When you sell supplements but profitability is under pressure

And solid revenue generates meager profit

Do you recognize this situation?

• Supplements and sports nutrition retail: physical stores + ecommerce
  
• Good revenue, but minimal profit (very tight net margin)
  
• Some employees and collaborators, many weekly hours
  
• Trend: stability (not growth nor decline)
  
• Significant debts to service
  
• Concerns: economic instability of sales, poor liquidity for development
  
• Goal: economic stability, own food diet brand, new sales point
  

And the fear is: every unexpected event zeros residual margin

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The trap of low-margin retail

The stores exist.

Physical sales points.
An ecommerce that integrates.
Products: supplements, sports nutrition, wellness.

Defined ideal client:
Wellness-conscious, good sector knowledge, medium spending capacity.

But the numbers are brutal:

Solid revenue, meager profit.

Very tight net margin.

Means that for every hundred euros sold, few remain for you.
The rest goes away in: goods costs, rents, personnel, utilities, suppliers.

And with significant debts to service
and poor liquidity to invest...

You're running to stand still.

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What happens when margins are compressed

On the economic front:
Solid revenue but minimal profit = no breathing room.
Every unexpected event (broken equipment, large client who doesn't pay) impacts little margin.
Significant debts to service: monthly installments eroding liquidity.

Stability = you're stuck: not growing, but not declining (yet).

On the operational front:
Stores + ecommerce = multiple channels to manage.
Many weekly hours between operations, purchases, personnel management.
Poor liquidity for development = can't make investments.

Consolidation necessary but cash tense.

On the strategic front:
Goal: own food diet brand (higher margins).
But capital needed to develop it.
Goal: new sales point.
But with minimal annual profit, how to finance?

Want to grow but in liquidity trap.

On the competitive front:
Supplements retail: Amazon, pharmacies, large chains.
You compete on service/consulting but can't sustain low prices.
Profitability under pressure.

Metrics monitored but don't improve enough.

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Why it happens

You have a structurally low-margin business model.

Supplements retail:

• Standardized products (known brands)
• Easily comparable online
• Strong competitive pressure on price
• Already low wholesale margins
• After fixed costs (rents, personnel), little remains

And you increased fixed costs (multiple stores)
without proportionally increasing margins.

More revenue ≠ more profit
if percentage margins remain low.

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The (wrong) path many try

Apparent solution: "We open another store to make more volume"

But if margins are very tight:
More revenue with low margins = proportionally low profit.
New store = significant additional fixed costs = zeroed profit.

More volume at low margins = more problems, not more profit.

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The method

No longer sell volume at low margins. Build high margins. Brutal margin analysis: what kills margin?

SKU by SKU analysis: which products too-low margin?
Eliminate under-marginal products even if they make volume.
Focus on high-margin categories (premium supplements, nutritional consulting).

Target: significantly higher average gross margin. Own brand absolute priority.

Own brand diet food = much higher margins.
Even small range changes overall economics.
Private label on bestsellers: proteins, bars, snacks.

Contained initial investment but fast ROI. Nutritional consulting as upsell.

Not just product sale.
But personalized nutritional plan + monthly follow-up (subscription).
Monthly recurring revenue = very high margin.

Loyal client, lifetime value increases. Fixed costs rationalization.

Multiple stores: assess if both separately profitable.
One losing? Close or transform into dark store (ecommerce only).
Personnel: optimize shifts, reduce dead hours.

Rents: renegotiate or assess different locations. Ecommerce as scalable lever.

Physical stores = high fixed costs, low margins.
Ecommerce = scalable with better margins (no rent, less personnel).
Invest digital marketing instead of new physical store.

Target: higher quota of revenue from online.

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What changes after

You no longer sell only others' supplements.

You have own brand with much higher margins.
Offer recurring consulting (predictable revenue).
Ecommerce that scales without proportional costs.

Result:
Similar revenue, profit multiplied several times.
Significantly higher net margin.

Same effort, multiplied profit.
And finally you have liquidity to invest and grow.

This is the turning point: when you stop selling commodity products and start building proprietary margins.