Independent pharmacies have been battling big box drug stores since the 1980s when Walgreens and CVS started dominating the market. With their many convenient locations and lower-cost prescriptions, large retail chains pose a definite threat to small businesses. But there are ways for smart smaller pharmacies to win.
Even though many independent pharmacies have been forced to shut their doors, others have been able to hold their own. According to the National Community Pharmacist Association, the numbers are looking up:
• Independent pharmacy is an $88.8 billion marketplace.
• Independent pharmacy prescription sales total $81.7 billion.
• Independents dispense 1.42 billion prescriptions annually.
• Average independent pharmacy sales equal $3.89 million.
• Average prescription sales are $3.59 million.
• Average number of prescriptions per pharmacy total 62,424 annually. That works out to be about 200 per day prescriptions filled per day.
Becoming a profitable pharmacy is hard work, but having a personal touch seems to be key. In order to compete with the big brands, your store needs to stand out in some way, and the easiest way to do that is through offering excellent customer service.
Know your customers and their health
An independent pharmacy could have more opportunities to offer personalized customer care than a big box store. Since large retail pharmacies may be more concerned with prescription volume and cutting staffing costs, independent pharmacies can shine in this area. Take a personal interest in your customers, know their name and their health issues so you can give them a better understanding of their situation. By showing your customers you care, you will in turn have a devoted customer base.
Offer unique products & services
In addition to offering the standard prescription medications, find ways to make your retail merchandise different. Aaron Pietrykowski of Aaron’s Apothecary in Chicago, Illinois carries boutique products, luxury skin care and designer brand makeup. He told the Chicago Tribune, “We try to sell higher-margin goods in the front of the store, and that’s a big part of our business.” He also rents breast pumps, carries homeopathic products and product lines not offered anywhere else in the Midwest. “We try to find little niches that are lucrative to offset the margin in the pharmacy,” said Pietrykowski.
Join a Co-Op
Co-ops give independent pharmacies the ability to buy prescriptions in bulk, which is one way to cut costs. Independent Pharmacy Alliance is one such buying cooperative and represents over 3000 independent pharmacies in New Jersey, New York, Connecticut and Pennsylvania. Not only does its members receive combined purchasing power, but they have opportunities for continuing education and comprehensive legislative advocacy.
Train your staff to sell
Training your staff is one of your biggest areas of potential growth. They must engage customers and steer them toward your most profitable items. The Pareto Principle which states that roughly 80% of the effects come from 20% of the causes comes into play. So, your staff should know this 80/20 rule. Are 20% of your customers 80% of your business? Is 20% of your merchandise 80% of your sales? It’s important to train your staff on these areas so they know where to concentrate their efforts.
Find yourself ready to take on the big box stores? Check out our US drug store and pharmacy listings.