It has always been thought that who had a pharmacy had a gold mine, only for the simple fact of dispensing medications, but it is not as easy as it seems. The reality is that, this business is very risky, since the licenses are very expensive, the medications leave less margin and the profitability is supported thanks to the free sale of parapharmacy and additional services.
In this sense, the influencer and creator of content Adrián G. Martín has interviewed Toni Miquel Ferrer in his YouTube channel, owner of a pharmacy in Mallorca, who explains what he earns and how this business works, in which he begins by saying that to start it is necessary if or if the degree in “pharmacy”. “If a pharmacy bills a million euros, it can be sold for two million. That is the market reference. I, for example, facto about 300,000 euros a year,” explains Ferrer.
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“Profitability is between 25% and 30% in parapharmacy”
The pharmacist explains that the benefit does not come from medicines, whose prices are set by law, but for parapharmacy and products without recipe. “In dermocosmetic, nutrition or accessories I apply between 25% and 30% margin. On the other hand it clarifies that, although the sale price to the public is identical, the laboratories offer much greater discounts on generic medicines.“ The active substance is exactly the same, but the offers that make us in generic are much higher. Therefore, the pharmacists usually recommend the white brand, since for the client nothing changes and for us it is up to 50% margin, ”he says.
On what it earns for medication, it is not cut and says that “with a brand anti -inflammatory we can win between 1 and 1.60 euros, while with the generic ibuprofen the margin rises to 2 or 2.50 euros,” he explains.
The current star product is a drug for diabetes that, in parallel, is being used to lose weight. “It is very expensive, it is around 134 euros, and right now it is very wanted. Although it is destined for diabetics, there is a growing demand for aesthetic uses,” he says.
For a license you can ask you up to three million euros
To set up a pharmacy, it is mandatory to be a pharmaceutical. In addition, the license number is restricted by population and minimum distance from other pharmacies or health centers. In Mallorca, for example, a separation of at least 250 meters is required.
Licenses are obtained by public tender, depending on academic merits and professional experience. It can also be accessed by buying an existing pharmacy, in a free market in which prices depend directly on business billing. “I have seen pharmacies that invoice half a million euros and ask for three million. In those cases, the premium does not usually justify. It is normal to sell for twice what invoice,” explains Ferrer.
Pharmacies have a high cost
The owner details that its main expenses are the rental of the premises, the license mortgage and the salary of its employees. “I have two workers and I have always preferred pharmacy technicians because they are cheaper than a pharmacist,” he acknowledges. The salary of a technician is around 1,100 to 1,500 euros, while a pharmacist can exceed 1,900 euros per month.
Opening time also conditions profitability. “I tried to expand the hours, but having to hire another pharmacist, the margin was greatly reduced and did not compensate. I returned to the usual schedule,” he says.
A business that is not limited only to medications
Although pharmacies are still a business with some stability, Ferrer emphasizes that the key today is in diversifying. “Before we lived only from medications, but now profitability is in free sale: solar creams, dermo products, master formulas or food supplements. Medications every year leave less money,” he explains.
Online competition is also a factor to consider. Parapharmacy Internet sale grows at high speed and subtracts clients from physical trade. Even so, Ferrer believes that personal treatment continues to make a difference: “There will always be those who prefer the face to face rather than buy on a website.”
Is it profitable to open a pharmacy today?
The owner is clear: it depends on the initial investment, location and management. “It is a stable business, but not exempt from risks. Covid hit us a lot because in tourist areas such as our sales they chopped. It also influences the location: it is not the same to open in a residential area with a lot of population than in an area without traffic,” he says.
Despite the difficulties, Ferrer encourages other pharmacists to undertake: “It is a beautiful job because you help people with your knowledge. But you don’t have to fool themselves: it requires a lot of effort, good planning and being willing to assume risks.”