Wholesale Pharmacy Business Model Explained in Detail

June 22, 2023

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When it comes to the pharmacy business, there are various business models which you can choose to start your business. The first and the most convenient one is D2C (Direct to Customer), wherein a pharmacist/chemist sells the medicines and OTC (Over the Counter) products directly to customers.

The second and greatest business in the healthcare industry is the wholesale pharmacy business. In this segment, the wholesaler plays the role of mediator between a pharma company/store and its customers. To give you a quick and simple example, A Wholesaler sells the medicine to different community pharmacies and hospital pharmacies, which later on can be sold directly to customers by the community and hospital pharmacies.

The major difference between the retailer and wholesaler is that the wholesaler deals in bulk quantities, whereas the retailer manages small quantities.

This was the brief information regarding the wholesale pharmacy business; however, the next question for many entrepreneurs or existing owners would be the setup.

How would you set up a wholesale pharmacy business?

To set up a wholesale pharmacy business, you need to undergo and follow some regulatory steps.

  • An individual who has a degree/diploma in the pharma sector and shares a relevant experience of atleast a year can opt for the license of the wholesale pharmacy business.
  • You will need to have a GST number to register your business.
  • You have to get a legal license from the authority of CDSCO.
  • You will also need to fill out some details, such as.
  • The application form should be filled in the explained format.
  • You will need to attach a cover letter.
  • You will need to have a receipt of the deposited fee.
  • You will need to have a plan of action.
  • You will need to have a site plan and the certificate of a business premise.
  • Details of owner and proof of ownership.
  • You must have a partnership deed, incorporation certificate, etc
  • Proof of a registered pharmacist who will be dealing with the work.

You will have to follow and maintain the regulatory guidelines per the standards as CDSCO keeps an eye on every wholesale pharmacy business.

You will also have to ensure that the premise should be closed, secure and safe with proper air conditioning, shelves, refrigerators, etc.

When setting up any business, you will need to have great connections for collaborations and tie-ups. Profitability comes when you do the right collaborations and maintain good relations. And when it comes to collaboration, you can connect with hospitals and clinics, wherein you can provide them with scheduled and non-scheduled drugs.

Now there, don’t get confused; the major difference between scheduled and non-scheduled drugs is that the scheduled drugs are under price control, whereas non-scheduled drugs are not under price control. When it comes to non-scheduled drugs, NPPA (National Pharmaceutical Pricing Authority) doesn't manage the prices of those drugs; however, they can monitor and take corrective measures to fix the prices of such products.

Furthermore, you can also choose to sell bulk medicines and products to different store owners. You can connect and collaborate with them for their stock fulfillment.

Now, Is this business model profitable? Yes, it is profitable. A roundabout of 6-10% margin is generated on branded medicines, and for generic medicines, it goes about 8-15%, so yes, the wholesale pharmacy business has a good profit margin for the stockist.

Once your business has picked its pace, you can go for an online solution. You can go for an Online Pharmacy App Development that allows you to manage your inventory, clients, and stores through one single app. We are leading a pharma app development company that provides pharmacy delivery solutions as per different business models. If you want to start your online D2B/ B2B store, then you are going in the right direction, and we can help you lead the way. You can contact us for your requirements, and we will get back to you with an effective solution.

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Hi, I am Sagar Trivedi, A business consultant at pharma coders. I help, support and guide business owners to lead towards success.

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