aaronsingerman

The Secrets of A Sports Supplement Mogul

Allow Aaron Singerman, CEO of the rapidly-expanding supplement company RedCon1, to help make your bank account as swole as your arms

If you were anything like me during the 1990s — an aspiring meathead adrift amidst the aisles of overpriced creatine tablets and whey protein powders at the local GNC — the whole business of sports supplementation seemed like laboratory-spawned magic. Here, for the taking, were all the then-legal arrows in the pimple-faced teen lifter’s quiver: androstenedione, ephedrine and the huge 50-pound buckets of “mass gainer” that offered 1,200 calories a serving yet somehow contained only eight servings a tub. What a world of high science this was, with men like EAS (which stood, amazingly enough, for “Experimental & Applied Science”) CEO Bill Phillips pictured in ads wearing lab coats and promising extraordinary physical returns on our investments. 

Surely none of us could have become supplement moguls ourselves, presiding over an empire of “rainbow”-flavored pre-workout dust! Surely this kind of career was open only to technological innovators and brain geniuses, men who were toiling over Bunsen burners to ensure that we had the cutting-edge products we needed to meet our swole goals! 

Well, think again. The world of sports supplementation, though growing in market value each year as consumers become more interested in diet and exercise, has long been the province of hustlers, canny businessmen, oddballs and ne’er-do-wells. Ben and Joe Weider kicked off their long-running fitness business by stapling together some muscle magazines in their parents’ basement. Bob Hoffman, who ran York Barbell and funded the U.S. weightlifting team for decades, mixed his protein powder in big drums in his kitchen. Ron Penna, who co-founded the Quest Nutrition brand that was recently sold for a billion dollars, had been a bodybuilder whose search engine optimization company became the subject of a steamy tell-all in Salon after it crashed and burned in the early 2000s. 

Then there’s Aaron Singerman, CEO of the rapidly-expanding supplement company RedCon1 and my guide to this unusual world. Singerman has worn many hats over his long career, but he started out during the 1990s as an amateur bodybuilder who posted a lot on bodybuilding forums. In fact, after he ditched his early alias “AaronS889” and began posting under his own name, he wrote thousands of posts on them — as well as articles for bodybuilding websites — getting his name out there as he furiously networked within the fitness community.

Initially, Singerman wasn’t trying to become a supplement kingpin, just someone who earned a good living from the fitness industry. “There were major barriers to entry in the 1990s,” he tells me. “Players like EAS, MetRX and MuscleTech carved up the market. Distribution was tied to brick-and-mortar stores like GNC, which meant you had to get your inventory onto their shelves to turn a profit. The number of manufacturers was smaller, too, and they required that you place much larger orders. And if you’re placing a larger order, you’re really exposing yourself financially.”

But by the late 2000s, when Singerman had begun building a name for himself in the nascent social media space through relentless self-promotion, a pair of popular podcasts and a working relationship with former pro bodybuilder and fitness expert Dave Palumbo, the nature of manufacturing had changed. “If you’re thinking about manufacturers as these huge operations and giant industrial plants, that isn’t what we’re talking about,” Singerman says. 

The way it works is relatively simple: a would-be fitness entrepreneur has a little capital, maybe a hundred grand, and approaches a manufacturing operation with some general product ideas. The manufacturer might have some formulas or recipes on hand; the fitness entrepreneur might have some ideas. Most of the basic ingredients in these creatine powders and pre-workout drinks are sourced from overseas distributors, and then assembled by the manufacturers, who might just consist of a few people operating a commercial-grade pill encapsulator that seals powder within capsules. Or the manufacturer could possess an industrial mixer sufficient to combine the ingredients in a pre-workout drink with the flavorings and other additives needed to make it palatable to most consumers. 

“These don’t necessarily have to be sophisticated operations,” Singerman says. “In our case, because we’re a high-revenue company, we can source FDA-compliant substances from factories that follow good manufacturing practices that offer protection against ingredient adulteration. But if you’re somebody who has a few thousand dollars and wants to make a quick but shady return, you can perhaps find a small manufacturer who will put some non-compliant substances or substances the FDA has issued warnings about, like SARMS [selective androgen receptors], into pills for you. That’s not good for me, because I’m running a big business with lots of employees and a lawyer overseeing everything to make sure it’s all above board, but it’s good for the person who is exploiting that market inefficiency, hoping to avoid the long arm of the government regulator.” 

But what does the small-time fitness operator do with his newly-minted supply? “You could possibly just hustle that stuff into a brick-and-mortar store and offer it up to the owner, saying you’ll take your cut if it sells, or promote it at a fitness expo like the Olympia or the Arnold Classic,” says Singerman. “Every year there are a thousand booths full of these hopeful folks, but from year to year, it’s rarely the same ones. It’s a lot of undercapitalized people just trying to get their products out there.”

Meanwhile, manufacturers, especially low-end manufacturers, can easily take advantage of their customers. “It’s very easy to cut costs on the manufacturing side by not filling the tiny capsule with the right amount of the active ingredient, reducing it by a few milligrams and saving yourself a few bucks in the process,” Singerman explains. “Do that across thousands of pills and you’ve saved yourself a ton of money, and the customer has possibly been sold a non-efficacious dose of whatever he’s trying to make. The only alternative is testing, and the cost is very high. It costs four grand to test one batch of RedCon1’s Total War pre-workout powder, and we have 14 separate flavor batches. That’s a ton of upfront cost that we have to bear just for one product.” 

In terms of profit margins, the hierarchy is pretty simple. Pills, Singerman explains, are at the very top — a typically great return on a minuscule amount of product. Powders, which require mixing and therefore incur higher manufacturing costs, offer a moderate return, perhaps a bit more if you’re one of those companies that attribute large portions of their nutritional profile to “proprietary blends” but don’t disclose the proportions of those ingredients and can thus minimize the use of the most expensive ingredients. And whey protein is at the bottom, offering small returns on what’s usually a volume business. 

“Whey is what’s left after milk has been curdled and strained, and with the rise in whey protein consumption, it’s gone from an afterthought to a valuable commodity,” Singerman says. “But that’s where a major player like Glanbia, an enormous Irish dairy group that’s vertically integrated across dairy farms and processing centers, as well as popular U.S. supplement brands like Optimum Nutrition, has a big advantage. The rest of us are left to buy whey from whey suppliers, but they are a whey supplier.” 

When Singerman launched RedCon1, he was luckier than most other would-be fitness entrepreneurs: He had a $500,000 line of credit available to him. But he’d also done the work, generating hundreds of thousands of dollars in revenue for other supplement companies as tracked by the coupon codes he distributed. He was, in other words, a proven commodity. “I saw that I was making different companies $100,000 a month, and getting a small fraction of that,” he says. “Even so, I didn’t have venture capital groups lining up to fund me. I had a decent line of credit because of my reputation, but I wasn’t funded to the tune of billions. I attended an ‘industry disruptors’ event at Facebook headquarters recently, and realized that many other folks who were ‘disrupting’ industries had taken tons of venture capital yet were also losing tons of money every month.”

For Singerman, this drove home the stark reality of the supplement industry. If RedCon1 wasn’t profitable for a year, the company might go out of business. No one would bankroll him while he lost money endlessly, like Uber or Lyft, because the supplement industry had never worked that way. Even profitable companies were always at risk from unusual circumstances, like the death of a popular bodybuilder or fitness influencer who was associated with the company.

“Take something like Rich Piana’s 5% Nutrition, which Rich owned part of and which was very much tied up with his larger-than-life public profile. When Rich passed away, their business slumped,” Singerman says. “Or say you’ve got a pro bodybuilder fronting your product or appearing on your labels, and that bodybuilder becomes irrelevant, gets injured or does something that damages their reputation. Or you can put some money behind an influencer, like another company I was working with did, and you end up picking the wrong influencer — in that case a woman who was very well-endowed but not associated with fitness — and you get trashed by your customer base because you look stupid by paying that person to promote you, to the point at which you ask them to take down the post you paid for.”

“RedCon1 went through a version of this when Dallas McCarver, who looked like a future Mr. Olympia, passed away two years ago at age 26,” Singerman continues. “It was a terrible tragedy, and it also could have been bad for RedCon1 because we were tied up with him, even launching his ‘Outgrow Your Ego’ clothing brand. But we were diversified by that point and able to weather that storm.”

Apparel lines and other brand (and co-branded) extensions, of course, are a far cry from hustling quasi-legal supplements out of the trunk of your car to gym patrons, to convention-goers from a half-opened gym bag while wandering around the floor of a fitness expo or by begging mom-and-pop supplement store owners to put your products on their shelves on a consignment basis. But from these modest roots can spring mighty oaks, as in the case of Joe and Ben Weider turning a line of homemade muscle magazines that were initially directed at a gay readership into an international business that encompassed weights, gear and supplements. 

“You take a look at Quest Nutrition, which marketed those dense, ‘extruded’ protein bars so effectively that they wound up in gas stations all around the country. Their distribution is absolutely insane, and that’s why Simply Good Foods paid a billion dollars for them,” Singerman says. “At some point, nearly every entrepreneur will sell their business, it’s inevitable. In the supplement world, something like that is reaching the mountaintop. That’s the big league.” 

How, then, does one get that billion dollar check? With real muscle, says Singerman. “Everything I’ve done has been about the business,” he explains. “I like the fitness world and I enjoy exercising, but I didn’t build my company to become popular on social media or impress bodybuilders. Although I admire competitive bodybuilders and powerlifters, that wasn’t in the cards for me genetically. I wanted to work in the fitness industry. I wanted to make money in the fitness industry. And everything I’ve ever done has been a means to that end.

“If you want to accomplish that other stuff — getting praised by other lifters or getting tons of likes on a picture or obsessing over the fitness gossip — you might make a decent living if you’re talented enough, but you’ll never be as successful as you could have been. No product sells itself. You have to do the work.”