Manage and Operate a Generic Drugstore
Generic drugstores have sprouted in almost every street corner, with some generic chains now spending millions advertising on prime time television—an indicator that they have large profits to spend. All of this point to generic medicine as a booming business.
But before you put up your own generic drugstore, you must learn what differentiates it from the usual drugstore. Its strategy is focused on selling mainly generic medicines, although it can also carry branded items.
From the viewpoint of a small or medium scale entrepreneur, a generic drugstore is far more attractive than the normal drugstore. The capital needed for a generic store is just a fraction of what is necessary for a full line store because generic medicines are much cheaper than their branded counterparts. You can start a generic drugstore for around half a million pesos.
Another advantage of generic drugstores are the high profit margins. Mark-ups of one hundred percent and more are common, unlike the usual five to ten percent mark-up on popular branded medicine.
Even if you are not a pharmacist, you can own a drugstore, since you can just hire the services of a licensed pharmacist. To those who are planning to start a generic drugstore from scratch instead of buying a franchise, here are some tips on how to operate one:
• Get an excellent location. Medicine is usually bought where it is most convenient. Although a generic drugstore can survive on lesser sales because of the higher margins, you must not forget that branded medicines are far more popular. A good location is critical to get sufficient sales.
• Source generics directly, but branded items through wholesalers. The nearer you are to the source, the cheaper the price. Unfortunately, branded medicine is very expensive and there are minimum amounts needed to purchase from the main distributor. If you are just starting, it would be better to get branded medicine from loose stocks from a wholesaler even if they are slightly more expensive, in order to lessen your investment.
• Get a Point of Sale System. Do not be left behind by technology. Trying to manage your inventory and purchases with a manual system will leave you with too little time to focus on other aspects of the business. With the help of additional modules, a good POS will also help monitor your personnel, automate your accounting and other functions.
• Have your store designed by a professional. A well-designed store is not only attractive to customers, but also the layout should be functional. The cost of renovation should also be considered.
• Study the ideal product assortment. You must have the right product mix. To attract customers you must carry some branded medicines and other products, but the bulk of the profit will really come from the generics. In purchasing branded medicine, stock up only the popular over-the-counter items.
• Plan your pricing strategically. A great deal of your profits will come from how well you do your pricing. You must be able to maintain a high profit margin on your generic items. However, you must do this while maintaining an image of reasonable prices. The well-known branded items must be priced competitively.
Generic drugstores are very popular nowadays due to the growing demand for affordable medicine, but operating them is not simple. You can opt to buy a franchise or you can start a generic drugstore yourself. If you want to save on capital or simply want more profits by starting your own drugstore, it would be best to attend a seminar first to see if it is really for you.
BusinessCoach, Inc., a leading business seminar provider, will conduct a seminar on this venture. Click here to view details of the seminar: How to Start a Drugstore Business »
*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.
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