India is blooming as a country with commercialization spreading its wing in the new market and pharmaceuticals is a business that withstands any economical fall. This emerging market has grown over 20% in size and by 2020 estimated to go further making it a suitable business prospect.
MedPlus is a pharmaceutical chain with a mission to turn around medical deficiencies and revolutionize health care in India. Employing more than 10,000, this company manages a chain of medical oriented as well as optical oriented stores.
Opened with an intention to provide safe and affordable health care instead of sham medicines flooded in the market, this company owns major market in India. In this article we will provide a breakdown of MedPlus and its highlights in the medical field.
History of the brand
The origin of the business happened in February, 2006 as an idea to start a pharmacy providing quality medicines at market rate took place in Hyderabad . Dr. Madhukar Gangadi, created the franchise with a purpose of transitioning future of healthcare.
Since its start, MedPlus has traveled a long way within the last decade, opening up more than 1500 stores in India. Owing to the success of the medical store, MedPlus in 2015 launched their online pharmacy, MedPlusMart.com.
The E-business ricocheted to become the largest in the country with a diversity offered in nutritional, medicinal, OTC (over-the-counter) drugs and sanitary items.
What makes MedPlus so different?
This franchise has successfully built one of the largest supply chains in India within a short span of time. Their uniqueness is their quality of medicines.
They refrain from fake medicines as MedPlus was started with an intention to offer real and effective medicines at affordable prices when the market was flooded with cheap and ineffective medicines.
MedPlus is a multi retail brand that operates on laboratories, optical and pharmacies that has earned a reputation based on its authenticity and integral part in medical development. They own a wide chain of stores spread across 12 states and more than 150 cities.
Why choose Medplus?
For a new business prospect it is more profitable if the franchisee is already well established and has a reputation to uphold.
- MedPlus has been trusted for its great response and quality of medicines. It has acquired an immense market since its commencement and is still expanding.
- Trade margins are less in many pharmacies and MedPlus claims to offer high quality products at higher margins at hygienic settings.
- Also, MedPlus sells medicines online and offline which leaves room for further revenue generation as a supplier.
- Better accountability for cash and stock at the same time increasing productivity and sales.
- Automated inventory planning and updates when the storage requires re-stock avoiding and reducing losses.
- Provided bar-coded products and technology support to minimize hassle while billing.
Requirements to Start a Medplus Franchise in India?
There are certain things to keep in mind before starting a business and plan accordingly. It is mandatory to have drug licensing if you are planning to open a pharmacy. Give your state regulations a check for licensing in pharmacy.
Step 1: Planning the business
Every great venture starts with a plan, firstly you need to take care of finances. Check with your local banks over their loan process and details. Then make sure your location is set and decided, you need to check for accessible places where the customers can reach you.
The required area to setup is minimum of 10-15 sq. meters for the outlet of a pharmaceutical store in India. If a pharmacy business consists of both retail shops and wholesale outlet, then a store with abundant space is required. . If you do not choose a good location it will be very difficult for you. Take a location that’s not crowded with the same kind of business as too many medical stores in the same place would not give you the success you’re looking out for.
Regions of operations
The store are available all across India. The requirement in a rural or small town setting would be minimum 10 square meters also be as popular as urban setting as medicines are needed at every part, every season and this business never goes out.
The employees recruited by you should compulsorily possess a diploma or a degree in pharmacy, as the sale of the drug whether by retail or wholesale pharmacy must be in the presence of qualified chemist approved by the department. Hiring untrained professional without the supervision of an experienced person can be disastrous.A pharmacist qualification is helpful, however, it is not mandatory. At a minimum, prior experience in a pharmacy or managing a small business will be approving. However it is obligatory to hire someone who is a registered pharmacist for your drug store.
It is advisable that the store holds a refrigerator for certain medications with proper air conditioning for specific drugs like insulin. There should be proper labeling and sanitary storage installation for drugs like vaccines, injections. Also a differentiation for homeopathic, natural remedies and complex medicines helps with a trained professional in medicinal background knowledge.
Minimum staff requirement
For a medical store, minimum of two employees are required to efficiently manage the customers in the sales. One supervisor holding degree in medical field is mandatory to accompany another, in case there is an employee willing to learn but has no medical degree yet, he/she should be accompanied by a professional at all times.
The pharmacist that you employ needs to be certified. He/she has to work full time in the store. The pharmacist also needs to hold an approval by the state pharmacy council.
Step 2: GST Registration for business
It was introduced in India from July 2017 and is a mix of taxes like VAT and service tax. After the new tax, pharmaceuticals and medicines are charged at four rates: zero, 5 percent, 12 percent, 18 percent.
The zero percent is only applicable on human blood and its by products and contraceptives. The drugs coming under 5 percent are the main life retention drugs such as vaccines, as well as medicines used to treat diabetes, tuberculosis, HIV or AIDS, malaria, etc.
The 12 percent is applied on majority of medicines and drugs such as diabetic foods, blood glucose monitoring system (glucometer) and test strips, toxins, cultures of micro-organisms, etc.
The highest rate is only considered for products containing heavy drugs such as nicotine.
If the aggregate turnover of the retail is less than 20 lakhs annually, the GST tax will be duty-free.
Step 3: Documentation and registration
Obtaining a pharmacy/drug license
The Central Drugs Standard Control Organization (CDSCO) and State Drugs Standard Control Organization are the authorities of drug licensing in India. There are two kinds of licensing, first being Retail drug license where you possess licensing to operate a general pharmacy outlet.
Second being Wholesale drug license where you take permission to run a wholesale business of drugs and other medicinal products. You’ll need to go to your state pharmacy board and apply for a pharmacy license, as well as register.
To acquire a drug license you must give proper following documents:
- ID and Address
- Application form, declaration
- Affidavit of registered pharmacist or a competent person working
- Proof of ownership of premises, plan for premises and possession
How Much Does it Costs to Start a Medplus Franchise?
The investment is on a high scale and also depends on certain other factors such as location, area of the pharmacy, etc.
Land required in the business should be in an accessible location and not isolated, and it will cost from Rs. 15- 25 lakhs depending on the location of the purchase. Now if the land is on rent, the amount should be around Rs. 10- 30 thousand per month, again depending on the location.
The accessibility of the shop plays a huge role in the sales, the shop should be in a centrally located area which invites enough traffic to the outlet.
Stock of medicines should be regularly updated and deep freeze medicines such as insulin require a refrigerator which will cost up to Rs. 10,000. The cost of inventory will be the highest, approximately Rs. 50,000- 1,00,000 should be invested in the start of the business,then keep updating stock regularly.
On an average, a pharmacy will refresh its inventory 10 times a year. To maintain quality check in this industry, as well as, the reputation of the business, the stock should be kept in check, keeping in mind when medicines expires.
Staff will cost around Rs. 5-10 thousand per month. And monthly expenses should cost around 20-40 thousand. Yet in a year a pharmacy earns around Rs. 70,000- 2,50,000.
In a small town an investment of Rs. 3-4 lakhs will be required and Rs. 8-9 lakhs for wholesale shop. The benefit of wholesale shop is the bigger turnover for the same.
Electricity and other expenses will come up to Rs. 2000-5000 per month.
Revenue Model of MedPlus:
MedPlus is set to expand and open up new stores in India and it is rolling in SBI to provide loans. SBI will provide up to 70 per cent of the total investment with collateral kept on 50 per cent.
The returns is 20 per cent on all sales keeping generic an private label medicines aside as they yield a higher profit margin. The owner produces a volume of business that is twice and even thrice higher than other marketers and enjoy higher customer retention yielding high profit margins.
The total returns are also influenced by the availability and location of the pharmacy but a good sales can yield more than Rs. 50,000 in excess, monthly. The total investment should be between Rs. 15-20 lakhs and amount covers franchise fee, security deposit which is refundable, rental advance, furniture, computer systems and printer, and initial inventory or stock.
Now, the owner should be able to invest at least 6-8 lakhs and then the remaining balance can be picked up on loan for the rest. Through MedPlus’ agreement with SBI, under a special scheme the balance of loan can be given with a collateral of around 6 lakhs.
Is MedPlus worth it?
Coming to the final question, is MedPlus profitable in the long run? The future for MedPlus looks bright as the CEO is expanding the reach and building up new medical store via franchise method. The current focus however being more centered in South Indian states such as Bangalore and Hyderabad. Across India, MedPlus Franchises are being offered only in the states of Andhra Pradesh, Telangana, Tamil Nadu and Karnataka presently.
That being said North Indian sector of this pharmacy is picking up slowly, MedPlus is expanding upwards in a transition. MedPlus created an app with the same name however it has flooded reviews with disappointed users blaming the inaccuracy and late service of the medicines. The users on the MedPlus app call the customer service unreliable and lagging. The online services are disappointing yet MedPlus is one of the most successful offline medical brand in India.
The profit margin is relatively higher for Over the counter drugs, also the returns are 20 percent to sales. Medicines, like previously mentioned, is something that will never go out of business and is yielding profit in high margins. Remember , a franchise is expected to be a mutually beneficial business contract.
If you are not comfortable with franchise terms, don’t take it upon you with a grudging mind. Suggestively, take up a business that you know you can handle, or you can always learn and improve.