Patients likely visit your pharmacy to fill prescriptions, but prescriptions are not your biggest potential source of revenue. While filling prescriptions get people in the door, community pharmacies are experiencing major decreases in prescription profit margins. For some pharmacies, filling prescriptions actually results in a loss.
How can you continue to serve your patients, providing the health care services they need, while increasing your profits? One strategy is to focus on sales of over-the-counter items. In community pharmacies, OTC items tend to have better profit margins and offer a more consistent stream of revenue. Keep reading for valuable tips on boosting OTC sales in your pharmacy.
Challenge: Community pharmacies often lose money on prescriptions
In a typical community pharmacy, about 90% of revenue comes from prescriptions. However, gross margin figures on prescriptions have declined consistently for more than eight years. This drastic decrease in revenue has impacted the overall earnings of community pharmacies, causing some to close their doors for good. Increasing DIR fees and competitive pressure have also put a strain on independent pharmacies.
Solution: Increase OTC sales to recoup losses and increase revenue
Community pharmacies can make up their revenue losses by increasing OTC sales. While the backend of a pharmacy brings patients through the door, the frontend business can drive revenue and keep customers coming back. There are several ways independent pharmacies can boost OTC sales, including nutrient depletion programs, developing an online presence, and offering high-quality products.
Review your POS data
It is important to never assume you know what sells best in your pharmacy. One study found that pharmacists believed diabetes products ranked highly amount their most-shopped OTC items. However, POS data showed that diabetes products ranked much lower than anticipated. This example highlights the importance of turning to your point-of-sale data to make informed decisions on OTC products.
The most popular and most shopped OTC items for your pharmacy will depend on the unique needs and expectations of your community. No two community pharmacies are the same, so you cannot assume that what works for one pharmacy will work for another. Your POS data can provide valuable information on which products sell best in your store and which items bring the greatest profit margins.
Start a nutrient depletion program
Pharmacists can drive OTC revenue by implementing a nutrient depletion program. Train your pharmacists, techs, and staff to recommend appropriate supplements when patients pick up their prescriptions. Supplements tend to have better profit margins, which can boost your OTC revenue. Medication side effects can also discourage patients from adhering to their medication, and nutrient depletion programs can combat drug side effects and improve patient outcomes.
If you do not have the time or resources to start your own nutrient depletion program, TDS has partnered with Amplicare to make the process as simple as possible. Amplicare’s nutrient depletion solution integrates directly with your pharmacy management software and alerts users to appropriate supplements based on a patient’s prescriptions. The solution also syncs with your OTC inventory.
Offer products that are not available at big chains
Patients can purchase vitamins, supplements, and other OTC items from almost any pharmacy or grocery store. Why should they come to you? You can help set your pharmacy’s OTC offerings apart by stocking the best quality OTC products that patients cannot purchase from major chains. This will require some research on your part, but it can be a selling point for your pharmacy.
Learn about the OTC items offered at other pharmacies in your area. Instead of following the competition and stocking all of the same items, look for gaps or niche items that you can provide. From specific brands of supplements to higher quality products, there are many ways you can set your OTC products apart from the crowd.
Sync your online inventory
Did you know that almost 50% of all customers check a retail store’s inventory online before visiting the store? If you are not building an online presence and syncing your OTC inventory, you could be missing out on valuable foot traffic. There are multiple ways to keep your OTC inventory up to date online, including updating your pharmacy website and creating a Pointy page to appear in Google searches.
Pointy from Google integrates directly with Rx30 and Computer-Rx, keeping your inventory updated online. The handheld barcode scanner makes it easy to upload your items to your custom Pointy page, and you can start appearing in local Google searches. By getting your inventory online, you can compete with bigger retailers in your area!
TDS is here to help fulfill the needs of your pharmacy, including prescription and OTC sales. If you want to learn more about how TDS partners like Pointy and Amplicare can help boost your OTC sales, contact us today!