Running a pharmacy is not easy, and you might feel that all the effort you’ve made to stock new products, cut costs, or adjust your prices haven’t resulted in higher profit margins. You might even feel that stagnant profits have become something of a chronic health condition for your company.
Looking for a remedy?
We might have just the prescription for you! NOVA has worked with a wide variety of independent pharmacies, and we have partners who succeeded in boosting their sales and growth by shocking margins (see our independent pharmacy profit case study for SuperNOVA Certified Partner, Oswald’s Pharmacy).
Here are the best ways to create a profitable pharmacy, based on our experience with pharmacies like yours:
- Create an Engaging Retail Space
- Offer High-Margin Services
- Turn Your Staff Into Experts
How Can You Make Your Pharmacy Profitable?
You can make your pharmacy more profitable by creating a retail experience that’s focused on empowering your customers and bringing them joy.
That’s the short answer.
The long answer is that pharmacies are at the mercy of a difficult business model. Many customers come to your pharmacy for prescription refills, which aren’t profitable. You can earn higher sales from OTC medication, but you also face stiff competition from major retailers. For these reasons, many pharmacies have become reliant on using snacks and impulse buys to punch up sales.
We’re assuming that you didn’t enter the pharmacy business to sell soft drinks and fidget spinners. We know that pharmacy owners are passionate about helping people find their way back to better health and happiness, and we’re happy to tell you that goal is also the main ingredient in creating a profitable pharmacy.
So, how exactly do you incorporate your mission into your store? Let’s dive into the best ways to create a profitable pharmacy and some unique pharmacy business ideas that will help you accomplish precisely that!
Create an Engaging Retail Space
Your customers shouldn’t feel like they’ve entered a grocery store when they visit your pharmacy. They’re coming to find products to make their lives better, so pharmacies will benefit by infusing a sense of hope and possibility into their retail space.
Ultimately, your customer experience begins as soon as they step foot through your doors, which is why cultivating an inviting and welcoming retail space continues to be one of the best ways to create a profitable pharmacy that many owners overlook.
At NOVA, we offer turn-key retail displays that offer an extremely low barrier to entry for pharmacies and retailers looking to diversify and increase pharmacy profits. A few examples of these offerings include products like our 4 Ft. Mixed Planogram, our Cane Carousel, and our Happy Cushion Display!
By using these elements in your pharmacy, you will create an atmosphere that doesn’t just please the eyes; you’ll create a retail environment that soothes the anxieties they may be feeling when they are shopping. Remember – your customers may be feeling vulnerable when they are visit your store.
“We’ve helped pharmacies reimagine the way they display their HME products, and this has transformed not only the aisles but the atmosphere of the store,” says Sue Chen, founder and CEO of NOVA.
“Giving customers a space where they can try out mobility products with guidance from expert staff members makes people feel as though they’ve discovered a special wellness space where they’re cared for and empowered. They know they can trust the pharmacy as much as their doctors.”
With NOVA, you can make a similar transformation in your own pharmacy, even if you’re upgrading just one aisle at a time.
Related Article: How to Increase Your Pharmacy Foot Traffic
Offer High-Margin Services
You can increase your sales by adding products to your pharmacy that earn higher profit margins. OTC medications take up the majority of your shelves, but these products are also available at grocery stores and other retailers, so you have competition and pricing limits.
Consider adding more home medical equipment (HME) to your store. Not only are these products high in demand (every day, more than 10,000 Americans turn 65 years old!), but they also have much higher profit margins than medications, vitamins, or supplements.
You can also offer services such as repairs, product servicing, and part replacements. This keeps customers coming back to your store and shows them they can trust and count on you to support them and improve their quality of life.
Consider adding HME products that have some degree of customizability, like the products offered by NOVA. People love being able to mix and match the colors and styles of their HME gear because it allows them to express themselves, just like with the clothing and fashion accessories they wear.
The shopping experience and use of the products are more fun for customers when they have personalizable options to choose from.
Turn Your Staff Into Experts
It’s important not to overlook the role your staff plays when determining how to increase your pharmacy’s profit.
Your staff are a crucial part of the customer experience and have a major role to play in building trust and loyalty with customers. The challenge with adding HME products to your store is that your staff might not be knowledgeable about how the equipment works or how to assist customers in choosing what’s best for them.
We recognized this problem and created a simple, video-based training on NOVA products. The training takes less than 2 hours to complete and turns your staff into NOVA MVPs. Your staff will know how to help your customers find the right equipment and will be ready to answer all their questions and concerns.
Related Article: Is Your Pharmacy Customer Service Training Up to Par?
Case Study: How Oswald’s Pharmacy Transformed their Pharmacy Profit with HME
Independent pharmacies play a vital role in their communities, offering trusted advice and personalized care. But, as we have mentioned, with shrinking margins on prescriptions, many owners struggle to find profitable growth avenues. Can Home Medical Equipment (HME) truly be the solution? The story of Oswald’s Pharmacy in Naperville, Illinois provides a compelling answer.
By incorporating some of our ideas to increase pharmacy sales, we transformed Oswald’s Pharmacy from a traditional pharmacy to an HME powerhouse.
Oswald’s Pharmacy, a sixth-generation family business, recognized the need to adapt to changing market dynamics.
Under the leadership of Alex Anderson, a retailer and marketer by trade, Oswald’s embarked on a strategic transition into HME retailing, partnering with NOVA Medical Products to achieve remarkable results.
Oswald’s success wasn’t accidental. It was the result of a well-defined strategy:
- Market Research: Identifying high-demand HME products within their community.
- Education & Training: Equipping their staff with the knowledge and skills to confidently assist customers with HME needs, leveraging resources like NOVA’s training programs.
- Targeted Marketing: Implementing a multi-faceted marketing approach, including digital platforms, social media, community events, and even participating in local events like the “Love Bugs Dance” at the Children’s Museum. Alex understood that HME isn’t just for seniors; it serves people of all ages.
This holistic approach, combined with NOVA’s support, transformed Oswald’s retail space and customer experience.
Oswald’s strategic pivot to HME has yielded impressive financial results. From 2012 to 2023, their HME revenue experienced significant growth, culminating in $1,910,707 in 2023 from $103,197 in 2013. Even with a temporary dip during the pandemic in 2020, their quick adaptation to provide COVID-19-related supplies and vaccinations quickly allowed them to recover and continue their upward trajectory. This growth not only offset shrinking prescription margins but also contributed to the opening of a new store in 2023.
Oswald’s success story offers valuable lessons for other independent pharmacies:
- Embrace Diversification: HME can be a highly profitable addition to your existing business.
- Invest in Staff Training: Knowledgeable staff are essential for providing excellent customer service and building trust.
- Create an Engaging Retail Experience: A well-designed retail space can significantly enhance the customer experience and drive sales.
- Partner with the Right Suppliers: Choosing a supportive partner like NOVA provides valuable resources and expertise.
By following Oswald’s example and leveraging the resources available through NOVA, your pharmacy can transform into a community wellness hub and achieve significant profit growth.
Oswald’s success story offers valuable lessons for other independent pharmacies:
- Embrace Diversification: HME can be a highly profitable addition to your existing business.
- Invest in Staff Training: Knowledgeable staff are essential for providing excellent customer service and building trust.
- Create an Engaging Retail Experience: A well-designed retail space can significantly enhance the customer experience and drive sales.
- Partner with the Right Suppliers: Choosing a supportive partner like NOVA provides valuable resources and expertise.
Oswald’s Pharmacy’s investment in HME generated a significant return, driving a 30% increase in overall sales.
This growth, largely fueled by HME products, effectively offset declining prescription margins and secured the pharmacy’s long-term sustainability. By creating a dedicated showroom and offering a wider selection of NOVA products, items often unavailable at chain pharmacies, Oswald’s solidified its position as a trusted community health resource, fostering strong customer loyalty and repeat business.
By following Oswald’s example and leveraging the resources available through NOVA, your pharmacy can transform into a community wellness hub and achieve significant profit growth.
Exponentially Increase Pharmacy Profits with HME Products
Choosing products that empower your customers is one of the best ways to create a profitable pharmacy. When you partner with NOVA, you can infuse your store with hope and joy. All you need are products that will make a lasting difference for your customers who need more than medication to improve their quality of life.
Stop struggling with stagnant profits and scrambling to figure out how to increase your pharmacy’s business. NOVA’s turn-key retail displays and easy-to-implement training program empower your staff to sell high-margin HME products with products with confidence. Contact NOVA today to increase your pharmacy’s profitability.