Suppliers can widen their reach, and brands can find what they need, with online ingredient marketplaces.
From groceries to home goods, signs to stock, consumers and business owners alike took to the internet for many of their purchases during the COVID-19 pandemic. According to data from Euromonitor International1, not only are people buying more products online than ever, but they’re also turning to e-commerce for a broader range of products and services: 60% of shoppers explored four to five categories online in March 2020 (up from just 42% in January/February), and nearly half of shoppers purchased products and services across more than three categories, representing a more than 12% increase from earlier that year. According to Euromonitor, companies are making significant operational and strategic shifts to meet these rising demands for digital shopping. And the nutraceutical ingredient market is no exception. Indeed, selling and buying ingredients online is increasingly popular for suppliers and brands, and its appeal is equipped to outlast the COVID-19 pandemic.
If you ask Cris Cortez, director of e-commerce at IngredientsOnline.com, sellers experience a wide range of benefits when selling their ingredients online. First, they gain access to the global market and can build relationships with manufacturers anywhere in the world. “During the pandemic, many companies learned that access to in-person trade shows and conventions are not guaranteed,” he says. “By selling online, factories can transition their in-person connections to a virtual platform and leverage the vast networking potential of the online world to reach an even wider audience.” Selling ingredients online can also provide suppliers with a unique channel for communication, which is much-needed as supply chain and transportation issues become the norm.
For brands, the main benefit of shopping for ingredients online is convenience. “With a simple search and the click of a button, supply chain teams can source high-quality ingredients for their finished products,” Cortez says. Plus, online purchasing can often cut down on the back-and-forth emails and phone calls that hold up sales by giving customers access to all the information they need from one source right away.
As supply chain issues become a bigger concern for brands, online marketplaces can help them decide where they should source their ingredients, according to Cortez. Having access to an online platform with real-time ingredient inventory not only shows what’s in stock and when, but it also gives customers the opportunity to be proactive and create a backup plan if their preferred supplier cannot fulfill an order.
That said, selling and purchasing nutraceutical ingredients online doesn’t come without its share of challenges. One major issue that brands and factories might face is a hesitancy from customers to purchase bulk ingredients without knowing the quality of the raw materials beforehand. To solve this issue, Cortez recommends sending sample sizes of ingredients for manufacturers to test in-house. Or, suppliers can upload their quality control documents to be as transparent as possible. “We have found that quality control needs are easy to combat with access to quality assurance/quality control documents and, in some cases, third-party testing,” Cortez says. “We have been able to be a solution when quality control needs are high and offer our customers factory transparency so they never have to worry when sourcing international ingredients through us.”
In fact, all IngredientsOnline.com sellers undergo a strict qualification process that includes the submission of cGMP self-audit questionnaires and a standard operating procedure documentation review. “Our quality control team ensures that each factory that sells with us follows regulatory guidelines and can guarantee the quality and integrity of their ingredients,” Cortez explains. “Our customers can find fully downloadable quality control/quality assurance documents on each ingredient listing, including ingredient documentation, ingredient certification, and factory documentation.”
Brands wary of online ingredient marketplaces should know that this sourcing method isn’t going anywhere and will, in fact, only become more popular going forward as many supply chain teams move to exclusive e-commerce sourcing, he says. “We set out to prove business-to-business ingredient sourcing and purchasing could move online, and we feel we have done just that,” Cortez says. “That focus now shifts to proving how much better doing business online can be for the markets we serve. We challenge any supply chain team looking for raw ingredients for their products to make the change to our online marketplace and see firsthand the benefits that come with it.”