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Industry Insights: Nutrition & Supplements – Lexology

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According to Rakuten Intelligence, 77% of vitamin and supplement sales take place on Amazon in the United States. The age of eCommerce comes with many challenges that brands may not be ready to tackle. The reality is that there are many different threats nutrition, supplement and wellness brands face on online marketplaces that can disrupt sales, brand value, reputation, product quality, return on ad spend and more.
Tyler Pensyl, Partner at Vorys eControl®, is deeply experienced in the nutrition and supplements industry and has helped guide brands, driven by data and supported by a multidisciplinary team, to help drive KPIs and deliver transformative ROI.
Q: What pain points are the nutrition and supplement industry experiencing?
[Pensyl] Nutrition and supplement brands commonly face issues with product diversion and sales by unauthorized sellers on online marketplaces due to their products’ small packaging size and higher price points. Further, many brands do not have the appropriate channel controls in place, which makes their products ripe for diversion.
For mass market brands selling through major retail channels and multi-step distribution, unauthorized sellers can cause significant disruption for the brand, impacting sales, brand value, reputation, product quality, and more. Professional channel brands, who sell largely through healthcare practitioners, also suffer from diverters finding ways to acquire product through unapproved channels and then list them on the marketplaces. Unauthorized sellers are often offering poor quality, expired, or tampered with products, and providing poor customer service.
Q: How does Vorys eControl help solve these online sales control challenges for the nutrition and supplement industry?
[Pensyl] Control is key to stopping unauthorized sellers. Vorys eControl helps brands in the nutrition and supplement space gain greater control over their distribution channels and the sales of their products online. Vorys eControl assists brands in implementing appropriate channel controls that reduce the diversion of their products and limit the resale of their products by unauthorized sellers. If unauthorized sellers continue to find a way to divert product, Vorys eControl can assist the brand in uncovering from where the sellers are sourcing products. Further, Vorys eControl can proceed with legal enforcement actions against unauthorized sellers, including those selling poor quality, expired, and tampered with products.
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