No More Powder For New Supplements?

It's not that we are not doing powders anymore. It's that we are just being selective on what we release, and when. My team is pretty overwhelmed with the pace of new product releases at the moment. This is why we have had a pause this month on new releases. We came out with 54 new products last year. If you know how much work we put into each one, that's is a very difficult task. My team came to me and said they were drowning under all the work. Something needed to change. We either needed to stop releasing so many products, be okay with going out of stock on existing products that were not fast sellers, or reduce the SKUs we offered. We have a massive catalog now, with tons of SKUs. Some of those SKUs sell fast. Others do not. Some things are slow sellers for years, then randomly fly off the shelf without notice. Others sell really well for a while, then die off. Some just sell okay consistently forever. It's hard to predict. It's very difficult to manage the supply chain and production planning in those scenarios. With all the new product releases we have been doing, we had to make a choice: cut down the number of new products we were going to release, or cut down on the number of SKUs we make for the new products. Because releasing cool new stuff all the time is a big part of who we are, I chose the latter. This means that we are focusing on the SKUs that will sell well first.

Like it or not, powders don't sell well. It might seem different when you talk to people here on Reddit, but Reddit is not the real world. Most powders just don't sell. We have some powders that, I shit you not, sell less than 10 units a month. That's hard to justify keeping in our catalog. Furthermore, we did some analysis of costs that go into each unit, and our labor costs for powders are DOUBLE capsule/tablets/softgels. I was surprised as well, but we went deep into the whole process to really understand where we were putting our labor time into. This is because most of them are manual jobs, since the run sizes are so small because of the slow sales. We can't justify making a 1,000 jar run of powders, as they will just sit on the shelf for years. We really need to do 1,000 jars at a time to justify the setup and cleanup of our automated fill line, so it was all being done manually. Our production department was spending so much time filling powders that they actually couldn't get to the capsule runs they needed to keep us in stock on some of our fast movers. It makes no sense for us to push off capsule jobs of fast selling products because my production team is inundated with powder jobs that will just sit on the shelf. They asked me if we could prioritize capsules, tablets, and softgels for the time being, till we can modify our processes for powders. We are considering split shifts to increase our capacity, but that is still in the early stages. We might need to do overnight shifts at some point in the future to keep up with demand. Staffing is still difficult, though. The pandemic, and all the ripples in the economy caused by it, are still posing many challenges to efficient operations.

That doesn't mean we are not doing powders at all anymore, though. As others have said, we recently released tetrahydromagnolol in powder. However, we are being selective as to which ones we consider releasing in powder form. We may also only do a single powder size. It's the number of SKUs that is the problem. If you bring out a new product in powder and capsules, and you have 3 sizes of each to choose from, that's 6 SKUs for every new product. If you bring out 54 new products, that's 324 SKUs you have to plan for, build, then slot into your limited production capacity. That's also 324 SKUs you have to have shelf space for in the warehouse. To top it off, each product sold on Amazon had separate item numbers for the main site and Amazon... You can see why my team was getting hammered. Throw in shit you can't plan for in the equation, like demand suddenly changing, and keeping everything moving forward efficiently is impossible. We are making improvements to a lot of that, though. Our main site and Amazon listings will no longer have separate SKUs, so we can share inventory dynamically as demand changes, and we can do larger runs of stuff and just split the inventory for internal and Amazon. That's going to be a big help, as managing separate items for our main site, Amazon seller fulfilled, and FBA was a huge part of that inefficiency. Fast changing demand between the main site and Amazon is a big challenge, so now we can just dynamically reallocate inventory on the fly, rather than have production slot a last minute Amazon run in so we stay in stock. As we see the efficiency benefits of those changes in the coming months, we will get a better idea of how things look going forward. Perhaps these changes will really help alleviate our bottlenecks, and we can get back to a more normal release strategy.

So again, we are not eliminating powders altogether. I appreciate the flexibility of having powders you can measure out yourselves and mix into things. I do it myself, so I understand the desire to continue that. I just need to make sure our operation can handle the load of the new product releases that we have planned. Our existing powder offerings are sticking around. We might consolidate some slow selling powders into a single size, but that will be limited. We will also release new products in powder form where we think it is appropriate. That may be a single size to start, and we might skip some products we think won't sell well in powder form till we have the capacity to justify it. I am hoping the changes we are making to our processes will drastically improve our efficiency, which will give us a bit of breathing room on capacity. Then we won't have to be as selective with our release offerings.