Selling drugs for fun and profit

Not exactly drugs, but nutritional supplements. I read a post a while ago on reddit about a guy having major success selling his own brand of nutritional supplements. Go read his post it’s very interesting. Anyway I decided last year that I would do the same thing. The idea struck me because it reminded me of Brainquicken, the initial success of Timothy Ferris.  Tim wrote the book the 4 hour workweek. This book was hugely influential in my decision to quit the regular job world for full time entrepreneurship around 2009. I felt that following the footsteps of Tim made a lot of sense.

Choosing the product

spyfu-leads

spyfu

The first step was doing research to find a fat niche that is under served where I could get in. I used seo spying tool Spyfu to search for sites related to supplements that spend a lot on adwords. Take a look at the image on right to see how to do that. Sites that have been spending $10k/month of adwords for the last  few years are most likely selling enough and making enough to at least cover this advertizing budget. Big spending, probably means big profit.

I went thru every site and analyzed the niche . Most niche are well covered by several players with top notch websites with big production value. I found a few niches that were underserved. One of those niche is iodine supplements for people with a weak thyroid gland. The main advertiser in this niche according to spyfu is http://1-thyroid.com/ . I felt I could take on this market. I would make a site ten time better, do better PPC, etc.

I thought about various short names riffing on Iodine and thyroid. I decided on Iodria. I registered a domain name at godaddy.

Designing a kick ass converting website

screencapture-file-Users-hakimsidahmed-Dropbox-iodria-website-index-htmlNow I needed a really nice website, but I didn’t want to spend much. I could have used something like 99design’s contest feature, but I felt I needed to really control the layout to end up with a convincing and converting website. I found another website selling supplements that I really liked. It was not related to iodine so I decided to rip-off it’s fonts, colors, and layout. I figured I would do this to launch the project. Only if it did succeed would I invest in real original artwork.

If you look at the result it looks pretty sweet. I’m no photoshop guru. I know the basic functions but that’s it. So how did I achieve this result? Stock art + Outsourcing.

The pill bottle mockup is something very hard to create from scratch. That’s where graphicriver comes in. Look up this search for “pill bottle“. For $5 I got this easy to edit pill bottle model with photo realistic shadows.

The next thing I needed was a logo. I needed a logo that represent energy. I decided to look for some kind of flower stock art that I could color in pink shades. I found one on another stock art website for $6.

So now I placed an ad on Odesk for a graphist to recreate the source site into a fully layered PSD file that I could easily edit. I broke down the project in five different block and put four different guys on doing the first block for $20 each. They were all pitiful  or flakes. I had to try another two. One was really good and I finished the project with him. Note that I bought for a few bucks the stock photos and supplied them to the artist. I used Dollar Photo Club.

Once I had my whole PSD file, I hired someone else to slice it into HTML/CSS.

I hosted the site on shopify and used their checkout and credit card processing. Shopify is really nice system for quickly launching ecommerce websites. I like to use it to quickly test ideas.

Getting traffic with Adwords

adwords-iodriaOnce I had the site online with a functional checkout with credit card processing, I started experimenting with getting paid traffic from adwords. As you can see in the screenshot on the right, this traffic is expensive! I was paying over $1 per click on average. This traffic absolutly needed to convert or I was going to lose my shirt trying.

I decided to try to begin with $100 budget to see what happen. I launched the campaign around noon and went out waiting for google to approve my ads. That night I went dining at a local indian food with my girlfriend. I was discussing with her how expensive this testing was going to be. She expressed big reservation on the project. She thought it was risky financially, legally, ethically, etc. I decided to go look at my stat right at that moment on phone. Bam a $99 sales for a pack of three bottles of Iodria! Wow. I went to see how much I spent on adwords: $50. This was so great considering the bottle were planned to cost me $7 each and shipping to be about $4! The only problem was that I did not have any bottles. The product existed only has a mockup. I was super stoked and rushed out to get some bottles made asap.

Finding a Supplier

The world of private label supplements can be very confusing. Some labs will tell you that they have a 5000 bottle order minimum, that they need this and they need that. That’s all bullshit. If you know the right labs, you can get 48 bottles done using one of their 200 recipes with your own custom label on it. All this for under $500. That’s what I did. The other confusing thing about this industry is the delays. All these companies will tell you they can produce your bottle very quickly. That’s a bold faced lie to get your order. None of them will produce anything before at least two weeks, possibly three to four. I had to refund my first order due to these manufacturing delays.

Getting kicked out of Shopify

After I placed my order at my chosen lab, I got an email from shopify. They were kicking me out of their credit card processing system. They have rule against supplements. Fuck. I decided to stick with them for the hosting but then use Paypal with credit card processing. It fucks up their checkout a little bit, but not enough to kill the sales.

Getting the bottles, Getting scared

About three weeks later I was told that my bottle were now in their warehouse ready to fulfill for $4 per order all included. I restarted the adwords campaign I paused while I was waiting for my inventory to become available. I then burned thru $300 of adwords ads without making a single sale. I was getting scared. Fuck! It now dawned on me that I would have to burn a few thousands bucks on testing this idea. Also dealing with labs and seeing all the papers they made me sign to protect themselves made me nervous. I realized that this venture was really risky and absolutely required a solid corporate structure to protect my personal assets from any eventual lawsuits. I had planned on spending a few hundreds, getting some sales, and scaling up from there. Now it was spending a few thousands on ads and a few thousands on bulletproof corporate structure ( Read up on Belize corp!). I got scared and decided to kill the project.  I also felt it was wrong ethically to be spending cash on a foreign corp to protect myself. I like to think that I’m business to provide stuff my customer desire while making everyone involved happy. If you need to shield yourself that much, it’s not for me.

For sale

If you want to buy the domain name, PSD files, websites, the labs contact and inventory, print ready labels, etc, just make me an offer. Email me! I think this idea has legs, but you need to be ready to burn some cash on lawyers and ad testing.

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