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How e-pharmacies would able to give 18-20% discount to customers?

Query: First of all, a big thanks for your work. Pharmaceutical industry looks like complex web for a common people but due to your blog it is easy for us to understand this whole industry. Now coming to my question, I want to know if total margin for retailers in this industry is 18-20% then how netmeds, pharmeasy and other online players are giving 25% discount? And what steps we have to take if we want to open pharmacy shop and want to give 15-20% discount. Can a retailer buy medicines directly from company or c&f and cutting margin of distributor/Wholesaler? Response: Online players give discounts upto 18-20% or something like that. Not at all products they give exact margins. In the pharmaceutical industry , Only few brands give less margin, most brands give good margin plus schemes etc, even to offline retailers. If we talk about generic and other products there are huge discounts like product cost is 30 rs and mrp is 100 rs. So, an 25% discount in the pharma market is not

Wholesale of medicine : How should I start and How much funds are required to start?

“I need a query regarding business of wholesaler of medicine. How should I start and how much funds are required in that firm? Please let me know about this business.”

This is one of the most common question about pharmaceutical wholesale and distribution business. How should I start and How much funds are required to start wholesale of medicine? This article will be divided into two parts. One is how to start business of wholesale of medicines and second is how much funds are required to start business of wholesale of medicines.

How to start business of wholesale of medicines?

First most important thing to start wholesale business of medicine is to take experience of it. Without experience it will be difficult to run wholesale of medicine.

Experience in medicine wholesale market can be taken by following ways:
  • By spending time at any relative or known medicine wholesale firm
  • By doing job at medicine wholesale firm
  • Medical representative and pharma sales job also provide wholesale market experience
Take experience in medicine wholesale market for some time. Time depends at your exposure and learning capability. It may be six months, year, couple of years or more. If you are graduate then you require to take minimum of one year of experience to become competent person and eligible to start wholesale medicine firm without requirement of registered pharmacist. You need proper documentation proof to show to drug department about your one experience at medicine wholesale firm.

After taking experience at medicine wholesale firm, you need most basic requirement i.e. premises/shop. Shop/Premises area should be minimum of 10 square meters with concrete roof, cemented walls and floor with furniture and shelfs. Shop/premises may be owned or rented.

By completing Shop arrangement process, you need to visit District Drug Licensing Authority for applying for wholesale drug license. You should ask for all documents list you require to complete before submitting for wholesale drug license.

Take this list and complete all documents. General documents required are as follow:
  • Application Form
  • Competent Person (Check about competent person for wholesale drug license here) Educational and Experience details
  • Firms related details (Proprietorship/Partnership/Company etc) and owner/partners/director details (address proof, identity proofs, affidavits etc)
  • Shop/Premises possession details (Rent agreement for rented premises or ownership proof for owned shop/premises)
  • Blue print of premises
  • Refrigerator and ac purchase bill copies etc
After completing all documents and requirements prescribed by drug licensing authority, you need to submit your wholesale drug license file online or offline (depend at your state procedure).

After receiving application, drug licensing authority will inspect your shop/premises for verification of your documents and specifications, you included along with application form. If all specifications are good enough as per need and requirement prescribed by drug authority then your application will be processed for issuing of wholesale drug license.

After receiving of wholesale drug license, you can start wholesale of medicines. Along with wholesale drug license, you can also take GST number.

Next step is for searching of a medicine company whose products, you can supply at wholesale basis. Check out our article: How to take distribution of a pharmaceutical company? For more detail about taking wholesale distribution of a medicine company.

How much funds are required to start business of wholesale of medicines?

Approximate 3-5 lakh investment (except shop/premises investment) is required to start medicine wholesale business. Funds required is not fixed and may vary based upon many factors. In metro cities and high-profile locations, investment will be at upper side and at interior or remote locations, investment may be less.

Major fund required (if shop is not owned) in following things:
  • Licensing and Documentation process
  • Furniture, shop decoration, computer, printer, refrigerator and Air conditioner etc
  • Medicine Purchased from Pharma Company
Medicine wholesale market is credit-based market. You have to supply medicines at credit basis to medical stores, pharmacies, hospitals and other institutions. Credit terms would be as per mutual understanding. This will also increase your fund requirement and investment in market.

Hope above information is helpful to you…

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