Q & A - Home Brands

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The Question

  • 'Hey guys, can you please tell me more about supplement home brands and what exactly they are? You've mentioned them previously & I'm curious to find out some more info' 

What are supplement home brands?

  • Supplement home brands are specific brands and products that will give the supplement retailer who's selling them more money / return over other products in the store.
  • Because they give the business more return over others, these brands will become a major focus & priority to sell / push on to customers.

The deal

  • Owners of retail stores (let's call her Susie) will actively make deals with the owners of certain supplement brands & products (let's name him Alan). The deal will normally give Susie a cheaper wholesale price to purchase these brands and products which will result in a higher gross profit when she sells them. The deal will also entail exclusivity where these brands and products will only be sold within Susie's stores and no one else's.
  • In return, Susie will prioritize Alan's supplement brands & products over every other brand and product Susie sells. For example, when a customer enters the store and asks for advice on what protein powder to get, Susie & her sales staff will immediately choose & push the protein powder belonging to Alan.
  • To further ensure these brands and products are prioritized over others, Susie will implement KPI targets on her staff to ensure Alan's products are sold. A very common KPI home brand target would be something like '45% of each person's sales must be Alan's brand'. If staff do not meet this KPI, they are obviously selling other brands and products to customers and thus would be spoken to from Susie to ensure their sales contain more of Alan's products.

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The problem

  • From a business stand point, having home brands does make sense to maximize profit. The problem is that it comes at the expense of the customer where money & revenue become the retailer's priority and basic customer service / needs becomes an after thought.
  • It's quite evident that everyone has different needs, wants and goals when it comes to health & fitness. The exact same principle can be applied to supplementation. Pushing just Alan's protein powder, pre-workout or fat burner on to each customer suggests the staff selling them believe they will benefit literally everyone no matter what their goals or history may be. 
  • The customer's needs and wants are not taken into consideration with staff not being truly honest and not selecting options that would be more tailored toward their goals. 
  • Example, let's say Julie walked into the store looking for a fat burner. Julie has never been on a fat-burner before however heard great things from her friends about something called Oxyshred. Oxyshred is in Julie's mind to purchase. The goal of staff is to now cross-sell Julie off Oxyshred and onto Alan's home brand fat burner. They will mention all the features and benefits of Alan's product whilst mentioning all the bad things about Oxyshred. By selling Julie Alan's fat burner, staff will ensure their 45% KPI sales target is on track whilst giving the business some extra money and profit. 
  • The truth is, Oxyshred in this example, would be a perfect fit for Julie. It's one of if not the best / most popular fat burner on the planet, we know it works, we know it contains a good dosage of caffeine for beginners, we know its a great fat burner to start off with, we know it tastes delicious and we know her friends take it and love it. Yet here staff are, getting her off this product onto their home brand product simply because of their needs to meet their targets and maximize as much profit from Julie as possible. 
  • Julie will then most likely take Alan's product home (which is probably cheap and nasty), take a serve and hate the effects. She will show it to her friends who will say "never heard or seen that before". Julie's goals of weight loss and using a fat burner to assist are now back to square one and she's down $80. Alan's product will most likely sit in Julie's cupboard for months never to see the light of day again!
  • The unfortunate thing is, the above scenario is literally what happens in supplement stores each and every day around the country!

Quality

  • Home brand supplements are mainly cheap and low quality compared to other products on the market. If they were high quality, the owners of these brands wouldn't need to make such deals with owners of retail stores to ensure their products are sold. If it was of a high standard, the product will sell itself.

How to spot home brands?

  • With so many supplement retailers stocking several brands and products within their stores, it can be hard to determine exactly what that store's or company's home brands are.  Here are a few easy tips;
    - Ask the sales staff for advice on certain categories (protein powders, pre-workouts etc), the home brand will 10/10  be whatever they recommend first
    - If you see a certain brand exclusive and only sold in one retailer's company and not anyone else's - home brand!
    - Home brand products will literally make up 3/4 of the store's layout. They will be placed in 'retail hot spots' such as on eye level shelving and in the middle of the store.

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A handy trick

  • It's quite common for retailers to have multiple home brands and products within their stores, not just one. We already know Susie has made that deal with Alan, however she's also made the same deal with Michael's brand and products as well as Sarah's. Susie now has 3 x home brands and products that will give her more profit over the other brands in her stores.
  • By having multiple home brands, Susie has now increased her chances of customers buying these products and thus maximizing her profit.
  • Sales staff also have the trick of giving customers a false illusion of having all the power in the decision making process. Let's use Julie coming in looking for Oxyshred as an example.
  • Instead of just suggesting Alan's home brand fat burner for Julie, sales staff will also present Michael's home brand fat burner too. Julie now has a choice of 2 compared to one. Julie thinks she's in control in selecting whatever one she chooses. In reality, staff don't care which one she chooses as they are both home brand products with both items giving staff good KPI's and the company more money. 
  • It's a common sales trick companies and staff will use. 

The discount

  • Another sales technique staff will implement for you to purchase their home brands is offering a 'generous discount' to really push you over the line.
  • If Julie was really undecided on buying Alan or Michael's fat burner, staff will then pull out the handy 'I can knock 10% off for you too'. Depending on the deal they have in place with the owner of that brand, it could even be 15% or 20% off!
  • By offering a discount on the items, and price point being a major influence into whether a customer purchases something or not, this last resort could ultimately be the deciding factor to getting Julie over the line.
  • Remember, these retailers are getting these home brand products at a significantly cheaper wholesale rate so can comfortably afford to offer such discounts and still maximize profits. 

Solution

  • At the end of the day, whatever you decide to invest your money into or whomever you decide to put your faith into is ultimately your call. Sure Supps42 get's better profit by selling certain products over others, but we aren't pushing them. We aren't enforcing KPI targets on staff to sell them.
  • When asked for help, we simply ask further questions to narrow products down to a solution we think would greatly help the customer and their specific needs and wants, no matter what type of return we get. 
  • This principle is how we believe business should be done within this industry and something severely lost. 
  • Hopefully that answers your question about home brands and what exactly they are. 

If you have a question you'd like answered, please email info@supps42.com and we will do our best to answer as openly possible

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