What is Pharma Franchise
Pharma Franchise as the name itself suggests is a franchise of something related to pharma. As we understand that franchise is offered by a company to an individual or another company for a particular area where the parent company is not operating on his own due to some reason. We also know that franchise comes with some basic rights and responsibilities.
Here term “Pharma Franchise” means franchise of a pharma company offered for an unrepresented area with a monopoly right.
Such pharma companies offer their products either all products or those they want on a franchise for sale in an area where a parent company or any other franchise is not operating. Parent company comes up with a list of products along with transfer price, MRP, promotional scheme, packing, pack size and tax as applicable on a product. Here we would like to specify that GST tax slabs are different for different products, they can be 5%, 12% or 18%.
The model Pharma Franchise business is specific to India. This business model is developed in decades and now it’s widely accepted the business model. Pharma sales professionals are the once who are most benefitted from this model as they are the once who got an option to move from job to business without investing lakhs of rupees and this is the mantra of success for pharma franchise business module.
How to Plan Pharma Franchise Business
Pharma franchise seeker can start this business with 15 to 20 thousand rupees in which they can bargain even 15 to 20 or more products in small quantity such as one box of Ciprofloxacin 250 mg tablet, 10 x 10 pack, five 100 ml bottle of lactulose syrup, one box of Lycopene capsule, 10 x 10 Alu Alu pack and this way he can make his order as per demand from doctors and market. In a pharma franchise business, one has to understand billing and pricing pattern and mechanism as well to avoid business loss and hiccups. Every product is sold to end-user on MRP however many players in this chain got a certain profit percentage, such as Retailer and wholesaler. A pharma franchise company bills product to a wholesaler (Stockist) and wholesaler bills to the retailer (medical store). Apart from profit margins of these players franchise seeker has to manage funds expend on transportation, advance payment for the purchase of a product, cost of MR bag, Visual Aids, Promotional material, leave behind. After meeting these expenses he must earn some good amount for business growth and expansion.
What is PTS and PTR in Pharma Franchise
For calculating rates at which product is billed to retailer and stockist as per their respective profit margin we must understand and formulate PTS i.e. price to stockist and PTR price to the retailer for each product.
We will discuss in details on methods and methodology behind calculation of PTS and PTR in detail and will also understand the current market trends in terms of retailor and stockist profit margin and promotional schemes.