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What is Pharma Franchise Model? A blog about how franchising works in pharma.

In this article I will tell you about the Pharma Franchise Model and how it is different from other franchise models. Along with Pharma Franchise, I will drop you some basic knowledge about the entire franchise model. Franchise marketing meaning varies from industry to industry. A franchise is a model of distribution and represents the most common business structure that enables the franchisor to capture recurring business from their franchisees. The franchisees are then able to earn profits from the same set of rules, systems and standardized products sold by other franchises across the country. In today's world of marketing, franchising has emerged as a lucrative option for new ventures as it simplifies and streamline the process of starting a business. With so much advanced equipment, efficient manpower, trained professionals etc., many entrepreneurs find it financially rewarding to take up a franchise business. What is Franchising? Franchising is a business strategy that involv

How much investment required in third-party manufacturing and Loan License Manufacturing?

Today we will talk about a query. Query is that how much investment is required for third party manufacturing and loan licensing if started with 4 products?

Loan Licensing and Third Party, both are different

If we discuss in detail 
Loan licensing is what in which a pharmaceutical marketing company tie up with pharmaceutical manufacturing company and manufacturing company apply for issue for manufacturing license for marketing company in its premises that is applied at state drug control authority

That is like applying for new manufacturing license and that takes lots of investment because whole documents and process is to proceed from new way.
Plant, machinery and technical persons are used of manufacturing company and new manufacturing license is issued at marketing company name.

So, the manufactured by name is of marketing company also in loan license. Manufacturing name will be of marketing company in loan licensing. Only address is belonging to pharmaceutical manufacturing company. So, investment not only depend at products but initial investment also cost you lot.

If we talk about third party manufacturing concept, only you need to find for a third-party pharmaceutical manufacturing company who can provide you your marketed by product under your brand name at third party manufacturing basis.

You need to contact them and give your product detail that you want to manufacture and their brand name

If manufacturer already has approval of that ingredient/composition then it doesn't need to take approval but if manufacturer doesn't have approval, then it will take ingredient/composition approval from state drug licensing authority

Then manufacturer will design your products design and proceed further.

According to payment schedule and other term & conditions finalization, your products go into manufacturing process for finished goods.

In that case marketed by name and address will be yours and manufactured by name and address will be of actual manufacturing company.

Here you have to invest only amount as per cost of these four products only.

Investment requires for third party and contract manufacturing:

It is not fixed when we talk about investment or costing of product because some products are cheaper and some are expensive.

If you will get manufactured costlier product then your investment will go high and if those are cheaper then investment will be less

Suppose you get manufactured a product having cost 50 rs per box

and you get manufactured 500 boxes as minimum order quantity at third party manufacturing basis then this will cost you 500*50 = 25000 plus gst or freight included or excluded as finalized under term & conditions
So that will cost you 25000 plus gst

But if you have finalized a product having 600 rs per box and getting manufactured 300 boxes then this will cost you 600*300 = 180000 plus gst or freight included or excluded as finalized under term & conditions

So that's difficult to give idea how much investment you require to launch four products that depend at your products cost whether you are getting manufactured cheaper products or costlier products...

For cheaper products investment will be low and costlier product, it will be high.

It is better to avoid loan licensing in starting because you have to invest more at documents and licensing also

Some pharmaceutical manufacturing companies also charges monthly rent from marketing company for loan licensing because you are using its manufacturing facilities or they charge based on per pc or as per your tie-up that cost you more

But in third party manufacturing, you can avoid this so, you need to go for third party manufacturing.

And as per your products you can calculate whether they are cheaper or costlier and how much minimum order quantity, how much cost of your product, packaging charges if applicable or any security charges is applicable or not?

So, there are many factors

Calculate all and find out how much investment you require for getting manufactured your product at third party basis or loan licensing

Hope this information is helpful to you...


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