Pricing Pressure: Evaluating Profit Margin in Supplement Sales
Supplements can play a crucial role in patient care; they can serve as the foundation of your protocols or provide targeted support to whoever walks in your door. You may already have an existing inventory or you're like most and find it intimidating and challenging to maintain. On the contrary, it should provide support in your protocols for your patients while serving as a stream of additional income for you and your patients and play an essential role in protocols and recommendations.
Let's explore some of the common questions we receive from practitioners:
Question: What is better, 40% or 50% margin?
Answer: The profit margin you set is unique to you and your practice. The sweet spot we have found for many practitioners is a 50% profit margin while offering routine discounts or sales that patients can take advantage of.
Question: My Patients will find cheaper alternatives if I charge too much.
Answer: This can be a legitimate worry for practitioners; however, when you're offering unique supplements for specific reasons, it can be hard to find a formula with the same efficacy and quality at a lower cost. Understanding your clientele can come in handy here; educating them on the importance of the source and quality of the supplement you are selling is essential; nobody wants chemicals or fillers included in their formulas. Taking advantage of sell sheets, promotional materials, and handouts can be great to familiarize yourself (and your patients) with the ingredients and sourcing.
For those looking for lower cost (without the lower quality) supplements, offering quarterly sales or specials and coupons can be the way to go. This can bring the price down for said customers without affecting your profit margin as a whole.
Question: I do not want the overhead; what are the alternatives?
Answer: Having an in-office inventory can be great as you can hand patients their supplements, review directions and dosage, ultimately improving patient adherence. However, it comes with a significant overhead: purchasing wholesale, shipping delays, and potentially having overflow/expired products.
Take the stress out of supplement sales by setting up a practitioner account that allows you to create your affiliate link for direct patient ordering. We commonly see healthcare practitioners do a hybrid of both, offering a few of their favorite niche products (specific or specialized formulas rather than single ingredient) in-office while offering the rest through affiliate links and dispensaries.