Supplements and financial sense
By Ed Thomas

Does it make financial sense to carry nutritional supplements in a chiropractic practice? After all — carrying products means taking care of inventory, merchandising the products, training staff how to manage and sell them and possibly paying sales tax. That’s a lot of work. The question is: Does it pay off?

The key to carrying nutritional supplements in a practice is to follow the 4 Ps of marketing: Product, Placement, Pricing and Promotion. When you break down your offerings in this simple manner, you will start to see excellent results and return on investment, which translate into revenue for your practice.

• Product. The first critical factor in carrying products is to select the best. Before you stock any products, research the manufacturer. A manufacturer should test its products regularly for active-ingredient label claims and use GMPs (Good Manufacturing Practices).

Carrying the correct mix of products in your practice is probably the second most important factor. If you stock products you believe will yield positive results, your patients will be open to purchasing them and look to you as the “expert.”

You don’t have to stock a large range of products, but the more selection you keep on hand, the better your chances of making a sale. Stocking products that the patients cannot find in other outlets such as drug or health-food stores is key. Your office must be the destination for these products. If the patient can find them elsewhere, you may lose the sale.

Which dietary products should you stock? Definitely entry-level items, such as multi-vitamins, calcium and joint products.

Once patients become comfortable with these products, you can recommend highly specialized and more profitable products.

Finally, give your patients options. Some patients have a difficult time swallowing pills, so liquids, powders and chewable tablets are great alternatives. These alternative delivery systems will give you a competitive advantage to other outlets that may only offer one type of delivery system.

• Placement. The key is to place your selection in a high traffic area to aid in your patients’ awareness that you carry supplements. If you place a temporary display near your payment/scheduling clerk’s desk, patients will stop and look.

You may also consider placing product displays in adjusting rooms. Patients can read product brochures while waiting for you.

Your office is your opportunity. Be creative and try different locations.

• Pricing. Products do not have to be ticketed with inexpensive prices to sell.

The secret in pricing is to meet the certain emotional thresholds — such as, $9.99, $19.99, $29.99 etc.

Plan your margin to be in the 35 percent to 50 percent range, depending on the type of product you offer. More specialized products command a larger profit.

Don’t be afraid to sell your supplements on their value. For example: A multi-vitamin in a liquid format may be priced at $14.99 for a 33-day supply. At 45 cents per day with better-available active ingedients in an easy-to-take form, patients will not be inclined to run to the drug store to buy a less expensive retail brand that does not deliver the same level of nutrients.

Discussing value on a cost-per-day basis with your patients will help them overcome the objections of a $59.99 retail price. (A 60-day supply equate to $1.00 per day to stay healthy.)

• Promotion. Promoting your products can be a great opportunity for you. When you offer a 10 percent off promotion a few times a year, patients tend to “pantry load.”

Sampling (if available from your supplier) is another way to promote your products. So are informational brochures, which help educate your patients on the value of the products you offer. Most manufacturers offer assis-tance on both of these fronts.

THE BOTTOM LINE

Here is a quick computation to show how nutritional supple-ments can impact your practice:

• Product selling price: $29.99
• Cost: $18.00
• Profit: $11.99 (40 percent)
• If you sell only 12 units a month, you will generate an extra $359.80 in revenue and $143.88 in profit for one product each month.
• If you carry a dozen products, multiply the numbers by 12 and you’ll generate an extra $4,317.60 in revenue and $1,726.56 in profit — per month.
• Annualize those numbers to get a larger picture of the potential from carrying nutritional products: $51,811 in revenues and $20,718 in profit.

If you do not yet offer nutritional supplements, this analysis shows that offering them is a win-win situation for both your practice and your patients. And if you already offer them, consider expanding and/or modifying your selection at least semi-annually.

Ed Thomas is vice president of sales and customer marketing at Remington Health Products, LLC (www.remingtonhealth.com), makers of Drinkables Liquid Supplements. He has spent 15 years in the consumer package goods industry, seven of them with nutritional supplement companies. He can be contacted by e-mail at ethomas@remingtonhealth.com.