Internet pharmacies offer a host of benefits. They are convenient and allow customers to avoid going out in bad weather, parking hassles, standing in line and order fulfillment by the store staff and billing. Patients with limited mobility or those living far from a pharmacy can benefit tremendously from legitimate Internet pharmacies by eliminating travel to a traditional pharmacy. In this article, I have decided to take the TATA 1mg online pharmacy as a base and describe how you can build an online pharmacy business plan similar to TATA 1mg.
When I check the main tab of the site, I see that there is an “All medicines” tab and below that we see a “Medicines by Therapeutic Class”. Below that there are different categories like Anti Diabetic, Anti-Infectives, Anti Malarials etc. Within each of the different categories there are sub-categories such as Human Insulin Basal, Human Insulin Premix etc. As a start-up you can start with a list of very simple and medicines of daily use. The best way to set-up the revenue model is to get a database of the medicines from a pharma store or any online source with the price. The next step would be to take a simple calculation on the approximate sale of each category and the margin from each category of medicine. In this process, it is ideal to get inputs from a local store owner as that can give an idea on a month-on-month basis. As a start-up the best bet would be to start-up locally and then scale-up once investors have logged in.
The initial stages it is best to concentrate only on therapeutics and then move into segments like wellness, ayurveda etc. as we see on their site. However, if you want to start with these categories then you can start off by listing the products within these segments.
There are 2 ways to manage the logistics. One is dropshipping and the other is warehousing model. In my opinion dropshipping is the best way to start the business as it does not involve much capital and you can simply source the products from the distributor to the customer. To maintain the level of optimum delivery time the customer should be informed at the time of booking about the time needed to deliver the order. Since medicine is an emergency item, the time of delivery is a very critical factor. There are occasions when a brick and mortar store wants to move online and that model needs a little bit tweak than what we are discussing today. That is for another day and cannot be covered in this scope.
The next step would be to identify the market potential of the venture. If it is a local area, it is better to do a primary research by asking larger, medium and smaller medical store owners on their potential sale and then do a forecast by taking into consideration the overall number of stores. Similarly, we can do a secondary research by estimating the online sales as a percentage of the overall sales. This should give a rough idea of the market potential of the venture. Apart from market research, the standard sections of a business plan such as risks, competition, SWOT, market strategy and financial forecasts should be included as part of the plan. The risks are significant in this business since medicine industry is highly regulated. Two dangers that go hand-in-hand are self-diagnosis and self-medication because consumers can purchase prescription drugs without ever speaking to a pharmacist or physician. In these days of managed care, it might be weeks before a patient can see a physician for non-emergency purposes. Patients might choose to treat themselves rather than wait for an appointment, or the patient simply may be too embarrassed to discuss the health problem with his physician. These dangers are especially significant given that numerous Internet pharmacies are willing to dispense prescription drugs without a valid prescription. This should be a complete “No-No”. There should be a physician or a pharmacist who should verify the prescription before the medicines are delivered.
Another very important factor is to offer the right discounts and cash-back to the customers. This is a very effective marketing strategy and should be considered both from the point of view of the marketing strategy as well as the financials.
A large and established portal like 1 mg has multiple other offerings apart from therapeutics as we have discussed earlier in the article. However, for a start-up it may not be possible to launch so many categories in one go. A start-up may want to add a couple of more categories which are popular among customers such as fitness and supplement products like multi-vitamins, health food and drinks and nutritional drinks. These products have broader market acceptance and can add to the business volume of the start-up.
Ethical conduct ensuring privacy and confidentiality of the patient is one of the cornerstones of medical practice. Selling drugs over the Internet obviously necessitates the collection and use of confidential medical information. In an anarchic world over the Internet, nobody can be sure of what happens to this information. Therefore, online medicine sellers should give highest priority to customer data and security.
If you want to start an online pharmacy business and need to develop a comprehensive plan please connect with us at info@intelligentq.co.in.
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