What is the future of pharmacy business? Will it continue to be attractive?
- With an increase in the average life span, changing lifestyle conditions and access to healthcare facilities, there is an increasing demand for health care products such as medicines, surgical items and wellness products and services across the country
- As per the market surveys, the current size of the Indian pharmacy market is about Rs 80,000 Crores and is expected to cross Rs 160,000 Crores by year 2020
- Organized retail pharmacy chains like MedPlus have around 6-7% market share
- The retail pharmacy industry is expected to grow around 20% year on year with organized pharmacies increasing their market share to around 30% of the market by 2020
What are the operational activities involved in running a retail pharmacy?
- Retail pharmacy is similar to a trading business
- Operations primarily consist of sourcing the required medicines and other general products from many suppliers and selling them to the end customers through the retail counter
To be able to do this successfully, a pharmacy should be well versed in these:
- Identifying and estimating the demand for the products in the area
- Maintaining stock levels and ensuring availability of the products
- Minimizing stock loss due to expiry, damage, theft or pilferage
- Identifying multiple suppliers for all the products
- Negotiating prices, discounts and payment terms with the suppliers
- Procuring in time and as per need
- Maintaining necessary registrations, documentation and procedures to comply with the laws of the state and drug regulatory authorities
- Maintaining a record of customer details, sales data and stock outs
- Continuous updating of stock based on knowledge acquired over time
- Managing the staff members involved in the pharmacy operations
- Managing cash with an understanding of costs, revenue, profit and loss
- Satisfying customers with great service
- Generating demand by marketing and promotional schemes
Why MedPlus Franchise?
- MedPlus brand is highly recognized and well trusted for its integrity and the great benefits it offers to its customers
- MedPlus has successfully built the largest retail pharmacy chain in India in the shortest time
- MedPlus operates a network of stores across 12 states and over 150 cities with over 1350 successful pharmacies
- Medplus is well known for providing quality and genuine medicines, superior customer service and great value for money
As a MedPlus franchisee
- You can carry the pride of our success in your locality in a reputable profession with assured income
- You are assured of the best training, knowledge, and support for running a large pharmacy because of our strong operations expertise and sourcing, technology and execution capabilities
- You get to run a highly recognized brand pharmacy with a large mix of medical and general products at a very reasonable investment of Rs 17 lakhs to Rs 20 lakhs
- You can avail a credit facility or loan from State Bank of India under a special scheme for about 60% of your investment requirement
- You generate a volume of business that is 2 or 3 times higher than competition and enjoy higher customer retention and repeat purchases due to our brand pull and the attractiveness of our loyalty and reward program – FlexiRewards
- You generate higher profits by having access to our high quality private label brands with higher margins
What are the advantages of a MedPlus Franchise in comparison with an independent pharmacy store?
As a MedPlus Franchisee, you are at an unparalleled advantage to address these challenges encountered in operating a pharmacy
Challenge 1: Sourcing a high number of SKUs(Products) from a highly fragmented market
To manage hundreds and thousands of brands and products in terms of sourcing, stocking and payments while managing sales & staff. Advantage@ MedPlus Franchise; Our proven process handles this just at the click of a button. All you need to do is to concentrate on counter sales, staff management, and customer relations
Challenge 2: Proper inventory planning
A pharmacy is only successful if it is able to make all requested products available. However, poor inventory planning leads to lock of capital and losses due to unsold and expired stock. Advantage @ MedPlus Franchise; Inventory management and ordering as per local demand is completely automated to avoid additional capital investment needs and minimize losses.
Challenge 3: Low quality and fake medicines
Due to a fragmented and unregulated supply chain, low grade, poor quality medicines are easily available in the market. Protection from them needs investment in process, time and experience
Advantage @ MedPlus Franchise
- MedPlus minimizes this by sourcing all products directly from manufacturers and its direct authorized distributors only
- The stocks are then meticulously maintained in proper storage conditions during warehousing and transportation to the pharmacies
Challenge 4: Competition
Pharmacy business is a relatively low risk business with a good return on investment, hence competition is high
Advantage @ MedPlus Franchise; Brand recognition and attractive discount and loyalty schemes attract a high number to customers to the store and retain the customers. An independent pharmacy will never be able to offer 20 to 30% savings on medicines that a MedPlus store is offer.
Challenge 5: Profitability and Gross Margins
The trade margins for many of the products sold in a pharmacy are low and fixed. To address this, an independent pharmacy has to source less priced private label products with best quality which can happen only if volumes are good and have a domain expertise in sourcing.
Advantage @ MedPlus Franchise; MedPlus, due to its huge scale is able to offer a wide range of high quality private label products both in medical and general segments with a higher margin.
Challenge 6: Online pharmacies
Online retail is growing by significant leaps and bounds in India and it is just a matter of time before e-pharmacies will become an established feature of the competitive landscape. This is definitely a threat for an independent pharmacy.
Advantage @ MedPlus Franchise; We are an omni-channel retailer. MedPlus Franchise can service both online and offline customers in that area.
Challenge 7: IT systems & technology Support
To do well, pharmacies need easy to operate, tamper proof, transparent MIS technology and billing systems which are often expensive to procure and difficult to use Advantage @ MedPlus Franchise; We provide all the systems needed by the franchisee and technology support which enables you to handle the pharmacy – sales, purchases, customer records, bank deposits without any hassle. To reduce billing time we are the first ones in pharmacy business to introduce bar-coded products.
Challenge 8: Additional sources of revenue
For marketing their products, medical and FMCG brands engage pharmacies to preferentially display their products or to advertise their services to the walk-in customers. Additional revenue benefit will be very minimal as an independent pharmacy.
Advantage @ MedPlus Franchise; Due to our reach and better negotiating capacity, the ability to earn a better income is more through this channel. This is a shared income between the franchise and MedPlus.
Challenge 9: Investment capital
To start an Independent Pharmacy of a similar standard to a MedPlus store, a capital investment of Rs. 18 - 20 lakhs is needed, plus an additional investment towards working capital to fund non-moving inventory and initial operating losses.
Advantage @ MedPlus Franchise; You will be able to start with a self investment of 6-8 lakhs, and obtain the rest of the capital in the form of a loan through the financial assistance scheme in place with SBI exclusively for MedPlus Franchisees.
What support does MedPlus provide to the franchisee?
- Assistance with selecting the right location for the store
- Help with store identification and lease finalization
- Complete layout plan, branding materials and furniture and systems required
- Training for the franchisee and its staff
- Facilitate a bank loan if required
- Supply all products sold through the store
- Operational support through the running of the store
- Audit support
What is the eligibility criteria to be a franchisee or who can become a franchisee?
- Individuals willing to work hard, diligent and dedicated
- Should be willing to personally manage the pharmacy operations rather than through employees
- Should have the ability to do basic mathematics and understand trade terms, margins, profit & loss
Education & Experience:
- A pharmacist qualification is helpful, however it is not mandatory
- At a minimum, candidate should have completed SSC or Intermediate level education
- Prior experience in a pharmacy or managing a small business will be favorable
Ability to invest about Rs 6 to 7 lakhs and own a collateral property worth at least Rs 6 lakhs to receive a loan under the special scheme towards remaining investment
In what locations are the franchises offered?
MedPlus Franchises will become available across India. However in the initial phase, franchises are being offered only in the states of Telangana and Andhra Pradesh
Location & Premises Criteria:
Any town with more than 50,000 population would be suitable for a Medplus Pharmacy
A minimum of 300 Sft or more in the main market area with good frontage and unrestricted access to the premises
What are the investment details for a franchise store?
Total investment required to set up a MedPlus Franchise is between Rs 17.50 to 20 lakhs depending on the location and the size and condition of the premises. This amount covers franchisee fee, refundable security deposit to premises owner (rental advance), interiors, storage racks, furniture, computer systems and printer, branded stationary and initial inventory (stocks).
Of this amount, the franchisee should be able to invest Rs 6-7 lakhs of his own and would be able to obtain the balance as a loan under a special scheme through State Bank of India across India, subject to having a collateral of around 6 lakhs.