The Eye-Opening Truth About Starting a Supplement Company (From Someone Who Lives This Stuff)
Summary — key takeaways
Starting is “easy”; succeeding is hard. You can white-label a premade formula for ~$5–10k. Growing a real brand takes unique products, cash, patience, and a lot of unglamorous work.
Copycat formulas are a money pit. If your “pre” is the same caffeine/creatine/BA/citrulline cocktail as everyone else, expect to be invisible unless you’re sitting on a media budget the size of a small country.
Budget beyond inventory. Website, insurance, overhead, payment fees, shipping, marketing, QA testing, label reviews, flavoring, formulating, MOQs, free fills, and returns—all real, all expensive.
Regulatory and QA aren’t optional. A spec, COAs, label compliance, and documented QA keep you out of recalls, warnings, and lawsuits.
Unique products win. Invest in proper formulation, testing, and flavor. Commodity SKUs (protein/BCAA/creatine) are bloodbaths on price and ads.
Roll out smart. Validate with one great product, get your unit economics right, then scale in phases.
(**all prices/figures mentioned below are approximate and not guaranteed.)
If that didn’t scare you away—good. Eyes open, sleeves up. Here’s the unfiltered walkthrough.
The fantasy vs. the grind
The industry gets pitched as the Wild West: $150B in sales, low barriers, and “10 easy steps” to a mansion, a Ferrari, and a permanent pump. Reality check: lots of launches; most don’t make it past year one. Money doesn’t just “roll in”—it leaks out through 100 tiny holes unless you plan for them.
I’m not saying it can’t be done. I’m saying it’s a slog: long nights, real stress, and meaningful capital. If you’re still in, let’s go.
“Starting is easy” (sort of)
Yes, you can start quickly with $5k–$10k by finding a contract manufacturer with stock (premade) formulas and slapping your label on. That’s why you see two “different” tubs with the same panel at your local shop.
Why premade formulas are a bad idea
Because they’re not novel. “Our pre has caffeine, creatine, beta-alanine, and citrulline.” Cute. So does everyone else. The giants will out-bid you on ads and bury you on page 1000. Unless you’ve got a seven-figure marketing budget, unique (and credible) wins. Premade is a quick way to learn how returns and dead stock work.
Growing is hard (and expensive)
Let’s say you ignore me and launch three stock SKUs: a pre, a BCAA, and a protein. What now? Now you meet the real cost centers:
Company setup, branding, and trademarks
Website build, hosting, apps
Insurance (liability, product, property, workers’ comp)
Overhead (space, people, utilities, bookkeeping)
Payment processing fees
Shipping & packaging
Marketing (paid, social, email, influencer)
Content
Product development (formulation, flavoring)
Pricing & margin math
Manufacturer selection & MOQs
QA program & third-party testing
Labeling & compliance reviews
“All the other” costs
Should you have scoped all of this before cutting a PO? Yes. Do many startups skip it? Also yes. Let’s unpack the big ones.
First moves (before you sell a single tub)
Budget the burn. Decide how much you’re willing to invest and lose before you pull the plug.
Choose channels. DTC? Amazon? Retail? (Each has different economics and expectations.)
Define your buyer. Who are you for—gym rats, endurance athletes, vegan crowd, keto, women’s health? Build a basic positioning & claims brief.
Name clearance. Check USPTO/TESS before you fall in love with a brand name. Then trademark name and logo.
Company structure & EIN. LLC/S-Corp/C-Corp—get advice; tax and liability matter. File with your state and get an EIN.
Insurance. Don’t skip it; more on that below.
Creative & labels. Hire a designer who understands supplement panels, die-lines, and print constraints.
Ops basics. Identify label printer, shipping supplies (Uline, etc.), and your e-comm stack (Shopify is the usual pick).
Margins. Model fees, freight, trade spend, and returns. If your math only works at scale, it doesn’t work.
Credit. Unless you’re bootstrapping in cash, set up a business card with useful rewards and reporting.
Your website is your storefront (and it can eat your budget)
Fast, clean, on-brand, and conversion-oriented wins. You need enough design, UX, copywriting, and light dev to not look like a scam. DIY if you can. If you can’t:
Build: $1k–$50k (site + theme + customizations)
Maintain: $500–$5k/month (updates, CRO, analytics)
Apps: $500–$1,000/month (subscriptions, reviews, email, quizzes, bundling, etc.)
Infra: ~$500/year (domain, SSL, email)
Bad UX, slow load, generic copy? That’s how brands die quietly.
Thinking “I’ll just do Amazon”? Great—now you’re in a different knife fight against millions of listings, ad auctions, compliance hoops, and review games. You still need brand assets.
Insurance (please don’t skip this)
We live in a litigious world. “Your fat burner gave me diarrhea.” “Your creatine made me lose too much weight.” I wish I were joking; I’m not.
Product liability (with recall coverage): roughly $2,000–$50,000+/year depending on revenue and risk.
Property/inventory coverage: ~$1,500+/year (fire, theft, water damage).
Workers’ comp: required if you have employees.
Without coverage, your company and you can be targets. Get a broker who understands supplements.
Overhead (it adds up fast)
Space. Start in your garage if you can. When you outgrow it, expect $1,000+/month for something basic; $2,000–$5,000+ as you scale.
3PL alternative. Many use a 3PL: think $3+/order + box fees + actual carrier charges. Worth it once order volume and opportunity cost justify it.
People. Early hires are expensive in time and money. A $12–$15/hour part-timer at 20 hrs/week is $12.5k+/year plus payroll taxes—and the “good ones” cost more. If you can do it yourself early, do it.
Utilities & internet. Budget $500–$1,000/month for electricity, HVAC (heat ruins product), water/sewer, and solid internet.
Taxes & books. Sales tax (including out-of-state rules), annual filings, and a real accountant when it gets complex. Expect $50–$200/hr for professional help.
Fees, fees, fees (the silent margin killers)
Payment processing:
PayPal/Stripe/Amazon Pay ~2.9% + $0.30 per txn
Shopify Payments fee stack (and extra % if you don’t use it)
Example: $10,000 revenue across 500 orders → ~$540 in processor fees alone. Price this in.
Also: some processors flag supplements as “high risk.” You’ll send labels, COAs, testing, and get approved…until you aren’t. Always have a backup.
Shipping isn’t cheap (and Amazon taught everyone “free”)
Rough USPS reality:
≤1 lb: ~$5 (First Class)
1–2 lb: ~$7–$11 (Priority)
2–5 lb: ~$10–$18 (Priority)
5 lb: “it depends” (and it hurts)
Options:
“Free” shipping (bake it into price)
Pass-through carrier rates (conversion suffers)
Flat-rate hybrid (my usual pick—share the pain)
Don’t forget boxes, tape, labels, and labor. It’s all COGS.
Marketing: if no one sees it, it doesn’t sell
You’ll need a scrappy plan across five lanes:
Paid search & shopping
Competitive terms like “best pre-workout” can be $1+ CPC and dominated by whales.
Start with brand terms and long-tail queries (Google Keyword Planner helps).
If you don’t know ads, either learn fast or expect $3k+/mo for an agency plus ad spend.
Social (organic & paid)
Instagram, TikTok, YouTube, Facebook, X—free to post; not free to win attention.
Don’t just hard-sell; deliver value (education, community, UGC).
If you outsource social strategy/management, think $500+/mo to start.
Email
Highest ROI channel when done well.
Capture with welcome offers, quizzes, gated content; nurture with value, not spam.
Tools like Klaviyo/Mailchimp will run $50+ and scale with list size.
Influencers & affiliates
Product-for-post is cheapest; larger creators charge $100s–$1,000s per post.
Pick creators whose audience matches your buyer. Track with codes/links. Prefer ongoing partners over one-off blasts.
Content (SEO & YouTube)
500–2,000-word articles and videos that answer real questions drive compounding organic traffic.
If you can write/film, do it. If not, credible writers run $250–$500/article (or $0.10–$0.20/word).
Copied/fluffy content gets buried; useful + original wins.
Product development (where brands are made or buried)
Most supplements are under-dosed, copycat, or both. If you can’t read and apply peer-reviewed research, hiresomeone who can.
Formulation: $5,000–$20,000 per SKU (or a royalty).
Flavoring: $1,000–$5,000 per flavor (it matters—a lot).
Commodity plays (protein/BCAA/creatine) are ruled by low COGS, massive ad budgets, and brand trust. If you enter, you need a real reason to exist.
Manufacturing: vet like your brand depends on it (because it does)
Find and qualify contract manufacturers. Ask:
How long in business? cGMP certified? Any other certifications?
MOQs, turnaround (6–12 weeks typical), payment terms?
Do you procure raw materials? Provide labels? Develop samples?
COAs, finished-product testing, and QA program details?
Who owns the formula? (Make sure you do.)
Label compliance review support?
References from active clients?
MOQs: 1,000 units is common.
Average “meh” pre: $5–$7 COGS.
Properly dosed: $10–$15 COGS.
Add labels ($0.50–$0.70), palletization, and freight ($600–$1,200/pallet).
Yes, that’s $5k–$15k tied up per run—before ads.
Payment terms: Expect 50% down; push for Net 30–45 on the balance if/when you build trust. Many won’t extend terms to new brands (they’ve been burned).
Turn times: Plan your cash and inventory. Order too early = cash idle; too late = out of stock.
QA program (this is where grown-up brands live)
QA proves two things: the doing and the documenting.
Specifications covering identity, purity, strength, composition (plus micro & heavy metals).
Finished-product testing to your spec; third-party confirmation is a smart move (~$1,000+/batch).
Organoleptic checks (appearance/taste/smell), fill weight, scoop yield, serving count.
Retention samples per lot and traceability.
Supplier qualification docs for all raws.
Mess this up and you’ll be learning the recall process from the inside.
Label compliance (don’t guess)
FDA regulates supplements. Yes, your label matters:
Font sizes, placement, and structure of the Supplement Facts.
Correct naming for botanicals/extract ratios.
Claims: structure/function vs. disease.
Prop 65 (if applicable).
DSHEA disclaimers and address/contacts.
Budget $1k–$2k per SKU for a real compliance review + $500–$1,000 for design work/revisions. It’s cheaper than a warning letter, recall, or a class action.
The “other” costs you won’t see coming
Expanding the line (new formulas, new flavors).
Order mistakes, reships, and returns.
Office kit (computers, desks, packing benches, signage, breakroom).
Racking (shockingly pricey).
Samples and giveaways (customers love them; margins don’t).
Specialists (photography, CRO, CRO dev bursts).
The toll on sleep and stress (very real).
Repeat after me: the costs don’t stop. Build a cash moat where you can.
Yes, it’s hard. It can also be fun and rewarding.
I’m not here to blow sunshine. I’m here to make sure you don’t learn this stuff the expensive way. Many founders won’t pay themselves the first year and won’t quit the 9–5 for a while. That’s normal. If you’re still reading, you’ve got grit—use it.
Four practical steps to launch smarter
1) Re-read this. Seriously. It will save you from the common landmines.
2) Research like a maniac. Competitors, pricing, margins, keywords, channels, trends, buyers.
3) Start with one great product. Prove demand, dial the unit economics, then add SKUs.
4) Learn obsessively.
Build a site; learn basic design/Photoshop.
Keep your books.
Read studies and interpret data—or work with someone who can.
Pack boxes efficiently (you’ll do plenty).
Ads, email, social, content, forecasting, budgeting.
FDA/FTC guardrails.
Network—ask veterans for help.
The more you learn, the less you burn—and the longer you’ll last.
Next steps
New / pre-launch brands
Book a Signature 1-on-1 Consultation. We’ll pressure-test your idea, map the regulatory + QA + economic path, and help you craft a launch plan around one great product (specs, claims, label, manufacturer short-list, testing).DIY fundamentals
Enroll in SSET (Supplement Startup Essentials Training). It’s not plug-and-play templates—it’s the founder’s playbook to understand which regs apply, complete a market/claims brief, and learn how to find and vet a co-man before you spend a dollar on inventory.Established brands
Contact us for a Compliance & Retail Readiness Audit. We’ll review specs, COAs, labels, testing plans, and unit economics; then deliver a prioritized plan to de-risk operations and improve sell-through (including Amazon/retail requirements).
About Blue Ocean Regulatory
Blue Ocean Regulatory is our quality and regulatory consultancy focused on helping supplement and functional food brands launch, scale, and stay compliant. We partner with founders and established teams to:
Build (or fix) finished-product specifications and testing plans
Vet manufacturers (questionnaires, document reviews, site audits)
Review and optimize labels, claims, and websites for FDA/FTC/Amazon
Design pragmatic QA programs (supplier qualification, COA workflows, retention/traceability)
Plan and run stability studies and shelf-life dating
Prepare recall plans and conduct table-top exercises
Support due diligence for retail expansion and investment
Our philosophy is simple: do it right, early, so you can move faster with fewer surprises. If you want an experienced partner in your corner—without the agency bloat—reach out and let’s map your path forward.