Retail Pharmacy is an outlet where pre-packed medicine are sold for end consumers. These stores are open in every part of the city . In addition to medicine, a pharmacy can also provide other necessities as well. In other words, if a pharmacy is properly managed it could also work out as a convenience store.
The investment required for this business is around 2 million rupees including the cost for inventory , decor and furniture.
Target Audience for this business are users who wish to purchase medicines and other convenience store products.
The location of the pharmacy should have free parking space and should be situated close to the residential. If it is located near a hospital, the flow of customers will also increase.
The profit margin on retail pharmacy medicines ranges from 15% to 20%.
The business model works on simple supply chain model. The retailer buys the products from the company designated distributor and sells the product to the end consumer by keeping the assigned profits and margins. This business model falls under the ministry of health. They have issued different sets of rules which are to be followed by the owner of the pharmacy.
Investment requirement (with breakdown)
• Land – 35,000-40,000/Per Month
• Land Advance- 300000/ One Time
• License fee – 10,000/Annual
• Equipment’s and Interior – 5 Lac (One Time)
• Stock/Inventory – 10 Lac (One Time)
• Qualified Person (If the person planning to open does not hold a pharmacy degree)- 60000/Annual
• Front Enter Staff – 30000/ Per Month (3 Person)
Initial Requirements (registration/equipment)
• Before you start your pharmacy you have to register it with the drug court and obtain proper license from the government. Before opening, an approval from the respective area drug Inspector is required.
• The basic equipment required in a pharmacy is;
– Air conditioner for proper temperature
– Refrigerator for vaccinations
The overall Running cost to open up a pharmacy ranges from 20 Lac to 25 Lac depending upon the scale of the pharmacy and location.
• Trained working Front Desk Staff (2 to 3 Persons)
• Cashier (1 Person)
• Sweeper (1 Person)
The Marketing tools that could be used for this type of the business are as follows:
The break even can be achieved within a period of 6 to 12 months depending upon the business size.
The major problems are as follows :
• Government Restrictions and Drug Law
• Frequent visits by Drug Inspector
• Mindset of the end consumers
• Credit limit requirement by the customers
Backbone of Business
The Back bone of the business is how you manage your inventory, how much you increase your stock level (shelf level) with the passage of time and how much you incorporate the consumer demands in terms of items in your stock. The business is also dependent on the increasing range of new medicines with new formulation. Keeping the updated variety of medicine also plays a key role.