The demand for online pharmacies like PillPack, CVS, and Capsule has increased drastically in the last few years, especially through the Covid-19 pandemic. As the online sales of prescription medications and medical supplies surge, more local pharmacies are planning to add a delivery service option to their business model.
The global online pharmacy market is said to grow by 20% CAGR in terms of revenue by 2025. Many customers have avoided going to the pharmacy and would rather get their prescriptions delivered to their doorstep. This traditional shift from visiting the store to ordering medicines online will persist.
In this blog, we will cover some important steps on how to start a pharmacy delivery service, with an insight on important aspects for the business and how popular online services operate and focus on. Let’s get going!
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The reason more customers and patients like to order through a medicine delivery app is because:
- They offer greater accuracy;
- Can accommodate large quantities of prescriptions;
- Reduced costs and almost free delivery of medicines; and
- Can improve patient adherence in being regular with their medications on the right time.
If you have an existing pharmacy or you are planning to start an online medicine delivery service, you have come to the right place.
What are the Basics of Starting a Pharmacy Delivery Service?
The Covid-19 pandemic slowed down many industries around the world. But the pharmaceutical industry got a boost through mail-order drug delivery during the lockdown.
Some major trends that are influencing the pharmaceutical marketplace are mentioned below:
- The growth of spending on medicine is said to reach $1.4 trillion by the end of 2021.
- The increasing importance of patient engagement.
- Adopting new technology for sale & dispatch of medical supplies using digital mediums.
- Set of pricing reforms for government programs.
The major reasons for why customers prefer ordering prescriptions from an online medical courier service are as follows:
- Helps save time and get medicines delivered at your preference and time.
- Heavy discounts and lower prices offered by online pharmacies
- Improves accessibility of the medicines and medical equipment.
- Can dispatch and distribute orders using curbside pickup or contact-free delivery.
Key Aspects for Starting a Pharmacy Delivery Service
Some of the major factors before starting a pharmacy delivery business.
Understanding the Market Leaders
Many of the competitors and market leaders offer home delivery services for over-the-counter and prescription drugs that often cost no more than what you are already paying for your medications.
Take a close look at some of the market leaders like PillPack, Capsule, CVS Pharmacy, and Alliance RX. Notice how they are doing things differently and what keeps them at the top. Studying the competitors and market leaders is an important aspect before starting a business venture.
Handling Customer Data
You will need a secure database system to record and keep safe all the confidential information of your clients and customers. While running a medicine delivery business, you will have to be very particular about how you record, store, and maintain this data.
Storing & Transporting Medicines
Different medicines and medical supplies have specific requirements on how they should be stored and transported from one place to another.
How you transport medicines and medical supplies will decide the customer experience and the way your brand is perceived. It is crucial to consider the best options for safely transporting all the medicine orders from the store to the customer’s home
Payment Method Options
By offering multiple payment options for customers, you can ensure that your business gets paid quickly without any hassle. Make sure you have all the widely used payment gateways like Debit Card, Credit Card, PayPal, Stripe, and Square available for accepting payments.
Delivery Route Planning & Optimization
The speed and accuracy with which you deliver prescription medications to your client will decide whether they love your service or not. The most crucial element for all medicine delivery companies is to plan and optimize routes that allow them to deliver orders quickly.
Having a delivery route planning and optimization system will immensely be helpful. Relying on apps like Google Maps or Waze, will not be of use because you will have multiple drivers covering multiple deliveries in a single day.
- Save up to 95% of planning time
- Save up to 40% of time on the road
- Plan 500 stops at once
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A 10-step Guide to Opening a Pharmacy Delivery Service
Here is a step-by-step guide on opening a pharmacy delivery business.
Step 1: Indulge in Market Research & Understanding the Pharmacy Industry
The most primary thing before starting a business will be to start with a market analysis, understanding the industry and its trends, and closely studying your competitors.
The study and analysis will depend on:
- Whether you are an existing pharmacy and planning to add delivery?
- Will you be delivering to customers or hospitals and clinics?
- Will you be expanding into a medical courier business?
These questions will help you filter out your thoughts and goals regarding the business. It will help you reach a decision and stick to it.
When it comes to understanding the industry, the market and the competitors, you will be looking into a lot of details. Notice how the competitors are doing it and what is it that they are doing differently? Finding their niche will also help you discover your own.
Towards the end of this research and analysis, you will have quite a lot of useful information to go ahead and pick your own niche, create a detailed business plan, and figure out the marketing plan as well.
Step 2: What do Your Customers Need?
Your customers feel the need to stay safe and healthy. They do not want to risk stepping out.
In addition to this, find other specific reasons why your customers would want to get their medications delivered like:
- Ease and convenience.
- Discounts and low-costs offered by online pharmacies.
- Regulate and improve intake of required prescriptions.
- Ability to track which medicine to take and when.
- Automatic refills.
- Free delivery.
Having to struggle with finding a particular medication and then remembering when to take it and then going to the pharmacist again in a few weeks, is too much trouble for your customers.
By offering delivery services on time, you are not only providing them medications, but you are providing a pleasant customer experience which can boost adherence.
Step 3: Understanding the Laws and Regulations
The laws and regulations relating to the sale of prescription drugs and other medical supplies are subject to change depending on the demographics. For that, you will need to look into the specific laws relating to the state or city you are starting your medicine delivery business in.
Make sure you figure out the following things when trying to sort your business according to the laws and regulations:
- Where and to whom can the medications be delivered?
- What customer data can you store and share with others involved in the process?
- What information will you record and how do you intend to store and secure it?
In this case, the goods are essential, but the person and the information attached to each order is more sensitive and needs to be secured. Take a look into the FDA Code of Federal Regulations relating to food and drugs
Step 4: Legal Identity, Licenses & Permits
Get legal aid and find out all the licenses and permits you need to register for starting a medicine delivery business. As a business owner, there will be strict legal guidelines you will have to follow.
You will start by choosing a legal identity for your business and then registering for all the permits attached to your industry.
Licences and permits relating to food and drugs can often be a challenging task to acquire. It will be really helpful if you have your lawyers by your side or others who have gone through the process of acquiring a drug license.
Step 5: Establishing a Business Plan
Building a good business plan will create a strong base at each stage of starting and carrying out your business. It will work as a road map for your business to start, run, and grow.
Some of the important sections that you must cover in your business plan are as follows:
- An executive summary including your company’s vision, mission statement, and product or services.
- Details about the company, delivery models, people associated with it, strengths, and the problems you aim to solve.
- Market analysis mentioning competitors, themes, and trends.
- Highlight your legal entity (whether it is a sole proprietorship or partnership).
- The line of products and services you are going to offer.
- Marketing plans and strategies.
- Outline your funding requests and requirements.
Step 6: Acquiring Funds
Carving out a well-defined business plan will help you find specific funding options that you can opt for. Choose the financial mechanism that works best with your medicine delivery business goals.
Some of the best financing options available to you can be:
- Traditional lenders like local banks, credit unions, and financial institutions;
- Personal loan;
- Organizations like Small Business Administration;
- Angel investors or private investors;
- Crowd-funding platforms like Kickstarter and Indiegogo.
While preparing to apply for a loan, you will have to include gathering three major types of funds:
- Build-out Capital:This is basically your start-up costs for acquiring fixed assets.
- Opening Inventory Financing:This funding is required for maintaining inventory.
- Working Capital:This amount will be for managing your day-to-day expenses like utilities and payroll.
Are you ready to check out Upper Crew? Go ahead and see how it can help your pharmacy delivery business.
Step 7: Physical Store, Location, and Online Store
The capital you gather from your sources will help you buy a physical store, warehouse, and create an online store as well. When it comes to the physical store, the location matters the most. Make sure the store is easily accessible to the customers.
The location can be determined using points like:
- Competing pharmacies in the vicinity.
- The demand for a pharmacy.
- Purchasing power of the customers in the area.
- Road networks and accessibility.
For an online store, you can develop a medicine delivery app or a pharmacy delivery app. This app allows users to buy medicines online without having to come to the physical store. The orders can be packed and delivered with the help of delivery drivers.
Step 8: Hiring Manpower
Having an online pharmacy means you will be providing round-the-clock support in addition to having pharmacists, business managers, supply chain executives, and drivers.
You will have to hire experienced individuals with the right knowledge relating to the medications and medical supplies you will be selling.
You will also need a dynamic team of drivers to help you deliver the orders on time and efficiently. You can post jobs on portals like FlexJobs, ZipRecruiter, and Indeed.
Step 9: Marketing and Branding Strategy
Your marketing and branding strategy must be in sync with your brand and user experience goals. Having a marketing and branding strategy is not just about securing an online presence. It is about creating an experience.
There are many brands doing the same thing as you are, but how are you going to offer the users a different experience? Make sure you have really strong ideas and strategies in place to filter out the competitors and be visible to potential customers.
Step 10: Optimizing the Delivery Aspect of Your Medicine Delivery Business
Now comes one of the most important aspects for any delivery business – Route Planning & Optimization.
Your dispatchers and delivery drivers will need the right tools to help them plan efficient routes for delivering medications on time. Delivering medications on time is a priority for any pharmacy. A route planning tool can help you keep up with that kind of demand.
Using tools like Google Maps or Waze will be of no use. You will need tools like Upper Crew that help you plan multiple routes and optimize them.
In addition to route planning and route optimization, Upper Crew offers the following features:
- Quick Excel import;
- Customer and driver details in one place;
- One-click driver dispatch;
- Driver mobile app;
- Proof of delivery;
- Reports & analytics.
By using Upper Crew, a lot of our clients have been able to:
- Save 95% planning time;
- Add more drivers;
- Fulfill more deliveries on a route;
- Accept new customers and clients;
- Improve timely deliveries;
- Save hours of manual work;
- Saving routes for regular deliveries.
What Does a Popular Online Medicine Delivery Business Do Differently?
How Does PillPack Do It?
PillPack aims to solve medication non-adherence by going beyond the weekly plastic pill organizers.
Ways in which PillPack Reinvented Pharmacy
From the conception of this idea, Parker collaborated with the design firm IDEO on a streamlined approach to packaging.
PillPack wanted to do away with traditional medicine bottles by collating a patient’s prescriptions and mailing out a roll of personalized packets.
Each of these packets is filled with the right pills labeled with the date and time they should be consumed. The service is absolutely free. Clients only pay for copays.
The ultimate goal of PillPack is to make the entire pharmacy and medication experience simpler for the users.
Whether you are adding delivery options to your existing pharmacy business or joining hands with a third-party online pharmacy, it will prove to be quite profitable. The major reason for the popularity and profitability of pharmacy delivery is the ease and convenience it offers at such lower prices.
There are several factors that play a role in influencing the exact cost of a medical courier business. On an average, you will require somewhere around $300,000 to successfully start a medical courier company in the current scenario.
The best way for courier services to start getting clients is by getting in touch with different businesses or even budding entrepreneurs to offer delivery services to their customers. Networking, advertising, and registering your business on online portals will help immensely.
How Are You Going to Do It Differently?
Take inspiration from the best online business in the healthcare industry and ask yourself: ‘What can I do differently with my medicine delivery service business?’ While doing that, focus on customer experience and that shall lead you in the right direction.
Whether you are running a third-party service or have your own medical delivery business, it is a profitable and lucrative business opportunity.
No matter what you do, make sure you offer the best delivery experience because that’s what matters when you are involved in the last-mile delivery business. The last leg of the process holds quite a lot of pressure.
For handling all your driver schedules and scaling up your deliveries, you can rely on Upper Crew.