The six most important factors to consider when selecting an independent pharmacy buying group 

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Selecting the right independent pharmacy buying group can affect your overall success

Whether you’re a new pharmacy owner or a seasoned operator, selecting the right independent pharmacy buying group can affect your overall success. You should regularly evaluate your business partners – wholesale suppliers, vendors, secondary suppliers and pharmacy buying groups. They are key components in the overall success of an independent pharmacy business operation. 

The stakes are high when the responsibility of choosing business partners, more specifically a buying group, falls on your shoulders. We believe the following factors are the most important when selecting a supplier to meet your business objectives. 

1. Does the pharmacy buying group’s mission align with your own? 

It’s important to question your group’s mission, values, goals and company culture when assessing whether or not they could be a good fit. When a group’s values align with yours, it’s typically a good indication that the partnership will work well. Differences in overall mission, values, goals and culture could potentially lead to conflict. 

2. What is the business structure of the organization? 

Is the group a for-profit entity, nonprofit, not-for-profit, or cooperative? Most groups will have fees or earn administrative dollars. Are the profits retained by the organization owners or shared with the member owners? 

3. What type of additional products or services does a group provide? 

Do some deep digging to understand the types of discounts, programs, analytics or services the group offers. There are strengths and economies realized with group buying power that, when used effectively, will provide efficiencies for group participants.  

4. Does the group or wholesale supplier require a contractual termination commitment? 

Your business will change and evolve. It is important that your business relationships provide flexibility. Understand there may appear to be advantages today for a two- or three-year purchasing commitment, but will those same advantages apply in 12 months, or even six months, as your business changes? Be careful not to put limitations on your business success by entering a fixed, long-term binding commitment. 

5. Does the group provide a customized and flexible purchasing program? 

When it comes to purchasing inventory for your pharmacy, there are many market forces and uncertainties that may require agility and change. Your pharmacy buying group’s ability to allow you to maintain flexibility, while also advising you on adjustments to optimize your buying strategy, is crucial. Do keep in mind that while it is easy for a group to claim they are flexible, real-world customer experience will usually indicate otherwise. 

6. Does the group show you how to purchase inventory? 

Wholesale supplier Brand Rx pricing, Generic Rx pricing, OTC pricing, rebates, secondary suppliers pricing, etc., are all tied together. Too much exclusive focus on any one element, without the consideration of the others, can negatively impact store profits. Aggregating purchases is the foundation of most groups, but no two pharmacies are the exact same. What works for one may be detrimental for another. It’s important to understand how to navigate and then maximize YOUR bottom line. 

Still don’t feel confident in your ability to select an independent pharmacy buying group? Contact AAP to learn more about how we can help you select the right independent pharmacy buying group. 

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