Managing Pharmacy Inventory: 3 Ways Independent Pharmacies Can Control Costs
Every business owner knows that it takes a lot of time, hard work, and dedication to be successful. As an independent pharmacy owner, you know it takes all of these things and more to operate a profitable business. One of the largest investments you will make in your pharmacy is in purchasing product inventory. Managing pharmacy inventory costs efficiently can be one of the best things an owner can do that will directly impact profitability. Here are just a few easy things you can do to control inventory costs.
Buying inventory at better prices – Getting the best prices on prescription and over-the-counter medicines is essential to any profitable business. Shopping around and negotiating the best prices can be time consuming. Wholesalers like Independent Pharmacy Cooperative (IPC) make it easier than ever for independent pharmacies to get the best prices on inventory. IPC is the nation’s largest group pharmaceutical purchasing organization. As a member of IPC, you will join with the other 6,000 members to get the lowest prices on generic and brand name prescriptions, as well as over-the-counter medications. Taking advantage of IPC’s weekly sales, power buys, and rebate programs will help reduce your overall business costs.
Just-in-time ordering systems – With a just-in-time ordering system in place, pharmacies purchase products just a few days before they are needed. Just-in-time ordering reduces the amount of inventory on the pharmacy shelves and limits the risk of products expiring. When medicines expire on the shelf, your pharmacy is losing money and customer’s trust. Some experts believe that just-in-time ordering can end up costing more money. It’s true you may end up paying more in expedited shipping fees or miss out on volume discounts when ordering a few days before the products are needed. However, if you partner with the right pharmacy wholesaler, such as IPC, these extra expenses can be reduced.
Know your products and customers – In addition to just-in-time ordering, knowing what sells in your pharmacy will help increase the bottom line. Slow selling or non-selling products are taking up valuable space on the pharmacy’s shelves. Space that could be dedicated to inventory that sells and sells quickly. Knowing what your customers are purchasing and when will boost overall sales. At the end of every quarter, running a sales report from an inventory management system will show exactly what and how much product was sold. Once you see what customers are actually buying and when, it will be easy to plan your inventory purchases to better fit the business needs. The shelf space being dedicated to slow selling products can then be used to try out new product lines.
While many business experts have different opinions on how to control inventory costs, we recommend purchasing inventory at lower prices, utilizing a just-in-time ordering system, and knowing what exactly sells in your pharmacy. If you are looking to reduce your pharmacy’s costs while maximizing profitability, contact HVRS Solutions today. We can help you get started today with these cost saving initiatives.