Health and wellness are no exception to the wave of technological disruption reshaping industry practises and business models. Traditionally dominated by large conglomerates like Unilever and P&G, which control significant supply chains and distribution channels, this market has presented high barriers to entry for smaller businesses and startups. However, the rise of on-demand production and personalised products is challenging this status quo. At the forefront of this change is Supliful, a platform that enables on-demand skincare, supplements, and functional food production.
Supliful leverages technology to offer scalable, flexible, and cost-effective end-to-end solutions, allowing smaller players to compete in this previously inaccessible multi-billion-dollar market. The company’s CEO recently shared insights into Supliful’s journey, detailing how it democratises access to high-quality, personalised products for businesses and consumers through its approach to product manufacturing and distribution.
The business model is structured around three key stages of client journey that provides a pathway for businesses to scale their product offerings, from initial market entry to creating exclusive, branded products. This model not only reduces the typical R&D and inventory costs but also accelerates the go-to-market for new products.
Can you tell us about how Supliful started?
Prior to Supliful, my co-founders and I bootstrapped an e-commerce business selling posters to $1.5 million in revenue. The whole concept was based on total quantity and demand infrastructure. We had no equipment or machines and relied on five manufacturing partners who printed on-demand and drop-shipped the products directly to the end-customers. This model allowed us to leverage our existing skillsets and knowledge, without requiring us to invest excessive capital or hold any stock.
After successfully exiting the business in 2020, we wanted to launch our own brand in the health and wellness space but faced numerous challenges. The sector has huge barriers to entry – from finding suppliers to managing inventory costs and supply chain, the initial costs can easily stretch into hundreds of thousands. Through our experience, we realised that there was a massive opportunity in enabling on-demand skincare, supplements, and functional food production. We spent the first half of 2021 building an MVP and testing the model, then we raised our pre-seed round ($410,000) and opened our first fulfilment centre in Denver, Colorado.
How does Supliful’s enable its clients to achieve on-demand production?
We have structured our business model around three stages of client journeys:
- White Labelling: At the initial stage, clients can select one of our existing products and customise the labels to reflect their brand. For example, a digital yoga teacher might want to upsell supplements. They would come to Supliful, design the label for a product (e.g., ashwagandha) and upload it to their online store the same day. The product exists as their own, and their customers never know Supliful is running the back-end operations.
- Private Labelling: As businesses grow and generate more substantial revenue, we help them design unique packaging for their products. The formulations remain the same, but the branding becomes more personalised. This typically happens when clients reach $10,000 to $20,000 in revenue per month.
- Unique Formulations: For clients reaching higher revenue milestones, we develop entirely new products with unique formulations, exclusive to their brand. This would occur when they hit $70,000 to $100,000 a month for a specific SKU.
Our vision is to make our advanced capabilities accessible to businesses right from the start. Currently, we support clients who begin with white label products and gradually scale up to designing their own packaging via private labelling. However, in the next 12 to 18 months, we aim to streamline this process even further. We want to be able to offer Stage 3 capabilities for Stage 1 clients, meaning you’ll be able to come to our platform, choose ingredients, packaging, and labels, and create a totally unique product on demand. This new way of private labelling will significantly reduce the time and costs typically associated with product development, allowing you to launch exclusive products right from the beginning.
In terms of minimum order quantities (MOQs), there will still be some initial costs, such as a fee for producing the first 10 units. But overall, we are drastically reducing the barriers to entry. A R&D process that would typically take 18 to 20 weeks can now be completed in just a few days. We’re leveraging existing equipment and focusing on integrating the necessary software and user interface to provide guardrails. These guardrails ensure that the products you design are not only safe and effective but also adhere to FDA guidelines. By maintaining these standards, we can offer a cost-effective and scalable solution that helps you bring high-quality, unique products to market quickly and profitably.
Which parts of the value chain are covered by Supliful vs clients vs partners?
In our value chain:
- Clients: They design their product labels and set prices. They market these products as their own, with no visible link to Supliful.
- Supliful: We manage backend operations, including preparing and shipping orders on behalf of the client.
- Manufacturing Partners: They produce and distribute the products (also directly to consumers), leveraging our software platform.
This model ensures clients can quickly and efficiently launch new products, significantly reducing the typical R&D and inventory costs associated with new product development.
What has been your growth trajectory so far?
We launched our platform in October 2021 and have since helped businesses generate $20 million in revenue, with Supliful itself achieving $10 million within the first 32 months. We’ve expanded our team to 45 members, raising $1.9 million in equity funding and $1 million in debt funding. Our success is due to our strategic market positioning. We aim to disrupt large conglomerates like Unilever and P&G by providing SMEs with the tools and technology typically reserved for industry giants.
We’re seeing a significant shift in consumer preferences that’s disrupting the health and wellness industry as well. Traditionally, large conglomerates have dominated the retail space, controlling everything from product development to distribution. However, the rise of ecommerce is giving smaller companies the chance to compete by facilitating direct-to-consumer channels. This trend allows SMEs to access technology and expertise that were once exclusive to big corporations. Consumers today are demanding more personalised products that cater to their specific needs. We’ve noticed a surge in micro-branding and niche targeting, especially in the US. People are tired of the impersonal nature of large chain stores like Target and Walmart. They’re willing to pay a premium for products that offer a personal touch, with branding and messaging that resonate with their unique lifestyles and preferences.
What are your plans for the future?
Currently, our approach to distribution channels is all about maximising accessibility and efficiency for our clients. Right now, 99% of our revenue comes through Shopify, which serves as the primary platform for our customers’ online stores. Shopify’s versatility allows us to distribute through other major channels like TikTok and Amazon. Moving forward, we’re planning to build integrations with Walmart and enhance our presence on Amazon even further. We’ve already developed an app for the TikTok marketplace. Our goal is to keep expanding direct integrations with existing marketplaces, ensuring that our clients have broad and effective reach for their products. This strategic focus on distribution channels helps our clients optimise their market presence and sales potential across multiple platforms.
Geographically, we’re focused on solidifying our presence in the US and exploring opportunities in the UK, Australia, and India. The fragmented nature of these markets due to varying regulations is a challenge, but are confident in our ability to replicate our successful model of partnering with local, high-quality manufacturing partners.
You tend to share Supliful’s financials on social media – can you tell us more about your approach to being publicly transparent about the company’s performance?
Transparency is part of my character. I believe in honesty and accountability towards our partners and clients, which has brought significant value. We keep an open diary and hold many calls with founders who have a track record in this sector. This community feeling and high service standards are appreciated by our clients and investors. It takes courage to be honest, especially when the journey is tough. But I enjoy being honest and transparent, and it creates massive accountability towards our partners.
Conclusion
The business model and journey of Supliful remind us of the path taken by Candle Shack and what it sought to achieve. Both companies are pioneers in their respective industries—health and wellness for Supliful, and home air care for Candle Shack—by empowering niche businesses to succeed in markets traditionally dominated by large conglomerates.
Candle Shack, bolstered by private equity investment that Fairgrove supported, has rapidly grown by providing the tools and infrastructure necessary for small brands to create and scale their own candle lines. Offering everything from raw materials to packaging and fulfilment services, Candle Shack has made it possible for entrepreneurs to turn their unique visions into successful businesses without the burdens of high upfront costs or complex logistics.
Similarly, Supliful leverages innovative technology to offer end-to-end solutions for small businesses, enabling them to produce and distribute personalised health and wellness products. By lowering the barriers to entry and reducing the time and cost associated with product development, Supliful allows its clients to compete in a highly competitive market with agility and flexibility.
These companies not only illustrate the trend of technology-driven disruption in their respective industries but also present compelling investment opportunities for private equity. As they continue to democratise access to high-quality manufacturing and distribution, they position themselves as attractive targets for investors looking to capitalise on the growth of niche, consumer-focused brands. The ability of platforms like Supliful and Candle Shack to enable the next generation of businesses highlights their potential to drive significant returns and industry transformation.
If you are interested in learning more about Fairgrove’s experience in e-commerce and / or the wellness and cosmetics sectors, please get in touch with Viesturs Bemhens.
