Why good Sports Nutrition does not have to be super expensive!
BAAM was founded on the conviction that good sports nutrition does not have to be expensive. We have proven this position with several „price-performance winning products“ in comparative tests.
But what are we doing differently? Why can we offer better prices? And does this affect the quality of our products?
In a nutshell:
We achieve this by being very cost-conscious in all areas. We work without any middlemen or expensive advertising activities and keep our operating costs as low as possible. This way, we can offer isotonic sports drinks, energy gels and recovery shakes, which are up to 50% cheaper than absolutely comparable products from established suppliers.
At the same time, we pay a lot of attention to the quality of our products and buy only from certified producers. Here we can often fall back on already developed products and their best running tastes. By doing so, we have been able to offer award-winning products under the BAAM brand.
But enough theory, let’s get to the facts!
But are these products really comparable?
As an example product we take the isotonic sports drink SiS Go Electrolyte from Science in Sport. As of July 2019 it is available at Bike24.de for 11.99€ per 500g. Converted to a price per 1’000g it is 23.98€. Our isotonic sports drink N-DURE is 9.80€ per 1’000g. BAAM offers a 60% better pricing. Clear win on points ?
But are they also comparable in terms of ingredients and nutritional values?
The list of ingredients of both products reads pretty much the same. Very high content of carbohydrates (especially maltodextrin), salts, aroma and mineral salts. And that makes totally sense. An isotonic drink must have an osmolality between 270 and 330 mmol/kg. This requires a certain ratio of carbohydrates and sodium. With isotonic drinks there are thus only small variations possible with regards to the formulation. Differentiation can happen in the selection of the carbohydrate source. However, this is very comparable for both products.
As a result, the nutritional values are very similar. Comparable energy values, similar sugar content, similar salt content. From our point of view, both products are indeed very comparable, both in terms of ingredients and nutritional values. And yet N-DURE from BAAM is 60% cheaper.
How is this possible?
How trade margins impact the the price of sports nutrition
Let’s take a look at the numbers behind Science in Sport. This company is listed on the stock exchange and has to publish its results accordingly. We have analyzed them:
The retailer receives up to 60%
of the retail sales price
The retailer receives up to 60%
of the retail sales price
Science in Sport sells a large part of its products through the retail trade. In return, the retail trade receives a profit margin, known as the trade margin. Retailers need this margin as they also have to pay for staff and premises. This trade margin varies usually between 30 and 60%. For simplicity’s sake, we assume 45%. This means that of the estimated 23.98€ per kilo in sales, only about 12.33€ turnover will remain with Science in Sport. Since BAAM works in direct sales and does not have to pay a trade margin, only 7% VAT is due and of the 9.80€ sales price of BAAM N-DURE, 9.16€ remain as turnover.
This way, the direct selling model contributes heavily to a better price for you!
Sponsoring and advertising are driving prices pf sports nutrition
SiS has been the official supplier of Team Sky / Ineos since 2016. And that adds to their bill of marketing spends 😉 Over the past seven years SiS has spent an average of 47% of its turnover on marketing and sales activities. In contrast, BAAM deliberately avoids expensive advertising activities. We only invest about 10% of our turnover in marketing. This brings us to the following figures:
| Product | Price | after Trade Margin and VAT |
after Marketing |
|
|---|---|---|---|---|
| SiS Go Electrolyte BAAM N-DURE |
23.98€ 9.80€ |
12.33€ 9.16€ |
6.53€ 8.24€ |
Exciting, isn’t it? Suddenly it looks like BAAM is the much more profitable business ? Unfortunately, this is not quite the case. Since we only buy in small quantities, our product costs are significantly higher than with SiS. They have averaged 42% in the last 7 years, whereas we are around 70% of sales.
| Product | Price | after Trade Margin and VAT |
after Marketing |
after Product Cost |
|---|---|---|---|---|
| SiS Go Electrolyte BAAM N-DURE |
23.98€ 9.80€ |
12.33€ 9.16€ |
6.53€ 8.24€ |
1.36€ 1.83€ |
Finally, there is about the same amount left after product costs and marketing. With BAAM products you simply pay a lot less for absolutely comparable products, because we work without middlemen and do without expensive advertising.
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