THE INSTOR BLOG

How Much Do Medical or Pharmacy Store Owners Earn in India?

The retail pharmaceutical business is a very lucrative business with the ability to generate a lot of profit. The pharmaceutical market in India is at a CAGR growth of 15% in retail sales throughout the next five years. If you love helping people and have a particular knack for retail, the pharmaceutical retail industry may be right for you. 

This article will cover everything you need to know about the profit margins involved in the pharmacy store business. Also, we will see some of the real responses provided by the business owners so that you get complete clarity.

Pharmacy and Medical Store Business Profit Margin

A medical store/pharmacy makes gross margins of about 20-50 percent selling generic medicines, compared with 16-22 percent selling brand-name medicines. Along with these margins, they also enjoy the scheme’s benefits and other perks the pharmaceutical drug manufacturer provides.

Medicine Wholesale Business Profit Margin

The Distributor margin for branded medicines is approximately 8-12%; the margin for generic medicines is 10-20%. Distributors may enjoy some benefits from the drug companies, including offers and credit facilities. The medicine wholesale business has a good profit margin in the pharmaceutical industry.

A stockist’s margin is approximately 6-10% at branded medicines and 8 to 15 percent at generic medicines. A typical stockist must provide not only up-front payments for inventory but also credit facilities to distributors. They also have fewer chances of scheme/offers provided by the manufacturer.

Carrying and forwarding agents are middlemen whose margins are approximately 4-8%. They receive stock from companies in large quantities and distribute it to the stockiest in small increments.

Don’t just take our word for it. Let’s look at some of the responses provided by the Medical/Pharmacy store owners on Quora.com that we shortlisted.

Question – How much do pharmacy shop owners earn in India?

Vivek Shukla Says:

“The earning of the pharmacy owner depends on the following:

  • Volume of sales
  • Operational costs
  • Inventory management/Understanding the demand

However in a few cases the margins are high but the overall average margin is between 25–30%. Most pharmacies due to competition or in a bid to build customer relationships provide 5–10% discount. If the business was so lucrative everyone would be getting into the pharmaceutical retail business but as it has its share of difficulties.

It would take 6 months to understand the market and how to manage inventory but overall a year or year and a half for the pharmacy to run smoothly.”

Anshul Gupta Says:

Well! my father is a pharmacist and we are in this business for like 30 years.

we have a sale of around 30 to 40k per day and on fortunate days it can go up to 80 to 90k while generic medicine can provide a profit up to 60–70% prescribed drugs and also ethical drugs have a profit range of 20–30% .so if you go by the average sale/day can get income ranging between 3 to 4 lks per month.

but there are various factors that affect this business. some of them are-:

  • Number of drug store in and around a particular area.
  • Number of hospitals near the drug store as it provide vital costumers.
  • Availability of prescription drugs.

All in all its a good business to invest in and can provide stable income. And you can easily increase your business by providing surgical items that are very high in profit also Ayurveda medicine and potential is very broad.

Ragnesh Malik

Medical stores earn tremendous margins. I worked for Abbott healthcare while back for the diabetes division.

The medical store’s margin on these categories of medicines were 26–30% on MRP, and they sell medicine usually on MRP. So they earn Rs 30 for every Rs 100 medicine sold.

For chronic critical disease medicine like cancer etc margins are as high as 70–80%.

Apart from this as local or unknown brands, they keep the margin are between 50–80%.

For promotion purposes even if they offer 10–20% discount then also they are keeping much more in their pockets.

A medical store/pharmacy business is a very promising business in India. If you are looking to make a decent profit, this business is for you. But you need to have proper planning, study the competition, identify the right location to get success in this business.

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