Carve out your niche for a more profitable pharmacy
Thriving in a crowded pharmacy market
- Patients’ insurance largely dictates where they get their prescriptions filled.
- To thrive, independent pharmacies must offer unique products and services patients can’t get elsewhere.
- Keep in mind: patients will pay for high-quality products and services.
The need to stand out
Nearly two decades ago, Dennis and Kathy Song opened a new pharmacy in a Dallas/Fort Worth suburb. They knew their pharmacy had to stand out. Today, despite having 35 pharmacies within six miles, including many chains, Flower Mound Pharmacy is thriving.
Note: map just a part of 6-mile radius from Flower Mound
Evidence of Flower Mound Pharmacy’s success can be seen in its results. They generate $275,000 per year in over the counter (OTC) sales and have above average industry margins.
Focusing on a unique niche
Dennis Song knew that while other area pharmacies focused on dispensing medications, that’s only part of what patients need to be healthy. He decided to compete through a more “holistic” approach, which includes preventive care and addressing lifestyle factors.
This type of approach also incorporates his longstanding interest in alternative treatments. He added vitamins, supplements and specialty foods to Flower Mound Pharmacy’s offering, and added a nutritional expert to his team. The result: Flower Mound Pharmacy and Herbal Alternatives is unique compared to any other pharmacy in the area.
Song observed, “There is a continual growing market for vitamin and herbal supplements.” (See “Supplement Prescription Sales with Profitable OTC Recommendations.”) In addition, Song has seen that “some patients prioritize spending on dietary supplements over prescription co-pays.”
3 questions to find a niche
- What aren’t your competitors doing?
- What expertise do you have or can you develop by hiring an expert or through partnership?
- What is the growth potential for that niche?
When customers walk into Flower Mound Pharmacy, they don’t feel like they are in a typical pharmacy. With specialty foods and supplements, there is reason to go there for more than picking up a prescription. In the pharmacy section, Flower Mound Pharmacy has space for private patient consultations. These offerings set this pharmacy apart from others.
Lessons from Flower Mound Pharmacy’s experience
Flower Mound Pharmacy has carved out a unique niche and is driving revenue. Dennis Song’s advice includes:
- Build in-house expertise. Before opening Flower Mound Pharmacy, Song worked at a chain and developed relationships in the community. Physicians knew they could go to him for answers, and other pharmacies sent him their toughest patients. He broadened Flower Mound Pharmacy’s expertise by partnering with a nutritional consultant.
- Expect patients to pay. People of all income groups will pay for high-quality health products and services. Flower Mound Pharmacy offers multiple services patients pay for.
- Offer something free. Flower Mound Pharmacy invites patients to bring in their supplements for a free quality review. It also offers free health assessments as a reward for healthy behavior. For example, a patient completing a weight management program can get a free cholesterol test.
- Prove value. Flower Mound Pharmacy shows patients when supplements improve their health. For instance, six weeks after a patient starts taking a supplement to reduce cholesterol, the pharmacy tests the patient’s cholesterol and compares the results to a baseline. “We build loyalty with outcomes data,” Song said. With patients’ permission, Flower Mound Pharmacy forwards patients’ data to their doctor to keep physicians in the loop.
- Connect and collaborate. In addition to physicians, Song collaborates with diverse providers, including an acupuncturist, a naturopath and a behavioral therapist. This collaboration results in referrals and builds word of mouth.
- Adapt. As more grocery stores are selling specialty foods, Flower Mound Pharmacy has adjusted its focus to nutraceuticals.
Carving out a specific niche has significant business benefits. When your pharmacy offers unique products and services that patients can’t find elsewhere, they will seek out your store. Discover your niche today and realize the benefits in the future.