Biotest's Business Model

Off Topic
21

I blindly guesstimate $15-20M. I also would imagine that margins are pretty high, although, it seems that R&D may eat up a good portion of that.

I think Biotest’s mission is strong, it has identified a niche and pursues it wholeheartedly. I’d say the #1 pro of the business model is the customer focus Biotest shows via the T-Nation site. It is truly unparalleled in a business environment that seems to get further and further away from customer service…let alone attempting to educate its faithful in order to make their own decisions. #2 pro would be product quality.

In spite of all the flack Phillips takes on here, I could only dream of building a business/brand like EAS and BFL. However, Biotest is focusing on a different niche and is successful to the exent it can be. Obviously, it’s model will suffer to some degree from not getting broad exposure in the retail sector, thereby limiting growth potential. I suppose that’s where you make the choice to keep it “cool” and “underground”, or you cash in and go “corporate”. Personally, I’d take the check - and most do, eventually.

22

It’s pretty intersting speculating the gross sales of Biotest. I’m guessing it’s pretty high. I don’t know when TC stated it costs 1 million/yr for this website, but I figure it’s gotta be more than that now. Look at all the contributers, moderaters, number of articles coming in, and the prime time - that’s free direct one-on-one with the worlds top coaches!

All I know is 5-15 million gross is a fairly small company. I figure anyone in the supplement industry (with heavy R&D) and a growth rate like Biotest must be higher.

In any case, I hope TP, TC, CS, and Cy make at least a cool million each. :slight_smile: They deserve it.

As far as the business model - they’ve definetely got that down. Their growth rate is tremendous, especially considering every one of their products works - how often do other supplement companies put out supplements that aren’t just hype or bandwagon?

I think one crucial aspect of Biotest, is they stand by their products and work to keep customers. There’s no way to have an open forum discussion if products don’t stand up to scrutiny.

Anyway, keep it up Biotest. You guys rule!

-J

23

[quote]seanc wrote:
usdsig wrote:
Some of the posters are talking about two different things, net profit vs. gross income… I would not even guesstimate the margin on products Biotest makes, but gross income could at least be disussed…

Hell, I spend $150 a month on Grow!, Surge, and the “supplement of the week”…

For simplicity purposes, and myself as an example, we will call it $2,000 per year.

Let’s say that there are 1,000 loyals… That is only $2,000,000… Let’s say there are another $1,500,000 in “non diehard customer sales per year”… That is only $3,500,000… We have seen Biotest branch out to Costco, GNC, etc…

I guesstimate they are a $10-$15M per year company…

I’m betting the customer base is much larger than that.

t-nation.com is in the top 50,000 or so websites worldwide, which is really incredibly good considering how many millions of unique websites there are, being in the top 10% of all websites in terms of traffic.
[/quote]

btw, having that high a ranking is even more shocking considering T-mag does not show up on the first 20 hits on google for terms like

bodybuilding
strength and conditioning
strength training
muscle
building muscle
get stronger
protien powder
fitness

etc…

Getting in the first 10 hits for even a few of those terms would put T-mag probably in the top 2,000 to 5,000 sites worldwide which would be a very good thing for Biotest. I think nobody at the mothership understands this though…

24

I would think most of the profit comes from HOT-ROX, Spike, and Carbolin 19 type products.

If they raised the price of Grow! too much, no one would buy it(lots of competition). I didn’t buy a damn thing till they dropped their prices, but now buy over $100 a month in protein and Surge.

Its really a shame that MAG-10 got the legislative axe, as I am sure that it was a cash cow for Biotest.

In terms of their business model, I think it makes a lot of sense. Provide superior free training advice to raise people’s demand and loyalty for the product. Then eliminate the middle men to keep costs low to maximize profit in a low margin business.

soco

25

The marketing of this site has got to be one of the best strategies I’ve seen in a while.

Create an attitude for life following. Listen to how we talk, our loyalty comes b/c we all want to be and act like some sort of a T-Man/Vixen. In order to act this way, we all come here to chat about this that and the other thing.

Also with being a T-Man/Vixen come using T supps.

Creating a club and making people feel welcome in it, is simple effective marketing. It’s all in how you spin it.

Hat’s off to the ownership.

Wouldn’t it be funny if none of the TC’s or TPs even existed. Just super heroes made up as role models to further support this marketing strategy? what if Biotest is run by someone who you wouldn’t look up to. YOu’d sure think twice about the credibility.

I’m not saying this is true, just saying it to prove my point. I remember a long time ago when CT first started writing articles etc. He said people would email him saying why should I follow your programs, look at you, your a fat piece of monkey shit. guy knew his shit one way or another and still does.

On comes the old tranformation from flub to Vin diesel. Wham…CT’s the new man. Everyone’s doing his programs. I don’t blame them they were good to begin with and work well (At least for me). Point again, it’s all in how you spin it.

Good work Biotest. Top notch business model for sure!

T

26

I think I remember reading about them holding a few patents on some of the main ingredients in some of the supps, and licensing them to other companies. That will yeild some serious cash.