How Much Do Medical or Pharmacy Store Owners Earn in India?
The retail pharmaceutical business is a very lucrative sector with the ability to generate a lot of profit. The pharmaceutical market in India is set for a CAGR growth of 15% in retail sales throughout the next five years. A person with a particular knack for retail will benefit from working for the pharmaceutical retail industry.
This article will cover everything about the profit margins involved in the pharmacy store business. Listed here for complete clarity are some of the real responses provided by business owners.
Pharmacy and Medical Store Business Profit Margin
A medical store or a pharmacy makes gross margins of about 20-50 percent selling generic medicines in addition to 16-22 percent selling brand-name medicines. Along with these margins, a pharmacy enjoys the benefits and other perks of the scheme provided by the pharmaceutical drug manufacturer.
Medicine Wholesale Business Profit Margin
The Distributor margin for branded medicines is approximately 8-12%; while the margin for generic medicines is 10-20%. Distributors may enjoy offers and credit facilities as benefits from the drug companies. The medicine wholesale business has a good profit margin in the pharmaceutical industry.
A stockist’s margin is approximately 6-10% for branded medicines and 8 to 15 percent for generic medicines. A typical stockist must provide not only up-front payments for inventory but also credit facilities to distributors. Fewer opportunities for schemes and offers are provided by the manufacturer.
Carrying and forwarding agents are middlemen whose margins are approximately 4-8%. They receive stock from companies in large quantities and distribute it to the stock-taker in small increments.
Here are some of the shortlisted responses provided by the Medical/Pharmacy store owners on Quora.com:
Question – How much do pharmacy shop owners earn in India?
“The earnings of the pharmacy owner depends on the following:
- Volume of sales
- Operational costs
- Inventory management/Understanding the demand
In a few cases the margins are high but the overall average margin is between 25 and 30%. Most pharmacies, due to competition or in a bid to build customer relationships, provide a 5–10% discount. If the business was so lucrative everyone would be getting into the pharmaceutical retail business, but it has its share of difficulties.
It would take 6 months to understand the market and how to manage inventory, but overall it takes a year or a year and a half for the pharmacy to run smoothly.”
“Well! my father is a pharmacist and we are in this business for like 30 years.
We have a sale of around 30 to 40k per day and on fortunate days it can go up to 80 to 90k, while generic medicine can provide a profit of up to 60–70% on prescribed drugs; also ethical drugs have a profit range of 20–30%. So if you go by the average sale/day you can get income ranging between 3 to 4 lks per month.
But there are various factors that affect this business. Some of them are –
- Number of drug stores in and around a particular area.
- Number of hospitals near the drug store, as they provide vital customers.
- Availability of prescription drugs.
All in all, it’s a good business to invest in and can provide a stable income. And you can easily increase your business by providing surgical items that are very high in profit; also Ayurveda medicine: the potential is very broad.”
Ragnesh Malik Says:
“Medical stores earn tremendous margins. I worked for Abbott healthcare awhile back for the diabetes division.
The medical store’s margin on these categories of medicines were 26–30% on MRP, and they sell medicine usually on MRP. So they earn Rs 30 for every Rs 100 medicine sold.
For medicines treating chronic critical diseases like cancer, the margins are as high as 70–80%.
Apart from this, for local or unknown brands, the margins are between 50 and 80%.
For promotional purposes, even with a discount of 10–20%, there are profits.
A pharmacy or a medical store is a promising business in India. With decent profits a pharmacy can be a lucrative investment. By planning properly, studying the competition and identifying the right location, you can guarantee success.”