Hustle Ideas

Why Pharmacy Is Profitable

A Pharmacy can be a very profitable venture, investing in a pharmacy can be a very wise financial move. Pharmacies provide an essential service to people; they provide access to medicines, and other medical inputs.

They come with different names; drug stores, chemists, and pharmacy; but in all, the service is the same; selling drugs.

Drugs are essential; people just cannot live without them. Operating a pharmacy therefore means selling something that people just cannot live without.

Why Pharmacy Is Profitable

Pharmacy is profitable because it offers relief from pain and sickness. A great number of the population of any country suffers from some form of ailment or the other. There are also many diseases that periodically spread within the population, as well as pain management which seems to have something to do with the active lifestyle that most people live these days.

Perhaps as a matter of culture, most people turn to pills and other forms of medicine to help them cope with pain, and to find relief from whatever diseases they suffer from.

Pharmacy therefore involves a steady stream of revenue; medicines are a daily need which people must pay daily to get. Interestingly, profit margins for some medicines can be as high as 20%. Profit margins can go a long way towards making a pharmacy profitable.

Variable Profit Margins

FMCG Products have a profit margin of 5-10%

Over The Counter medicines usually have a profit margin of 10-20%

Generic medicines have a profit margin of 20-30%

While prescription medicines usually have a profit margin of 15-20%

From the list above it is evident that generic medicines usually have the best profit margins, but a real pharmacy cannot have only generic medicines. In order to boost profits there are other considerations involved.

Good Location

As with every other business in this world, the location can make the difference going out of business, and making a fortune.

It is therefore of paramount importance that the pharmacy be located in a good place, where there is good foot traffic.

A large metropolitan area is always best; it is a good idea to have a large population because the higher the population, the higher the chances of making consistent sales.

Ideally, the kind of foot traffic that one wants for a pharmacy is the type wherein people spend a lot of time; something like a business district or a residential area. That is where people have the time to feel sick. To the contrary, a stadium receives lots of traffic, but then the people only spend a small amount of time in there, and for much of the time they are in a hysteria.

Multiple Locations

After establishing the first location, and building it until it becomes profitable, the next step is to open a second one. Of course all the initial considerations that helped build the first location will all come into play again; a good location, and considerations of the profit margins.

The true basis upon which profitability in the pharmacy business of today can be achieved is the establishment of multiple locations. You are not the first to think of this; it is a realization that has occurred to many other entrepreneurs previously.

Pharmacists now understand that the goal should be the establishment of a supermarket chain; which can exponentially increase the profits. Understanding the potential of that business model, many businesses have simplified the process by which it can be built.

Franchising

Franchising is not a new idea; it is like a partnership in which a person brings his existing location and resources, but takes on the identity, and the goodwill of an existing business-usually one with an established brand.

The above is clearly an over-simplification of the model, but it is really not that difficult to understand and implement.

Franchising works both ways; you can buy a franchise or sell one.

If buying a franchise there are several companies out there who are currently looking to expand their network. They always have some requirements such as; the standard for the kind of locations they approve, the minimum investment, and standard branding and signage.

When selling a franchise you generally have to lower your standards; that way you can get more clients, and quickly expand your network.

Most people reading about franchises are looking to buy into them rather than sell them, while many people choose to avoid franchises altogether. Whether one is interested in franchising or not, as long as one is interested in building a network of pharmacy branches, the following will be very important.

Managing Your Network

Effective management of a network of pharmacy branches can be quite easily achieved using technology. Technology can be helpful to help one so as to monitor the opening times of your stores, monitor inventory, monitor what people are buying, and monitor how your staff are performing. In order words, they can help ensure that the pharmacy is profitable.

There are many different software and apps that can help with these as stated above; some of them are everyday use apps as well. A little research can help one discover the most convenient software and apps that can help with this.

It is also very important to ensure that you hire the best staff that you can get; workers with a positive attitude generally have a positive impact on the business. That positive attitude will allow them attend to customers in a mild, respectful manner; thus ensuring that the business maintains a positive impression in the minds of customers.

In todays’ world, one bad review on an internet resource can have damaging effects on a business. This is something to avoid.

Further Reading:

Closing

Reasons why pharmacy is profitable include a ceaseless demand for pharmaceutical products, good profit margins on the goods, the possibility of growing the enterprise into a network of pharmacies, and the possibility of engaging technology to make the management seamless.

Even with the evolution of society in which large numbers of people are turning to natural products, pharmacies remain important contact points through which natural products can reach the people.

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