Super Easy Way to Start Pharmacy Business in Pakistan!

Starting any business requires a great deal of effort, information, practical know-how and the same is the case with pharmacy business, you will need to consider many aspects before, during and after launching your business and this is what this article is about!


Pharmacy Business in Pakistan
In this not so boring article you will learn:
  1. Different pharmacy business models types, minimum-maximum initial investment required and return on that investment (ROI).
  2. I will be explaining pros & cons of each business model type and how can you increase ROI in each business types, plus I will also talk about important aspects of each business model type, aspects that are crucial to success of a given business model type.
  3. I will also show how you can launch and manage each business model type in a practical, efficient & effective manner, mentioning approximate resources using educated guess and my personal experience.
  4. I will also share how to fulfill legal requirements required by drug authority in Pakistan, to start a pharmacy business in Pakistan.

In a nutshell, by reading this article carefully with eyes popped out ;p, you will not only learn about the options that are available to you to invest in pharmacy business but will also gain good idea about resources needed and how much you are gonna make in profits by investing in a particular idea.

Not only that, you will also learn “no BS, NO beating around the bush, No boring theory” ;p but practical, actionable approach on how to launch and maintain a pharmacy business in Pakistan.

Okay now let’s get to it!

Well when it comes to starting business in Pakistan, the most profitable business in my opinion is that of medicine.

Note: If you are searching for more super cools business ideas then you must read this one too 30 Business Ideas for Pakistani Market with incredible ROI

From meeting with hundreds of retailers, wholesalers, distributors in medicine field I learned one thing that is, there is tremendous amount of return on investment (ROI).

Consider the following table:

Business Model Type
Initial Investment (in minimum to maximum range)
ROI (min-max range)
Retail Pharmacy
5 Lakh-25 Lakh
25-75%
Wholesale Medicine
5 Lakh-1 Caror
4-10%
Distributor Medicine
5 Lakh-3 Caror
7-15%

Retail Pharmacy Business

As you can see, return on investment is superb in retail pharmacy business, but the problem here is, your sales are usually not that immense and so even though you get great return on investment still you don’t make that much in profits.

Sales in medicine retail business depends on the following things:

  1. Location: If location is good, like somewhere around a hospital then sales will be immense and so return on investment will be awesome!
  2.  Discounts: If you offer discounts that most of your competitors don’t then in the long run (1-4 years) word of mouth marketing will help your business and so you will see a steady increase in sales in the long run.
  3.  Variety: Your sales will increase if you have great product variety. So don’t even think about making some good money by just having flagyl, disprin, calpol on the shelf ;p. You need more than that!
  4.  Relationship with doctors: How about having few doctors that write a prescription that is only available with you (winks!) that is what most of these pharmacies do, giving a certain percentage of their sales to doctors and these “Qasabs” ops! I mean doctors write prescriptions that are available only with them.

Okay, when I mentioned the initial investment as 5 lakh, that doesn't mean, it is something you must have, you can start even with lesser amount but that depends on one thing, how smart you are when it comes to business, investments and all that.

If you are some genius, you will know how to manage things like having easy credit terms with your suppliers, thus buying on credit, making some deal with the guy whom property you have rented, convincing him that you will pay half rent for the time being or full rent after a certain date.

Being able to do multitasking can also cut down the initial investment cost, like managing store inventory, managing customers and managing your outlet accounts & finance and being able to make a good hot cup of “chai or coffee” when multi tasking takes its toll ;p.

The bottom line is, some people can start a medicine retail business in 5 lakh or even lesser while others (stupid people ;p) can’t start it even with 25 lakh, in other words business acumen matters a lot!

Starting & Managing Retail Pharmacy Business

First you will need a good computer software that can keep record of your outlet overall financial transactions, dealings, accounts, sales, profits, expenses, net profits, growth etc.

You can find such software by simply meeting with a medicine retailer who is using such a software and asking them where did they get it.

Second, you will need (at least) one guy to manage customers, like I said you can do that on your own if you are good in multi tasking and one guy to manage sales, accounts, that computer software.

If you are good at multi tasking, you can start with you and one more guy, both of you should be more than enough!

You will need to pay that guy at least 8 thousand pkr per month or more to keep him working for you.

Third, you will need to pay rent, utility bills etc, so if you are one smart guy, you can convince the other party, which in this case would be your landlord to give you free electricity, water or charge you nominally for all of that, that will save you from having your own electric meter, saving you good amount of money.

And if you are really smart, it is likely that you will convince your landlord to pay him nothing or half a rent for certain amount of time, again saving substantial amount of money.

Fourth, you will need to have a good credit policy with your drug suppliers, making sure that you can achieve the required sales in the amount of time, relaxation given to you by your drugs suppliers!

Now, I know many readers of this article would be novices with no idea on how to run business, how manage the whole business thing, from its finances to its human resources to that dreadful marketing!

Well, don’t worry ;) I have a super fix, that will make you a super genius in running any type of business with ease and efficiency you can’t imagine!, read this in-depth article I want to start a business but I have fears! which will teach you practically how to manage the whole business thingy, covering all of its aspects (finance, marketing, human resource) efficiently & effectively.

Okay now let’s talk about the second medicine business model.

Wholesale Medicine Business

Here ROI is way less than Retail pharmacy but still, you can earn far more than retail because here sales exceeds sales of retail pharmacy by quite a great margin.

Here you sell, supply to retail pharmacies all over, though it takes time to really start earning some serious money in wholesale, if you already have relationships in the market, been working in the market for like few years, then the ROI in wholesale will be immediate but if you are totally novice or new to this whole wholesale thingy then it will take around 1-2 years to get some serious return on investment.

Higher ROI or Increase in Sales in wholesale can be achieved by:

  1. Relationships with target retailers: you will need to make rich, win win relationships with your target retailers, that could well take time, from months to several years, depending on how good you are at it. The more relationships you have, the more opportunities you will have to make sales thus higher return on investment.
  2.  More Investment=More ROI: The more you invest in your wholesale business the more you will be able to earn, now by the more investment I don’t mean buying xyz, local drug companies products, though such products do offer far greater ROI but most of the time such products have very small, tight niche and thus you can’t make much of sales unless you have retailers from all over the region.
  3. So what I mean by More Investment=More ROI is, to invest in multinational drug companies products, the more you have of those companies, the more you will be able to sell and thus higher ROI, as we all know multinational drug brands tend to have healthy market demand and thus the potential for higher return on investment is substantial.
  4. Location of your wholesale outlet: if you really want to earn some serious money then try to get your wholesale business started in some place that is well known as a hub for wholesale drug business, this is something really important, as then you won’t have to worry about getting clients as location is well known.

All you will need is to setup a cool outlet with some impressive, creative advertising, marketing strategy like having a different outlet mark, exterior, billboard then the rest of the market, do something that makes your wholesale outlet stand out from the crowd, be careful that “something” shouldn’t be something that harms your brand image.

Make sure that you have optimum product variety because once a party comes to you to buy and you haven’t it, it is such a turnoff to be honest and most of such clients won’t come to you for months later on.

Second make sure you know what price to quote to your target clients, what your competitors are quoting to them, what else they are offering to them, what credit policies they have etc etc all of this plays in the equation of getting higher return on your investment, so make sure you get all of these things right.

In case you don’t know, I will suggest that before you go for investing, spend at least 3-6 months with someone that is running such a business model type successfully, learn from them and then decide.

This way you will learn most of the tricks of the trade along with almost the whole trade itself, making you smart enough to avoid mistakes, errors that can harm your business seriously!

Starting & Managing Wholesale Medicine Business

Well, there is a legal aspect to drugs business, which I thought I would mention in the end of this article, but I think that won’t be wise, there are certain, specific legal requirements that you have to fulfill if you want to start a drug business in Pakistan, be it retail, wholesale, distribution.

So once you read this article, check this article by PCDA (click on this) that mentions legal requirements you need to fulfill to start a drug business in Pakistan. You will also learn from this article how to fulfill these legal requirements.

And if that above link is broken then check this link for legal requirements.

You will have to fulfill those legal requirements if you want to start drug business in Pakistan.

Okay now let’s get back to starting and managing wholesale Medicine Business.

First you will need, is a computer software, just like one you need in retail pharmacy business to keep record of your finances, accounts, sales etc.

Second you will need at least one guy to manage clients and you or one more guy to supervise while one to get supplies from your suppliers, warehouse and one to manage warehouse.

You can cut down the need for having a warehouse manager by having warehouse somewhere near, around your wholesale outlet.

Third you will need a vehicle to get supplies from suppliers, from warehouse to your wholesale outlet, for that again you will need a driver, again if warehouse is near, around your wholesale outlet, you won’t probably need a driver then.

Fourth you will have to give full time, focus to your wholesale business (even to your retail business too!), you won’t be able to relax much if you want your business grow, though you can hire a trust worthy guy that act on your behalf in your absence, but then that would mean increasing the operating cost of your business further.

Fifth you will need to pay utility bills, rent etc on monthly basis along with salaries to the guys you hired, this will be around 20-50 thousand Pkr per month or more depending your operating expenses and other variables involved.

Sixth you will also need to deal with pesky drug inspectors who at times would want you to bribe them because that's the ugly business culture of Pakistan, so make sure you know what drug business mistakes can make you an easy target for drug inspectors and how to avoid them.

Seventh, there will be clients who won’t pay you on time or would want you to just forget about your money, so you need to be really careful in initial days of your business in making deals with your clients that you can afford in case things go awry!

Once you gain experience, knowledge about market, clients, you will know how to deal with such specific clients.

Medicine Distribution Business

Here ROI is always slightly greater (in percentage) than wholesale due to the fact that you act as a company distributor, that slight difference in percentage actually results in far more profit, ROI than wholesale, retail medicine business.

Again here sales volume matter, sales volume in distribution business is fairly large than that of wholes simply because you are the company sole authorized distributor in a given region and so you alone can sell the company products in that region, that kind of gives you a monopoly in the market.

Distribution also gives you reasonable leverage in sales, as being sole distributors you don’t need to worry about the clients, your sales are always healthy unless you are distributing products of a local, newly started drug company or brand, as such brands have very small niches with not much growth potential.

That is why I stated the initial investment cost of distribution being equal to that of wholesale, you can get a local, newly started drug company distribution easily with that much amount, buying certain percentage on cash and certain percentage on credit and voila you become a distributor!

The real money in medicine distribution lies in the philosophy of investing huge amount of money in a multinational brand, thus acquiring their distribution and making huge gains in terms of ROI.

Things that matter in having a successful drug distribution business are:


Location: Although location carries same importance as in case of wholesale and retail medicine business but if you are a sole distributor of a multinational brand, with healthy market demand, in a given region then location doesn’t really matter.

Although it is wise to have your outlet location at such a place which is easily accessible and since you will be the sole dealer, the clients will come anyway.

But such distributions are hard to achieve as they demand hell of a money to be invested in.

Relationship with Company, Wholesalers, Retailers: Relationships plays a vital role too, especially when you are having distribution of a company that isn’t that well known, having low product demand, in that case you will need rich, beneficial relationships with your target clients to get the job done, to get that healthy ROI.

Read this interesting article on how to develop & manage business relationships.

Relationship with your supplier, brand you are having distribution rights for, is also key, having healthy relationships will get you far more flexible credit policy from the company and at times will result in special discounts, other perks that you may haven’t have if such relationships weren’t there. 

Annoying Distributors, Wholesalers, Retailers: yes they do exist, world is full of them and they will make you hate your life!

Distributors become annoying when they start selling products to your target clients, in your region, to which only you are supposed to have sole right.

Wholesalers, retailers become annoying when they start to dealing with other region distributors instead of you, this is something that can hurt your ROI.

The good thing is if your company really cares about her distributors, she won’t allow such things to happen but again its Pakistan and most of the time its not the case, trust me!

So you need to be really vigilant about this, at times you won’t be able to completely stop it but you can minimize the damage by talking to the company in a language that she understand.

Such situations are more common in local Pakistani drug manufacturing companies compared to multinational brands.

Make sure before going for distribution, the distribution contract document account for such violations, damages and bound the company and its distributor to not violate such terms and conditions.

That means thoroughly reading and understanding the distribution contract document of the company before signing on it!

The company may also provide special benefits, perks to certain distributors, make sure you know the reasons behind such actions and if such reasons are “justified reasons”.

Starting & Managing Medicine Distribution Business

Like I said in the beginning it requires huge investment unless you want to get your entrepreneurial career launched with mediocre local company based in Pakistan.

You will need the following things:


1.      Computer software + a reliable heavy duty computer to keep record of your financial dealings with your company, your wholesalers, retailers, your overall sales, growth, accounts, inventory, supplies etc

2.      At least one (and maximum 3 or more depending on your needs) vehicles to make supplies to your clients and at times to pick supplies from your company (also warehouse) when they can’t manage it, it happens quite a lot in case of local companies especially newly started ones.

3.      One guy to manage finance, accounts, one to manage to human resource that you hired like client dealers, territory managers, territory suppliers, drivers, warehouse manager , marketing staff (in rare cases) etc.

4.      You will need to make up for fuel expenses, salaries, utility bills, rents, operational costs, expenses, food or mess expenses etc, so make sure either you have a capable guy that manages all these expenses or you have to learn how to manage the whole thing effectively.

That’s it!

Janay se pehlay ek piyar bhari baat zoror suneyay! Allah apka bhala kry ga 😄 and that "Piyar bhari baat" is as follow!

My dear, as you have read, I provided practical, actionable insights on how to start and manage pharmacy business in Pakistan, if you want more such practical and detailed stuff like that, that you can utilize in your day to day business activities then subscribe to this cute little not so boring website of mine 😉

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Over to you guys, any questions, do let me know!

About Publisher Arshad Amin

Certified SEO Professional, Small Business, Start-up, Marketing Expert with ton's of practical, actionable ideas, insights to share, Proud Founder and Owner of www.easymarketinga2z.com and www.topexpertsa2z.com

10 comments

  1. kindly tell me all information about retail pharmacy....
    precautions...investment....requirements....licence....and details if we make contract with well known pharmacy just like mehmood or clinix etc

    ReplyDelete
    Replies
    1. Hi there, glad you asked me about that.

      Now let me give you a little explanation regarding your question

      When it comes to precautions in pharmacy, you need to keep certain things in mind:

      1. to be well aware of your whole pharmacy stock details, accounting & managment methods
      2. to be well aware of any legal requirements pertaining different aspects of the business, that includes but not limited to licensing, legit medicine with verified registration number, expiry etc
      3. to be well aware of market pricing of a given medicine that you are offering at your outlet so that your suppliers don't overcharge or give you fake items for lower price.
      4. to be well aware of any and all illegal practices that may put you and your business in legal hot waters.
      5. to be well aware of the risks you would carry when it comes to partnerships, contracts.
      6. to be well aware of not investing in just one medicine brand rather to diversify your investment so you and your business can survive incase of some trouble with that particular brand, now this doesn't mean to invest in every available medicine brand rather to consider the demand, competition, brand policies etc of a given brand in your region.

      Coming to investment, you can start from as little as 5 lac plus credit of 5 lac but that depends on your experience, relation with your suppliers, their payments, credit policies etc, although my suggestion would be to start from half of the investment of the total investment capacity you have so that you can not only see where it will go in the future, to test your business, your and your sales staff capacity, actual market demand etc.

      Now if you have someone who has spend over five years in the medicine field and you can trust that guy or you hired one to look after your investment and all that and you have spend at least three to six months (which is really important) in the medicine field then do as what seems sound, you can go with your gut feeling.

      For license I have already mentioned link, check that link out.

      Coming to contract part, my personal suggestion would be to either make contract with the help of an expert business lawyer or with the help of someone who has been in the industry for at least 10 years, that will help you in making a contract which will be beneficial to both parties, positively adding more to your side.

      Remember: You must spent at-least 3-6 months in the business with those who are successfully running the business in your area, so that you not only understand what will be required of you in terms of:

      1. investment,
      2. accounting & management,
      3. sales,
      4. relationship with suppliers,
      5. understanding of the brands that will give you maximum return, brands that will not give you maximum return but are necessary to have because of market demand,
      6. legal aspects, requirements etc


      Hope this little info helps, plus I will recommend you to read this article to get a full idea of how to practically and successfully run a business, check http://www.easymarketinga2z.com/2015/10/starting-small-business-i-want-to-start-a-business-but-i-have-fear-of-unknown.html

      Regards

      Arshad Amin

      Sales & Marketing Manager

      Human Care Laboratories

      Delete
  2. i m sorry to disturb you,,, kindly tell me whats better to take licence on rent or get own licence by giving axams,,... and b.pharmacy is required or d.pharmacy..?
    bms778@gmail.com
    03226500922

    ReplyDelete
    Replies
    1. Hi there, good to have you here!

      Kindly check the second link I provided for legal requirements in the article, the first link was broken due to website update, hope that link answers your question, although there are many things required to run pharmacy but having b.pharmacy or d.pharmacy, anyone of these two will do it.

      hope this helps, let me know if you have further questions, cheers!

      Delete
    2. Hello there hope this text finds you in good mood!
      Would you please give me some busines ideas small startups?

      Delete
    3. Hi there, I have already shared over 40 startups ideas, do check them out, in future I will be sharing more.

      Hope this helps, thanks for visiting, don't forget to subscribe!

      Delete
  3. What are the Legal requirements for running Pharmacy?
    D-Pharm Certified can run Pharmacy?
    Thanks

    ReplyDelete
    Replies
    1. Hey there, glad you have that question, actually the link I provided to PCDAPAK.COM has been broken due to link website update, kindly check the following link for legal requirements.

      https://www.scribd.com/document/310578037/How-to-Open-a-Pharmacy-in-Pakistan

      Coming to the second question, yes D-Pharm certified can run pharmacy.

      Hope this helps, good luck with your business and if you have any other problems with regards to your business let me know plus I have shared over 50 business ideas with all essential aspects of each idea covered, so check those out too.

      Have a great day!

      Salam!

      Delete
  4. Salam bro hope you would be fine.My question is about distribution of any multinational med company.suggest mr any good company whom i can approach and what is the procedure.do they hold any security or what are their equirments please tell in detail.Thank you

    ReplyDelete
  5. Hey there if I want to start my own pharmacy but have no knowledge in it how can I learn all about pharmacy and how it works yes I will have a few workers who have specialized in this field but having basic knowledge myself should also be helpful any courses or books?

    ReplyDelete

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