Volume 7, Issue 2

Welcome to the latest issue of Nutraceutical News from IFS. In this issue, we are delighted to profile an outstanding IFS client that provides doctors with a line of high quality nutritional supplements that they can market directly to patients in their office. In the Marketing Column, we explain how identifying customer buying habits can help drive successful product marketing initiatives. In the Customer Service Corner, you'll learn that there are more things to consider than the cost of a stamp when selecting your delivery options. And finally, our Industry Update takes a look at what food and beverage companies are doing to help fight the battle against obesity in America.

For more information about the content found here or about any of our products and services, you can always visit our Web site, www.ifssolutions.com. To share your feedback about this newsletter, please click here. To unsubscribe, please use the link at the end of this issue.

• Client Profile: Rythmia® Practice Solutions, LLC
• Marketing Tip: Data Mining… Uncovering Hidden Gems!
• Customer Service Corner: Finding the Right Balance on Shipping Costs is Essential
• Industry Update: The Trend Toward Healthier Products Intends to Impact the Growing Obesity Epidemic
• About IFS: For More Information, Contact Us

Given the struggling economy and the state of flux in which we find the U.S. healthcare system today, many doctors in private practice are looking for ways to improve the bottom line without increasing their daily workload.

Enter Rythmia® Practice Solutions. Having opened its doors in January 2010, Rythmia® offers a line of unique, high quality supplements available to the patients of Family Practitioners and Internal Medicine doctors. Rythmia® Core Nutrition is an exclusive formulation of more than 70 high-density nutrients combined with CAE™, the active ingredient in AC-11®, which is a proprietary extract from the Tropical Rainforest botanical Uncaria tomentosa.  AC-11® is the only ingredient ever proven to promote DNA repair and reduce future DNA damage.

With Rythmia® providing the turnkey marketing efforts necessary to offer products to a practice's patients, the result is a win-win situation…

• patients win by enjoying a positive boost to their health through a supplement that not only has been proven to promote DNA repair but means more energy and sharper mental acuity when taken regularly; and
• doctors win by generating additional income through their practice without increasing their workload. The doctor has no buying, storing or selling of product.

Bill Grueninger, director of new business development for Rythmia®, was charged with finding the right fulfillment provider to manage the company's inventory and pick/pack/ship operation. Bill researched a number of fulfillment providers but knew he found the right choice when he identified Innovative Fulfillment Solutions (IFS).

"I spoke with (IFS president) Keith Milburn," said Bill. "He was very helpful and extremely knowledgeable. I asked him a lot of questions and he was very willing to answer them for me." Rythmia's headquarters office is in Pennsylvania but Bill said company executives agreed that IFS' central U.S. location was an important factor in the selection decision.

Rythmia's first orders started shipping in February of this year, and the volume of orders has steadily increased over the past seven months. Bill said that company executives are very pleased with the level of service that IFS provides.

To learn more about Rythmia® Practice Solutions, visit www.rythmiapracticesolutions.com

As you receive calls and orders from customers - along with inquiries from prospects - you are receiving valuable information. Not just who is placing the order but where they are located, what they are buying and how often they purchase.

Are you "mining" that information for the "gold" it can generate? If you're not, you should be! Using that valuable information to plan your future marketing efforts can definitely pay off. At IFS, we often provide data mining services for our clients. Some things you can determine through your data mining efforts:

Clarify your customer demographics so you can target your marketing efforts to other like-minded people. For instance, if your customers are mostly women between the ages of 35 and 49, you might consider reaching them through ads in women's magazines or through running direct response TV spots on a daily talk show. If your customers enjoy sports, you might consider running ads on live sports radio talk shows, with a special offer for station listeners. Or if your customers love to travel, consider online advertising in electronic travel newsletters.

Make the most of your best-selling items. Once you identify your best sellers in various price ranges, it not only makes inventory management easier, you can often "up sell" popular, less expensive items to callers who are placing an order. By adding something small at a very attractive price, you may be able to raise your average ticket price by 15 percent to 20 percent. That could make a very positive difference in your profitability!

Explore opportunities for a referral program. By mining your data from callers placing orders, if it becomes apparent that many of your customers are the result of referrals, consider launching a formal "customer referral program." Your customers can become your biggest source of new business if they are treated well and motivated to refer others to your company. So consider offering an incentive for existing customers, such as 10 percent off their next order for every new customer they refer.

At IFS, we see great success for clients who take advantage of our data mining services. So if you are not mining your valuable data for the extra "gems" it can generate, you're definitely missing out!

With the many delivery options available and customer expectations about when they will receive a product they have ordered, shipping can be an important aspect of the e-commerce transaction. And while there are a number of factors to consider when choosing the right shipping method for your product, it is important to look at all of them before making a final decision on the right delivery method.

While FedEx and UPS are considered the pre-eminent shipping providers today, they may not always be the best or most affordable solution for shipping your product. Before filling out that delivery form, consider the following:

• Price of your product
• Weight of the product/package
• Urgency to get the product delivered in a specified timeframe
• Necessity of tracing or signature requirement
• Perception or preference of your customer

Conversely, if your product weighs two pounds and sells for $119, you may want to consider Priority Mail, at a minimum cost of $4.95. Again, if your manufactured cost is 50 percent of the selling price, then your product cost is $59.90 and you may not want to risk sending it without the delivery signature or confirmation of receipt.

Finally, there is the issue of convenience and package track-ability. In today's e-commerce environment, many consumers are interested in the ability to check on their package along the delivery route. Often, USPS does not offer package tracking in a convenient format. The package must be hand-delivered to the post office (unless you use an Indicia) and that may not be convenient for your business. Without a delivery confirmation, if a customer claims he or she did not receive a package shipped via USPS, your choices of action are to either argue the point (and probably lose a customer), or apply good customer service and re-ship the product, thereby taking a loss on what you paid for the product. While this does not happen often, it is something you should be aware of when directing your customers to a particular delivery option.

As far as published delivery times, the USPS competes with UPS and FedEx so they report comparable shipping times to most locations. This is important when determining your shipping methods and services for your customers. With both UPS and FedEx, the shorter the distance a package travels the less the charge will be; so items shipped from the middle of the United States will, on average, always cost less and arrive sooner.

This may be a big factor for a customer when deciding where to purchase an item, especially if it is for a birthday, holiday or other special occasions. In the event a customer requests to have a package delivered quickly, it is important to point out that the difference between Expedited and Ground Delivery rates can be sizable. But in the end, it is wise to give your customers the choice of paying extra for quicker delivery.

The bottom line, make sure you have your shipping/delivery costs and procedures readily available for your customers to review. While you may not have control on the shipment once it leaves your facility, what happens to it on the way to its final shipping address could mean the difference between a satisfied, repeat customer and a freight car full of headaches and customer service issues.

It's probably no surprise to any of us that America is getting fatter. According to a recent report in Nutraceuticals World, roughly 72 million Americans fall into the category of overweight or obese. And children aren't spared. Forty percent of American children are overweight and - of those - half are obese.

Given the push to combat obesity, food and beverage companies are reported to have introduced more than 20,000 healthier product choices between 2002 and 2009 (see report by the Grocery Manufacturers Association's GMA "2010 Health & Wellness Survey"). That trend is expected to continue.

Some highlights from the GMA survey show:

• 93 percent of participant companies are developing, introducing and marketing healthier products;
• 91 percent of participant companies actively promote healthy lifestyles in the marketplace;
• 98 percent of participant companies have workplace wellness programs for their employees; and
• since 2002, food and beverage companies have spent more than $130 million in nutrition and health-related activities and grants to communities.

The survey also revealed that food and beverage companies collectively have:

• eliminated or reduced trans fat in more than 10,000 product choices;
• eliminated or reduced saturated fat in more than 66,000 product choices;
• reduced sugar/carbohydrates in more than 3,700 product choices;
• reduced sodium in more than 3,000 product choices; and
• reduced the calorie content of more than 3,500 product choices.

IFS is a world class, full-service fulfillment operation with a track record of success. A woman-owned business, we proudly serve some of the country's most respected corporations. With a special expertise in the fulfillment of nutraceuticals and cosmeceuticals, we can help you run your business more efficiently and more cost effectively. We appreciate your comments and welcome the opportunity to discuss your particular needs.