SHADY SUBSTITUTES
LOSS LEADER STRATEGY
“ The total production cost for whey protein is about double that of a standard product. This means that profit is halved, and that protein spiking is a convenient, albeit totally dishonest way of making some of that margin back.”
SHADY SUBSTITUTES
Companies that choose to engage in this practice don ' t spike their protein with either BCAAs or Leucine but with the cheapest amino acids they can find, which cost about ¼ as much as whey. They also count them as " protein " when they declare the nutritional facts on the side of the tub, which is legal in the United States, because the FDA – our Food and Drug Administration – counts the total amount of nitrogen, plugged into a formula, to be the determinant of how much protein the product contains.
I ' m not sure if the same kinds of laws apply in South Africa, but if you ' re getting your product from a company based in the United States, it may be worth your while to do some research. When I last checked, about 30 lawsuits had been filed against companies of all sizes, from ones you ' ve probably never heard of, to ones you probably see sponsoring some of the biggest names in sports. So, because of a loophole in labelling laws, companies can put these cheap amino acids in their product and call it whey( sort of). Fortunately, because of our consumer protection laws, these dirtbags have found themselves defending enormous class action lawsuits( Google is your friend here, if you ' re looking for the companies that have gotten caught so far). If a company will rip you off behind the scenes by exploiting a labelling loophole, they ' re not the kind of company you want to support – even if they clean up their act and get their labels right in the future.
Although I think the companies doing this are total dirtbags, I can almost understand where they ' re coming from. Whey protein keeps getting more expensive and, as a result, it ' s becoming nearly impossible for the medium to large companies to make a profit from selling it. This is because in the U. S. the going rate that distributors are paying for a tub of protein is about 40 % less than wholesale. And wholesale is roughly 40 % off retail. So if you ' re doing the quick math, an American supplement that has a manufacturer ' s suggested retail price of $ 40, is easily hitting the distributor for less than $ 25.
Obviously margins will be different for everyone, but that ' s a good look at a typical margin for retailers and wholesalers. In this case, our hypothetical product is probably being manufactured for under $ 10, which includes everything from the label and the bottle, to the actual ingredients, plus the fees for the product to be put into the bottle and the labels applied; unless that product is whey protein. The total production cost for whey protein is about double that of a standard product. This means that profit is halved, and that protein spiking is a convenient, albeit totally dishonest way of making some of that margin back.
Whey protein also can ' t be synthesised cheaply – it has to come from milk, which must come from an animal. This puts serious constraints on the amount of whey protein that exists at any given time in the world. In short, it is a commodity that exists in limited supply, but does not generate a profit margin commensurate with its relatively low supply and high demand. And as you may have noticed from your supplement cupboard, protein powder takes up a lot of space. Manufacturers will need to have it delivered on a couple of 18-wheelers, if not a fleet of them( for the big companies). So your delivery costs more, as does shipping because it not only takes up more space but it also weighs more than anything else a supplement company would sell. Plus, if you are paying to store it, or a fulfillment company handles it, again, you ' re going to be charged more.
“ IT’ S LIKE BUYING A HOUSE, BUT INSTEAD, THE SELLER JUST
GIVES YOU A PILE OF BRICKS”
LOSS LEADER STRATEGY
Sometimes companies will use their protein powder as a loss leader – a product that breaks even or is even sold at a loss, with the hopes of selling additional items to the same customer. So, if I sell you a loss leader and lose money, I ' m hoping you stick around to buy something else that I sell, where I ' ll make up that amount, plus more. Hopefully this instills a degree of brand loyalty, and gives the company a chance to recover the money from their loss leader.
Common wisdom in the supplement industry is that a whey protein is the last item a company should make, and then only to round out an already successful line of other products. Typically it ' s done when a company has developed a following and some brand loyalty, and by not having their own protein powder, they ' re leaving money on the table when their customers are forced to purchase another brand for that staple.
When the cost of goods sold is high and made even higher by things like shipping and storage, and there exists an exploitable loophole where( dishonest) companies can look to make their money back, you ' re going to see spiked protein. Companies who have been caught doing this are easily found online, so that ' s exactly where I suggest you go to educate yourself so that you don ' t get ripped off. M. E
“ When the cost of goods sold is high and made even higher by things like shipping and storage, you’ re going to see spiked protein.”
www. muscleevolution. co. za
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