Stay up to date with the latest COVID-19 news. Learn More

Insights

5 Key Steps To Make Your Pharmacy More Profitable...

Written by Peter Ryan . April 01, 2018
3 min read

The profitability of pharmacies is under increasing pressure as price disclosure continues to impact. To manage profitability pharmacy operators need to manage the parts of their business that are in their control. Some quick answers to boost your profit would make life a little easier and the direction to take so much clearer. So we've pulled the steps together for you in a succinct article, and the answers may surprise you! Take a look at the 5 critical success factors to make your pharmacy more profitable.

 

Contents

  1. 1.    Spend time with your customers
  2. 2.    Partnership with GPs
  3. 3.    Don’t overdo OTC
  4. 4.    Get the staffing model right
  5. 5.    Offer the right services

 

1.    Spend time with your customers

Customers come to a pharmacy for medication, but also to get advice from a pharmacist. It is critical that pharmacists do not hide in the dispensary. Pharmacists need to engage with and counsel their customers. This gives the customer the best experience, quite often leads to complementary sales and ensures they keep coming back.

2.    Partnership with GPs

Having strong relationships with GPs is critical. Not only for the holistic care of the patient, but also as a source of new and repeat customers. Some pharmacies have started to partner with GPs, reducing the size of their pharmacy store to allow a GP medical practice to set-up in or alongside.

3.    Don’t overdo OTC

The push within the industry is for pharmacies to do more over-the-counter (OTC) retail sales to make up for falling dispensary income. In some cases pharmacies are directly competing with big supermarket chains who can sell the goods at much lower prices. The reality is OTC sales contribute significantly less than pharmacists are lead to believe. Significant investment in stock, higher staffing levels and the cost of additional store space all impact on profitability. Understanding which products to carry and which products to avoid is critical.

4.    Get the staffing model right

Apart from stock, staffing is a pharmacy’s most significant cost, ranging from 10-15% of income. As margins on dispensary items continue to fall, getting the right level and mix of staff is critical. Properly understanding when and if customer levels peak throughout a day or week will determine how many staff are required. With pharmacists increasingly adopting a forward dispensing model and reducing unprofitable OTC stock items, the need for a large number of shop assistants is decreasing.

5.    Offer the right services

Pharmacy practice incentives were introduced to promote pharmacists to do more clinical interventions, improving the quality of care for patients.  As well as the benefit to the patients, pharmacies need to understand the impact the service offering has on their income and costs.  Some service offerings can lead to an increase in overall customers, having a positive impact on dispensary income.

BLG Business Advisers work with many pharmacy clients, most who have been with us for a long time. We have a strong understanding of the pharmacy industry and provide real support for our clients to improve their businesses.

Find out about additional opportunities for your pharmacy today. Get in touch with our BLG team online or call (02) 4229 2211 to organise an appointment.

*Information was correct at time of publishing and may be subject to change*
Written by Peter Ryan . April 01, 2018

Categories

Covid-19 Resource Centre

Keep up to date with the Coronavirus.

Covid-Resource-Centre
Access Resource Centre

Are you ready to speak to a business adviser?

Let us show you how we can help.

If you’re more of a talker we’d love to chat, call us on 02 4229 2211

Talk with us

mail (1)

Get business advice that helps you, no matter what stage of business you’re in.

Yes, an email that matters!