What is Exclusive Pharma Distributor?
Exclusive Pharma Distributor is a right and privilege accorded an individual, or group of individuals, or a company, to market, promote, distribute and make profit with a pharma product/s exclusively in a given area or territory.
For example, if one becomes an exclusive distributor of Brand A amoxicillin in Region 1 then by virtue of a contract, no one else is allowed to carry and market the same brand in Region 1.
It is similar to franchising except that the suppliers in the exclusive distributorship do not partake in the decision making process of the business and do not require a certain percentage of the gross sales generated by the distributor. In short a distributor has more freedom in the conduct of his business.
Suppliers can only provide training and make suggestions but at the end of the day the distributor is solely responsible for his business.
What includes pharmaceutical products?
Pharmaceutical products includes but not limited to the following:
Drugs and Medicines,
Medical Supplies,
Hospital Supplies and equipments, etc.
Depending on approved LTO or License to Operate issued by BFAD, once you become a distributor you can carry and market any pharmaceutical products so long as you get a contract exclusive or otherwise with the suppliers. This means unlimited business opportunities, unlimited network growth and unlimited earning potential.
Is it profitable?
In the outset it is very profitable considering the 300% and up margin. But just like in any other business profitability is measured by how much sales and collections made against expenses.
I want to start a pharma distribution business now what should I do?
First and foremost you must have a legitimate supplier. You can click here if you want to start exploring for a legit supplier right away.
Once you have a supplier you can either start doing business using your supplier's licenses and permits, not all suppliers allowed this method of course but you can always try asking. Another way is to register your own company and process your own permits and licenses. The second option is highly recommended specially if your long term goal is to acquire more products and expand your business. You can either register your own company as a sole proprietor or corporation. Just weigh carefully which fits your goals best.
While processing your papers you can simultaneously do market research and pre-marketing. You can request your supplier for training and ask for other information and support needed for your launching. You may get listings of Medical Doctors, Drugstores, Hospitals and Industrial outlets within your exclusive territory. You can also start setting up an office, design your company structure, hiring staff and hiring medical representative. All these preparations would depend on the scale of your business operation, capitalization and direction.
How much Capital do I need?
It depends on how huge or how small you want to start your business with. Conservative estimate if you're an ex medrep who has already a good exposure in the area, you would be needing at least 100k to 300k to start. You would need this amount to purchase your initial stocks inventory. Normally, first few purchases are on COD or Cash On Delivery Basis. Eventually you could be granted a term on payments with credit line depending on you sales performance and on how well you manage your finances.
If you don't have pharma experience but you have the money to pay for experienced pharma people who can help you, like if you hire medreps and experienced supervisors, you would be needing a minimum of 1M. However there's no guarantee that this amount would suffice until you get your equitable collection to make the business self-liquidating. Everything depends on the quality of people you hire and the products you wish to include in your portfolio.
Like any business your success in Pharma is dependent on many factors like; your skills or competence, aggressiveness, determination, people, capitalization, and more importantly your timing and some element of luck. One thing for sure, Pharma business is a very exciting and very lucrative undertakings. Exciting because its a very dynamic and very challenging industry. It is lucrative because earning potential is huge and because its a glamorous industry considering that you would be dealing with top professionals and you or your people must always look in their best all the time to stay on top of the competition.
If you have further questions please visit www.lynnmedcorp.com or you may write your questions at the comment section below.
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