Amazon dominates supplement sales but is absent from industry trade groups

The Council for Responsible Nutrition (CRN), United Natural Products Alliance (UNPA), Natural Products Association (NPA) and American Herbal Products Association (AHPA) are among the supplement industry’s largest advocacy groups.

These organizations represent hundreds of companies involved in the supply, production and sale of dietary supplements.

They deploy representatives to Capitol Hill, the Food and Drug Administration (FDA) and Federal Trade Commission (FTC); collaborate on self-regulatory initiatives; advise members on key business, scientific, policy and regulatory matters; lobby state governments to promote access to supplements; and educate the public on the benefits of natural products.

Members of the four industry groups include a “who’s who” of the $61 billion-plus supplement sector — from Amway to GNC, Herbalife and Nestlé.

One e-commerce juggernaut, however, is noticeably absent from their membership lists: Amazon.

As the largest retailer of dietary supplements, achieving sales of more than $12 billion in 2023, some feel Amazon’s lack of participation in industry advocacy groups is a problem for the broader industry. In fact, the company has been charged with poor communications amid problems with counterfeit supplements and other products of poor quality sold through its e-commerce platform, including most recently understrength galantamine supplements.

Related:Amazon supplements sales bounce back after flattening

“There's no reason for Amazon not to be involved in all trade associations in this industry and really get a flavor of what's beneficial for the industry,” Dan Fabricant, Ph.D., CEO and president of NPA, stated.

He said his organization has reached out to Amazon about membership multiple times.

“There just hasn't been a lot of response,” noted Fabricant, whose organization was founded in 1936. “The fact they haven't tried to engage or reach out to us is a bit odd.”

NPA, based in Washington, D.C., represents more than 700 members of the dietary supplement industry that have retail, manufacturing, wholesale and distribution locations of natural products, including food, dietary supplements and health/beauty aids, according to its website.

Whether Amazon was invited to participate in membership at UNPA, CRN or AHPA was not disclosed by the associations.

CRN, also based in the nation’s capital, declined a request for an interview for this story. The trade association represents dietary supplement and functional food manufacturers and ingredient suppliers. Its members include such supplement heavyweights as Bayer HealthCare LLC, Nestlé Health Science and Pharmavite LLC.

Related:Supplement brands, Amazon and FDA weigh in on counterfeit products

Fabricant charged Amazon with operating in a “silo.”

“Amazon's concerns aren't about the industry,” he said. “Amazon's concerns are about Amazon business, which isn't traditionally for this industry. If they're not involved in the community, they're going, ‘Hey, we're Amazon. Here's how we think about this issue.’”

The Vitamin Shoppe, GNC and iHerb are other retailers that are represented on NPA’s board of directors and meet with NPA regularly, Fabricant shared.

“They're involved in D.C., they go meet with their representatives, they go meet with their senators, they talk about the industry specifically,” he said. “They talk about the good, the bad, the challenges, what the opportunities are. [Amazon is] not part of those conversations.”

This lack of support of industry by Amazon is “a problem for everybody,” Fabricant concluded.

He pointed to recently passed legislation in New York that will impose age limits on the sale of over-the-counter (OTC) diet pills and dietary supplements for weight loss or muscle building. The legislation, which is scheduled to take effect in April, would require showing identification for supplement purchases at point-of-sale, Fabricant said.

“For Amazon … that would be a substantial cost on their business,” he noted. “How many packages does Amazon deliver in New York? Either … they're not planning to check IDs or … they're just not going to sell dietary supplements in New York? It's a very interesting optic when you look at it from that lens.”

NPA in December filed a lawsuit in New York condemning the legislation as unconstitutional.

Amazon declined to comment for this story.

Another look at Amazon’s role

Loren Israelsen, founder and president of UNPA, named a key distinction critical to the discussion surrounding Amazon’s role in the industry: whether Amazon actually is a retailer.

Founded in 1992, UNPA is an association of dietary supplement and natural health companies. The Salt Lake City-based group played a pivotal role in the passage of the Dietary Supplement Health and Education Act of 1994 (DSHEA), which is nearing its 30th-year anniversary.

“Amazon does not regard itself as a retailer,” Israelsen said. “Rather, they are a technology platform where buyers and sellers can engage to do business, which Amazon facilitates via said technology.”

That changes Amazon’s perceived role as a gatekeeper, “as understood by other retailers in our industry,” to a “pass-through” role, he contended. This view is not unusual in the tech industry, he said.

“I think Amazon would say, at this moment, they are fulfilling their responsibility to be the most efficient — and now the largest — platform for the sale of dietary supplements in the U.S.,” Israelsen added. “If, as they believe, they are a technology company with a platform to bring sellers and buyers together, they are meeting and exceeding their commercial responsibility.” 

Still, trade associations agree that engaging with Amazon isn’t without challenges.

Israelsen described Amazon’s involvement with the industry as “sporadic.” He cited changes to industry contact points within Amazon as one reason for the inconsistent engagement with the supplement industry.

“Amazon tends to engage with our industry in a wave pattern: engage and pull back, repeat,” Israelsen suggested.

Fabricant, too, said internal personnel changes at Amazon have created challenging communication and collaboration efforts.

“Amazon moves people around frequently, so I think that creates some of the challenge,” he observed.

What’s more, Amazon’s large and complex platform presents unique challenges compared to other conventional retailers.

“Historically, the sheer scale and complexity of its operations have required industry members to interact with Amazon through automated systems or reporting tools,” Robert Marriott, director of regulatory affairs at AHPA, said.

Using these tools and systems to resolve issues has been a challenge reported by some AHPA members, he added, particularly when the issues are related to Amazon policies “intended to mirror federal law’s requirements.”

Dan Richard, VP of global sales and marketing with NOW Health Group, said Amazon is “unique” compared to other retailers by being “the biggest market and, likely, the most complicated.”

He said Amazon’s policy changes put brands in a position that requires them to change course and navigate the new rules. For smaller brands, that can be challenging.

“NOW has significantly more internal resources necessary to work with Amazon for these and other reasons than many brands do,” he said.

Some associations report progress, renewed engagement

Despite challenges, some trade associations reported progress in their collaboration efforts with the retail giant.

Amazon is an associate member of the Consumer Healthcare Products Association (CHPA), the organization told SupplySide Supplement Journal. CHPA represents the broader consumer health care industry, including OTC medicines, dietary supplements and consumer medical devices industries.

CHPA declined a request for comment.

Israelsen said Amazon accepted two invitations to speak to UNPA members about Amazon's enhanced seller programs, “which provide greater seller security [and] customer insights.”

Marriott said AHPA plans to host a webinar by Amazon in March that will review tools and resources available to brands in the Amazon marketplace. Founded in 1982, AHPA represents the herbal products industry.

The Silver Spring, Maryland-based association has established a “direct relationship” with staff at Amazon who are responsible for the company’s dietary supplement policies and initiatives, according to Marriott.

“As part of its activities to represent the dietary supplement and herbal products communities, AHPA now has regular meetings with our Amazon counterparts to provide industry insight, relay informed feedback on e-commerce policies, and share AHPA’s knowledge and resources on herbal ingredients and dietary supplement best practices,” he noted.

Marriott said AHPA’s consistent discussions with Amazon personnel represent “progress toward improved communication between Amazon and the trade.”

Moving forward, Israelsen acknowledged the need for greater participation by Amazon in industry efforts to improve the safety and quality of supplements.

“Without Amazon at the table, we will not fully realize our goals given their importance as a leading seller of dietary supplements,” he remarked. “Uniformity of industry standards and practices must be as widely adopted as possible to be effective. Only then will we reach the level of quality and compliance we seek.”