Newsmakers - NutraOrigin shutters its direct-to-consumer business

The nutritional supplements company will continue to operate a wholesale business.

Zak Stambor

Managing Editor

Tim Peterson speaking at the IRWD conference earlier this year.

NutraOrigin, an online retailer of dietary supplements, last month shut down its direct-to-consumer business, which operated NutraOrigin.com. Robert Family Holdings Inc., the company’s parent, says it will run NutraOrigin as a wholesale business.

“Our parent company didn’t think it could make money quick enough to justify continuing operations,” says Tim Peterson, the retailer’s former vice president of marketing. Peterson left the company last month and is now a consultant.

Before closing its direct-to-consumer business, roughly 90% of NutraOrigin’s business came from direct-to-consumer sales, according to a company spokeswoman.

Even so, the company is probably focusing on the wholesale business because it is far less expensive to operate, requiring fewer marketing dollars and employees than a retail business, says Peterson. For instance, the company now has five full-time employees, down from the nine it had while operating its direct-to-consumer business.

Peterson joined NutraOrigin in late 2009. At the time the retailer’s site attracted fewer than 100 visitors a day and converted at only 0.25%, well below the e-commerce norm of around 3%.

Working with design and consulting firm Tellus, the retailer launched a $150,000 redesign effort in January 2010. The first phase focused on making its online shopping experience better to encourage consumers to become what the retailer called “continuity” buyers—those who subscribe to receive regular supplies of vitamins and supplements. Later phases included efforts such as making sure the site design was flexible enough that NutraOrigin could add more brands later on, and so it could sell wholesale via the web.

The redesigned site went live in 60 days. A year later the retailer’s conversion rate averaged around 2.4%, nearly 10 times what it was before, and its traffic increased 10 fold to more than 1,000 visitors a day, Peterson reported at the Internet Retailer Web Design & Usability Conference in February. However, that success wasn’t enough to keep the company going, he says.