity.

Clever Marketing

So to overcome this objection we used a marketing technique that was fairly unique. We let new customers name their own price. As long as they told us how they found out about us and what they wanted to buy Incredible Greens for, we’d give it to them for the price they wanted as long as we still made money on it.

To some this might come off as foolish, but I believe it helped a lot. During our first batch we sold about half our bottles this way, and the majority of our returning customers were from people who bought this product by naming their price. We also got lots of recommendations from friends this way as well.

In addition to this marketing technique, we also offered bloggers a free bottle of Incredible Greens if they wrote up a review of the product for us. Getting the attention of bloggers is something that’s been notoriously difficult for many companies, but this offer worked surprisingly well, especially since we made it a point to pitch a lot of small-to-medium sized blogs to begin with. The fact that I’m a blogger myself certainly didn’t hurt. It takes one to know one.

What would typically happen is we’d have a review done, it would be positive, we’d get a lot of referral traffic, some people would buy, some other bloggers would offer to review it for a free copy, and others would name their price, we’d send a thank you card to all of them, everybody would be happy, and traffic/referrals /sales would creep up a notch. Wash, rinse, repeat.

This allowed us to continually acquire customers with a very low cost of acquisition, generate positive word of mouth, and grow our customer base without paying for advertising. The additional links also created a powerful link building scheme that eventually became self-perpetuating.

How $3,000 Grew Into An International Supplement Company What Worked, What Didn’t

Overall, here’s a list of all the different marketing channels I used, with a brief summary of how they worked for me:

  • AdWords – No success. Very hard to start up, big budget required to get right.
  • Facebook Ads – Some success. Ads attracted some fans, a few of which became valuable customers and referred others. Cost per fan was low, but I was unable to get a very high click-through rate.
  • Blogger outreach/product reviews – Very successful. Always generated quality traffic, quality backlinks, several sales, additional reviews, and was the least expensive of all the advertising methods.
  • Facebook/Twitter (non-paid): Not good for sales, but good for customer retention/engagement.
  • Direct Ad Buys: No success. I was disappointed here. I’d buy up ad space on niche websites, but it didn’t convert well at all.
  • Offline-marketing: Some success. It required a lot of ground work, and more muckwork, but was definitely a breath of fresh air compared to all the online marketing I did. In general I didn’t make this a first priority because it’s requirements were so different than working online. And I also didn’t like our label very much.
  • SEO/content marketing – success. Slow at first, but once it develops it’s a powerful tool. You get a continuous stream of qualified leads delivered right to your doorstep that are typically very loyal to you once they buy.

Future Plans

So Where Is Health Kismet right now? What’s in its future?

At the moment Health Kismet is firmly in the black, I’m still its only full-time employee, and it has plans to expand its product line within the coming months. If I had to set a road map for the company, it’d look like this:

  • Expand our international shipping options. We do US and Canada right now, but would like to extend our reach into Europe.
  • Develop a berries powder to go alongside our greens powder.
  • Develop down our vertical. Offer Incredible Greens in smaller packet sizes. This is a big one, but also the most difficult. Packets are labor intensive and require larger order sizes and have smaller margins.
  • Fine-tune our content marketing. We have a lot of material out there already, but it’s not aggregated very well. I’d like to condense the content we’ve created into a variety of different guides and use it as a basis to further build our online community.

What are the biggest mistakes I’ve made?

Probably tolerating sub-optimal situations for too long. In my experience the situations that didn’t work usually presented themselves as such very quickly, and it’s better to make a good decision quickly than a great decision slowly. Because in the long run the ability to keep all the balls juggling at the same speed greatly increases your chances of success.

Technically Health Kismet is a health supplement company, but I’ve never actually viewed it like that. It’s a portal to allow people lead healthier lives, and Incredible Greens is the way I monetize my ambitions.

I’m definitely looking forward to making it happen!

For anyone interested in following our company’s progress, I invite you to connect with us on Twitter and Facebook.

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