How To Start Online Pharmacy Store | E-pharmacy Business Plan
Is it annoying to stand in a long line at a conventional pharmacy to buy a few medications?
Besides the fact that it is time-consuming and boring, it leads to customer dissatisfaction when the medicine is low in stock.
Herein lies the opportunity of online pharmacies. Online pharmacy store aka distance-selling pharmacy is the need of the hour which is one of the most unexplored businesses to date.
Setting up an online pharmacy store not only helps you to expand your business horizons and impact sales positively. It also gives you an immense sense of satisfaction to help people lead a better and healthier life. The main idea behind the e-pharmacy business plan revolves around offering a wide range of medicines and OTC drugs, delivering the purchased items on time to patients, and helping them improvise their current lifestyle with more convenience.
This blog post focuses on how to open an online pharmacy, what are the key essentials needed and other supporting factors needed to embrace this change from conventional to digitized store. So, let’s deep dive to understand the various aspects and facts.
Why E-Commerce Pharmacy or E-Pharmacy?
Online shopping of electronics, groceries, food and jewelry is already hyped and with COVID -19 hitting the world so hard, it has become a necessity for many. Consumers are in constant fear of getting infected with the virus which gives a boom to the eCommerce pharmacy.
As per the latest report, the global online pharmacy market revenue is expected to grow at a CAGR of 20% from 2019 to 2025. Starting an online pharmacy is a great way to help consumers maintain social distancing by supplying them with prescribed medicines at their doorstep.
Setting up an online pharmacy is the need of the hour. It will not only impact positively on your revenue, but also boost your business to a great extent.
Online Pharmacy Business – Bridging The Gap In Global Healthcare
Online pharmacy business plans will benefit the consumer in manifold ways. So, if you’re thinking about how to start an online medical business, the below advantages will surely clear the air in your mind.
- Online pharmacy acts as a convenient medium especially for old age people, working professionals, and the physically challenged due to unavailability to visit the medical shop.
- The e-pharmacy business plan saves you ample time and effort.
- e-pharmacy is quite cost-efficient since no third party is involved as medicines come directly from manufacturers.
- Easy and secured payment through digital cash (debit card, credit card, and more)
- A systematic record of all transactions available during tax calculations.
- Since e-pharmacy has an extensive range of choices compared to traditional ones, it offers a huge variety of options to choose from.
- Contactless doorstep delivery is the biggest support in the times of COVID-19.
Did You Know That More Than $370 Million Is Spent On Prescription Drugs Each Year In The World?
Yes, it’s correct. And most importantly, an online pharmacy business plan does not need a well-qualified doctor or a registered pharmacist. They need employees to deliver medicines on platforms which is again creating an employment opportunity.
Pharmacy Business Model – How To Start An Online Medical Business
Thinking about how to open an online pharmacy? Before getting into website development, it’s important to understand all the e-pharmacy business models to choose the best for you.
1. Individual store
In this setup, the customers can upload the description shared by the doctor and can place the orders online. The retailers further check the availability of the medicine and deliver it to the customers. The delivery is contactless and can have multiple payment modes i.e Cash on Delivery, Debit/Credit cards, or through another digital medium.
2. Direct to consumer
In this model, the pharmacist manufactures the medicines itself and sells the products directly through its own channel.
So, when a customer requests for the product, the manufacturer checks out whether the medicine is in their manufacturing stock or not. If yes, they deliver the drugs and collect the payment.
How To Set Up An Online Pharmacy business?
Below are the simple steps to get started with your online pharmacy.
1. Select The Appropriate Platform To Use
One of the basic steps to set up your online pharmacy is to choose a development platform that befits your requirements. Today, innumerable eCommerce platforms are available to start an online business be it a standalone or an aggregator. Platforms like Magento, PrestaShop, Shopify are a few of the leading and successful platforms to create an online store.
You can even build an online pharmacy based on the Laravel platform for quick development and easy customization. If you choose Laravel, you can boost the development speed by 80%.
2. Web Hosting
Web hosting is one of the most important steps to let your eCommerce pharmacy site get access to the entire world.
If your website is huge, dedicated web hosting is the most viable option to choose since the eCommerce website consumes a large amount of disk space and bandwidth. If you choose shared hosting, the web traffic may slow down the loading speed of the website which is why it is recommended to choose dedicated hosting for a larger website.
3. Create A Customer Support
Customer service is an integral part of your business since it adds value and aids your customer with quick responses. As the technology reshapes the conventional mode of business, adding AI and Chat bots as a part of the customer service will not only increase your customer satisfaction but will reduce manual intervention and thus provide quick responses. Implementing AI will reduce human intervention to a great extent. This saved time can be used to uplift business sales.
Starting An Online Pharmacy – Basic Features & Functionalities
An online pharmacy, at the end of the day, is a commercial enterprise. That means it must have all the features that are common to the business.
The following features are the ones that are unique to online pharmacies.
- Display clearly your must-have certifications Firstly, you must build trust about your legitimacy. On your website, display all affiliations and licenses clearly so that first-time visitors can easily find them. For online pharmacies it’s important to build trust
- Show complete product information Display as much information as is required and advisable. Customers, present and potential, should be able to spot products easily. Highlight all that information that is statutorily required as well as information you, as a pharmacist, believes should be shared with consumers of medical formulations.
- Carry a customer credentials section Customers base many decisions on genuine reviews. Place the reviews so newcomers can check out what kind of service you are offering. Just as anywhere else, online pharmacies too benefit from positive customer feedback
- Instill trust by safe payment features Customers must feel completely safe when they may payments. Show prominently how your payment gateway is superior in terms of ease and safety.
- Consider having an app An online store can be wonderfully complemented by an app. Customers will find an app a lot easier to buy from. At some stage you’ll want an app, so why not earlier than later?
- Highlight events Part promotional, part social responsibility. You can have a section or run a banner dedicated to health-related events or articles. This can include schedules of vaccinations, notifications of flu in a particular area and so on. Online pharmacies are a good platform to advertise products
- Respect privacy Your customers buy online because they want convenience. A number of them also seek privacy while buying from you. Make sure your systems are geared towards ensuring the privacy of your customers. This is not only ethically appropriate, but also legally required. Customer privacy is both important and legally required
- Act responsibly and ethically Respect the law of the land. Take every reasonable precaution that you’d take if you were a physical store.
- Offer to stay connected An online pharmacy can offer newsletters for better engagements. In return, it will connect email addresses to build a mailing list. Build a mailing list by offering newsletters
Now that you’ve understood the prerequisites and the features of an online pharmacy, it’s time for a step-by-step guide for building an online pharmacy. This guide will help you understand the steps, and the sequence required when you are setting up an online pharmacy.
1. Understand the Laws Governing Online Pharmacies
Owing to all these complexities, various countries already have in place laws and guidelines intended to regulate the sales of pharmaceutical products. However, they are almost exclusively focused on physical stores and not on online pharmacies. Hence, there are many grey areas in the laws of some countries. This makes setting up and running an online pharmacy a challenge.
With all this in mind, let’s take a look at the general laws governing online pharmacy stores.
- There must be a registered, licensed pharmacist at the head.
- The pharmacist’s license must be valid in the territory from which online pharmacy sells and the territory to which the medicines are dispatched.
- A registered, licensed pharmacist must be in charge and oversee operations, including verifying prescriptions, storing requirements and approving of the purchase.
- The pharmacy must source drugs only from legally recognized suppliers or manufacturers. Carrying or selling counterfeit drugs is a serious offense. Recognition from various organizations boosts an online pharmacy’s reputation
- Depending upon the country you operate in, the local drug regulating agency (e.g. the FDA in the USA) may have put up a list of restricted items that cannot be sold without an in-person examination.
- The online pharmacy store must exercise the same caution as a physical store while selling prescription drugs to refrain from charges of malpractices or extreme negligence.
- In all likelihood, your premises will have to be approved of by the local statutory body before you make the first sale.
2. Select and Secure Your Brand Name and the Domain Name
This is one thing you’ll want to do as early as you can. If you’ve selected a proprietary or a partnership structure for your business, you’ll need to separately register your brand name (for LLC and incorporated firms, this happens by default when you register your business). What’s important is whether a domain name is available with the desired extension; most likely you’ll want a dot com.
3. Decide the Structure of Your Business and Get Licenses
If you are a registered pharmacist, great! If you aren’t, you’ll need to bring in one. The pharmacist may be a paid employee, a business partner or a board member. Check out the laws prevalent laws in the country you will be operating from, to see if there are any restrictions regarding this.
Next, you’ll be fixing the legal structure of your business of your online pharmacy store. You may structure your business as a single-owner proprietor, a partnership firm, an LLC or an incorporated organization. The complexity of the paperwork varies from country to country. Depending on the structure you choose and the laws of the country you plan to operate out of, you may be able to handle the application process yourself or may need the help of an agency.
Being a sole-proprietor is not considered a safe way of doing business because all the liabilities of the business also become the personal liability of the proprietor. An LLC or an incorporated company, on the other hand, acknowledges that the board members and the company are two distinct entities. That means the liabilities of the company are not considered to be the personal liabilities of the business promoters.
Finally, go through the process of getting appropriate permits and licenses. You’ll be required to satisfy most requirements that exist for pharmacies with the physical presence. Additionally, the licensing authority will want to ascertain you have established the right checks and balance for verifying the authenticity of prescriptions.
4. Choose the Right Platform for Online Pharmacy Store
Once you have understood the regulations, it’s time to better grasp the features various technology platforms offer.
Broadly, there are two types of technology platforms for eCommerce: Open source and Hosted (Closed source) platforms. Here is a brief comparison of the two. (For a detailed comparison between Magento and Shopify you may want to refer to our post-Magento vs Shopify: What should you choose?)
- Most versions are free of cost or freemium.
- Great flexibility available
- You take care of the domain registration and hosting
- Customer support not available for the free of cost models
- Shopping carts are not always included
- Strong independent community of users and developers can help you in countless ways
- Examples include Magento, X-Cart, Drupal, and OpenCart
5. Identify Suppliers and Delivery Partners
Since your online pharmacy store will sell sensitive products – medicated formulations, health supplements, OTC drugs – it’s extremely critical you select your suppliers and other partners responsibly.
Logistics is critical to an online pharmacy’s success
There is always a huge risk that your supplier may supply you poor quality substitutes, spurious drugs, drugs not stored as per required instructions, drugs manufactured by manufacturers with poor quality control or drugs that are well past their expiry date. It is strongly recommended you take a lot of care and invest a lot of efforts in identifying only recognized and reliable suppliers. For bulk quantities, you may be able to strike a good deal with the manufacturers themselves.
If your business model is one where local pharmacy stores will directly supply the drugs to customers based on your instructions, you need to be sure they will be following the standard operating guidelines expected. Drugs and medical formulations being highly perishable items, your delivery partners must follow best practices in a storage of products.
6. Establish the Workflow and Systems for Your Online Pharmacy Store
One challenge that online pharmacies need to overcome is the way they will handle a prescription and verify its authenticity. For instance, in the USA the National Association of Boards of Pharmacy has come up with a program called Verified Internet Pharmacy Practice Sites. It approves of, among other things, authentication and security procedures, and quality assurance policies. If you’re in the US, you’ll want to have this certification. Outside of the US, you’ll need to do a little homework to find how you will be able to authenticate various processes.
While dispensing out medicines, you’ll need a strong system in place to make sure there are no errors. You can consider products for pharmacy automation: they increase efficiency and let your team more time to focus on promotional or customer-centered activities or on the CRM. For instance, you can use automated dispensing machines, like the ones offered by Scritpro, Kirby Lester or Parata.
Another important component in your workflow is counter-checks. Are your technicians checking all the information regarding the drug before preparing it for dispatch? You can build this small check inside your pharmacy software. For instance, you have a list of checkboxes that your technician must check individually, to show all steps are being followed. Alternatively, you can keep certain features in the off mode as the default stage. As the technician follows each of the steps, these features get ‘unlocked’. This way you know nothing has been omitted. Of course, the chief pharmacist may have the master access to skip some steps that the technician has already checked and/or are not vital.
Finally, you’ll need to establish proper systems for storing and returning drugs that have passed their expiry date. Make sure you comply with all regulations and follow the right procedures.
Setting Up An Online Pharmacy – Cost Factors To Evaluate!
The next obvious question in your mind is: How much does it cost to build an online pharmacy store?
Just like any other website, the cost of starting an online pharmacy depends on innumerable factors. Some of the major factors are as below:
1. Development platform: Web, mobile or both
2. Website design and admin panel
3. Features and functionalities.
4. Customization and integration with third-party tools and API.
5. Tech stack – Native or cross-platform
6. Hiring dedicated developers or Development team ( designer, developer, Project manager, QA)
7. Implementation of advanced technologies like AI, Machine learning, VR, and more.
8. The location of the online pharmacy store developer also matters. For eg: If the developers are in the USA, they charge more than Indian developers.
But, How Much Building A Website For An Online Pharmacy Business Would Cost?
To give you an estimated figure, the minimum cost to build an online pharmacy website should be between $10,000-$50,000 with basic features and functionalities. The exact quote shall be given once the exact requirement is known.
Setting up an online pharmacy store is not that difficult if provided with the right information and planning that can help you through the eCommerce store design and development. We have been specializing in online pharmacy website development for a long time and we simply love helping people! Get in touch and find out how we can help you!