Against big box pharmacies, national chain pharmacies, mail order and other independents, your pharmacy is facing fierce competition everywhere.
To get new patients and grow your pharmacy business, being competitive is essential. Other pharmacies might seem to have innumerable advantages, but your pharmacy not only can compete against them, it can also beat them.
Compete and win with the right tactics. Don’t let your pharmacy fall victim to these common pitfalls that make it difficult to remain competitive.
1. Lack of investment
Competing requires a significant investment of time, money and effort. And if your pharmacy isn’t devoting enough human and financial capital, then it isn’t competing to its fullest.
For example, you can’t compete with the wait times at a pharmacy that has invested in robotic technology if you’re filling all your prescriptions manually. Also, it’s difficult to convince patients that your pharmacy offers the latest and most up-to-date services if your storefront is decades out of style.
Tip: Create a list of investments you’d like to make at your pharmacy. Set goals for how much you want to invest in each project and when you’ll invest it. Keep up with this investing calendar, so an update to your computer systems or storefront won’t be past due or an unexpected expense.
2. Inadequate staffing
If your pharmacy is understaffed and you’re unwilling to hire additional employees, you’re not maximizing your capacity to compete.
Without an adequate staff, your pharmacy can’t compete on a number of factors, including keeping wait times for prescription fills short and providing the clinical services patients are starting to expect. You need staff to expand your service offerings and to give patients the individual, face-to-face time they come to your pharmacy for.
Inadequate staff means you can’t innovate new services or approaches, and the level of customer service and care you offer may be unsustainable.
Tip: Set specific goals for what you want to compete with—and beat—other pharmacies at. Then, determine how many staff members you need to accomplish those goals. If you’re not employing enough of the right people, with the right skills, you could be holding your business back.
3. Space limitations
Cramped front and back ends make it difficult to compete with the product selection and service offerings that more spacious pharmacies can offer.
Without a well-planned layout that includes space to grow, you can’t feature a rotating seasonal front-end display or incorporate in a new clinical service into your pharmacy.
And, without these additional front-end products and clinical services, high-need patients who require a wide array of products and services will turn to pharmacies that can get them everything they need in one stop.
Tip: When selecting a pharmacy space, be sure to plan for room to grow in both your front end and your back end.
Also, look around your pharmacy and see how you can rearrange to maximize the space you have. For example, if a skin care department in your front end is full of slow-moving small-margin products, consider replacing it with a selection of products with a more acute demand, like first aid and wound care.
Or, replace the section with a front-end category that pairs with your clinical specialty, such as diabetes supplementary products to complement your diabetes care services.
4. Poor buying practices
Over-paying for your pharmacy’s inventory can cut into profits, and prohibit you from competing on a key point—price.
Purchasing the “deal of the month” from sales calls might seem like a good way to get a better cost of goods, but it could be hurting your margins in the long run.
Paying more for brand and generic drugs means losing profit, and if your prices become too high to compete, it can mean losing patients, too.
Tip: Check to make sure your main and supplementary wholesalers are providing you with the most competitive pricing available. Consider hiring expert negotiators, like those with ProfitGuard by PBA Health, to leverage your purchasing power through higher volume by joining a group of pharmacies—getting you the best deal possible.
ProfitGuard also provides proprietary purchasing tools that maximize wholesaler rebates and item-by-item savings automatically. ProfitGuard members have averaged between $70,800 and $212,400 in annual savings on their cost of goods.
“It’s the industry game changer for the independent pharmacy owner or operator,” says Huy Duong, owner of Dale’s Pharmacy in Colorado. “There’s nothing out there like it on the market.”
In the case that your primary wholesaler doesn’t have what you need, you’ll need a reliable secondary supplier waiting in the wings.
BuyLine®, an NABP-accredited secondary supplier, offers a full line of brands, generics, OTCs, and controls at the lowest prices in the secondary market. In addition to having low list prices, BuyLine also rewards purchases with cash rebates and significant discounts on brands. Earn up to an additional 10% cash rebate on generics and up to WAC -4% on brand.
With online ordering and next-day shipping options, shopping with BuyLine is quick
5. Minimal service offerings
Keeping your service offerings small might seem like a way to cut overhead costs, but it’s actually crippling your ability to compete with other pharmacies.
When a pharmacy can offer diabetes counseling, flu vaccinations and fill a patient’s prescriptions all in the same visit, your pharmacy has to offer comparable services in order to compete.
Small service offerings might be fueled by shortages of staff or a lack of willingness to invest time and capital into new services. But without the latest services, your pharmacy will be behind on trends toward patient care services and payment streams focused on patient outcomes.
Tip: Offer must-have high-margin services, especially flu vaccinations and diabetes counseling, so your services are up-to-date with what patients expect from their pharmacies.
Learn more about business tools that can help your pharmacy compete at pbahealth.com.
