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How I Made a Fortune from Diet Pills

June 17, 2013

How I Made a Fortune from Diet Pills

Following a hugely successful year as Managing Director of FORZA Supplements, Kent-based entrepreneur Lee Smith has been talking exclusively to MoneyWeek, Britain’s best-selling financial magazine.

Lee Smith, 35, forged his sales skills in the murky world of network marketing. Between the ages of 23 and 30 he worked on building up networks of sales contacts for various firms. “It taught me a lot. I became a better sales person because, while the product would regularly change, the end goal was always the same.”

But after seven years, he’d had enough. “Network marketing blurs the line between business and pleasure. I’d end up going to the pub and trying to sell to friends and family – it wasn’t good.” Fortunately, by 2007 Smith had spotted a new market: health and fitness supplements. “Everywhere you looked gym supplements and weight loss pills were becoming more popular – it was clear that it was a growth industry.” Together with his brother and a friend, Smith decided to set up a firm to sell diet pills that combined appetite suppressants with energy boosters to help people lose weight by giving them extra energy to work out in the gym. “We did everything on a budget. We built a cheap website and bought our products online.”

Soon Smith noticed something that would prove crucial. “Lots of the pills were being sold directly by wholesalers in plain white packages, without labels, and looked almost illegal.” The trio decided to buy these supplies, rebrand them with the name FORZA and sell them to third-party suppliers. As sales picked up they started creating new products. For example, when acai berries became popular they got a manufacturer to make a version of their supplements that contained acai. They also started making versions of the pills targeted solely at women.

“These products were basically the same but coloured pink and with less caffeine.” By 2011 the firm was turning over around £70,000 a month and had built up a database of thousands of regular customers. Smith wanted to start selling the company’s wares through other shops, but his partners wanted to protect margin and sell solely through the website. “It was a disagreement about volume and margin and eventually we got to the point where something had to give.” In the end, Smith kept the FORZA brand, while the other two kept the website and customer database. Smith then set about building up his new company.

“I decided to get out and about in the industry, speak to retailers and find out what types of products they wanted.” It turned out that none of them wanted what Smith had. “The supplement world was changing. People wanted more natural-looking products.” So Smith commissioned a new pill that used raspberry ketone extract to aid weight loss.

Realising the importance of packaging, he hired an experienced designer, Nigel Davison, to ensure that the product looked better than anything else on the shelves. Retailers were only too happy to stock it; Costco and Ocado took it on, while he also used online platforms such as Amazon and Groupon. “We were the biggest selling supplement on Amazon for six months.”

The strong sales financed a new range of fruit-based supplements. FORZA now has 45 products covering all aspects of diet, wellbeing and sports nutrition. With annual sales at £3.5 million, Smith is currently investing in a new technology centre that will allow FORZA to package its own pills. “Presentation is key in this industry – the technology centre will give us a lot more control over our products.”

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