Given the hours, the pressures, and the financial stresses of running an independent pharmacy, it might seem far-fetched to hear the opinion that store owners are “sitting on a goldmine.” Admittedly, the notion of striking it rich in the pharmacy business may be overstated, but the idea of tapping into underutilized or even undiscovered revenue streams at the OTC level is definitely worth exploring.
Step right up.
Here at Benzer Pharmacy, just like our independent counterparts, we know what it’s like to face competition from the giants in the field. Same as those who mine similar territory to the big-box retailers, we’ve seen what diminishing margins on prescriptions and other high-volume products can do to the bottom line. The difference is we’ve found ways to compensate for the shortfall on that end by renewing our focus on the front-end.
For starters, it’s widely accepted that you’re going to get higher profit margins out of your OTC or other front-end offerings than you will by any means available to you behind the counter. That means using the available physical retail space in your store to its best advantage, stocking a mix of products that can turn every corner into a profit center.
That’s where the “goldmine” part comes in.
That said, here are our suggestions for independent pharmacy business owners looking to dig in and get more out of the OTC category:
• Evaluate the lay of the land.
Times change, and as they do, so should the layout of your pharmacy. It’s not always easy to determine just how much space you need for any particular sales category, like say, health and beauty products, for example. But, working up a sensible calculation of what your store needs to produce in terms of sales per square foot is the right starting point. Adjust counter space accordingly for the highest performing product mix.
• Let every “X” mark the spot.
It takes hardly any time at all for a customer to turn around and leave if they can’t find what they came for. But perhaps even more distressingly, it’s far worse when staff members themselves have trouble connecting the dots between two related products—stocked on different ends of the store. Clear, easy-to-read signage is essential for maintaining quality merchandising practices and positive user experiences.
• Boldly go where you haven’t gone.
Some of the highest-margin performing products exist well outside the traditional “ comfort zone” for independent pharmacies. Think about expanding offerings in areas like pediatric OTCs, pregnancy care products, fitness and weight loss specialty items, and nutraceuticals and probiotics, as well as sleep aids and energy supplements. Each of those categories promises substantial return-on-investment.
• Make it a “pet” project.
It’s no secret that people adore their pets beyond description, but few of them enjoy bouncing from one store to the next for specialty products and high-end brands. If your store has the available floor space, stocking items for those family members on all “fours” only stands to reason. It’s likely that a willing partner in the local veterinarian community can help you determine the best options for your establishment.
At Benzer Pharmacy, we’re committed to helping independent pharmacy owners make ends meet. More often than not, all it takes is setting up a short meeting.
For more information, visit http://franchise.benzerpharmacy.com