In this second part of our series on modern, family-owned pharmacies, we identify the factors that allow these stores to survive, even when the chains come to town. Read Part One if you missed it.
Those in the independent pharmacy business offer the following 5 tips for staying in the trade:
1. Seek New Revenue Sources
Jesse Pike Jr., a third-generation pharmacist and owner of Pike’s Pharmacy in Charlotte, North Carolina, says success as an independent pharmacy owner can come down to ingenuity.
For example, to boost revenue his store handles medications for a nearby retirement community with 200 residents. Each morning he picks up refill requests and returns twice more to deliver medication. He also has a partnership to serve the local homeless and women’s shelters to ensure they get the medications they need.
“We’ve created these partnerships and it’s kept us in business,” says Pike, whose grandfather opened the family’s first pharmacy in Concord, North Carolina in 1919. “You have to cultivate new business. If you sit on your haunches as an independent pharmacy, you’ll become a dinosaur.”
2. Find Your Niche
Independent pharmacies offer a wide range of services that many of the larger, chain pharmacies and big box retailers do not.
For example, according to National Community Pharmacists Association statistics, the top services offered in 2014 were:
- Delivery (78% of independent stores offered)
- Patient charge accounts (77%)
- Immunizations (71%)
- Compounding (65%)
- Sale of durable medical goods (56%)
By offering specialized services, independent pharmacies can become destination stops for customers in need of these services.
Consider compounding. Back before drugs were manufactured in bulk, a pharmacist created and mixed them by hand. Known as compounding, this process requires skill, experience, and equipment that many larger retailers don’t care to invest in.
It is still needed at times today, says long-time pharmacist Del Cranford, owner of Denton Drug in Denton, North Carolina, and part-owner of several other drug stores in the area, including Asheboro Drug and Randleman Drug. For example, if people are allergic to red dye—an ingredient in certain medications—they cannot use the manufactured version. But a pharmacist skilled in compounding can create the same medication, minus the dye.
Additionally, Pike says medications for animals also often require compounding, since proper doses need to be adjusted for a variety of factors, including breed and weight.
3. Be Convenient
At his stores, Cranford says they have worked to find locations that are easily accessible.
Whether it’s due to aging, illness or simply impatience, many people don’t want to have to walk through a big box store to retrieve a prescription. Cranford says they have picked locations that allow customers to park right by the door, and they keep shop sizes small so that customers can get in and get out quickly. And if they don’t want to come in at all, there’s a drive-thru.
At his store, Pike says convenience is always a consideration. He is always happy to chat and provide information but will not hold up a customer who is in a hurry.
“If you aren’t convenient the customer cannot waste the time to come to you,” he says. “And they won’t.”
4. Educate Your Customers
One misconception that owners of independent drugstores face is that because of economies of scale, chain and bigger retailers can offer lower prices.
But that’s the not case, Cranford says. First, many small pharmacies join with other independents to buy so that they can take advantage of bulk pricing discounts. For example, his stores are part of a co-op that buys for 700 shops.
Second, customers with insurance or prescription cards will pay the same co-pay regardless of which pharmacy they visit.
“Back when I started, pricing was a big thing,” he says. “But with insurance and prescription cards, price is not an issue anymore.”
5. Keep it Simple
While many independent drugstores stock more than just prescription medications, most keep it pretty simple compared to their chain-store counterparts, which can stock everything from a family-sized inflatable pool to a slow cooker.
Cranford offers some over-the-counter medications, greeting cards, beauty products, and a few racks of $1 items. But all these combined only make up 15% of his business, with the remaining 85% prescriptions.
At Pike’s Pharmacy, the product line-up is much the same. Barring a rack of greeting cards, the focus is largely on health products. And prescription, over-the-counter, and old-fashioned medicines are in the spotlight.
Both men admit it’s a vast change from the past. The pharmacies they worked in as younger pharmacists sold a large variety of goods and some even included a soda fountain. Both also admit being a little nostalgic for the latter but say the business model of today’s streamlined pharmacy is a lot more sensible for most pharmacy owners.
“It’s so labor-intensive to have a soda fountain,” Pike says. “Have you ever made a real, old-fashioned milkshake? It takes a considerable time, and the profit just isn’t there.”
For his part, Cranford thinks the small, independent community pharmacy is here to stay. Now semi-retired himself, he sold his business interests to his daughter and son-in-law, Lora and Michael Griffin, both pharmacists. They run the stores today.
“I guess I’m an eternal optimist,” Cranford says. “But I think the best-kept secret is to go into the business. I think there’s a future in it.”
Pike agrees, saying the neighborhood drugstore is a fixture that won’t disappear anytime soon. His daughter is now the fourth generation of Pike pharmacists and he believes as long as independent pharmacies keep adapting to the changing market they can prosper, even in challenging times.
“Our neighborhood has been through some tough times,” he said. “But all through it—no matter what—there was a need for the corner drugstore.”