In the county towns of China, pharmacies are an indispensable part of people’s daily lives. These pharmacies not only sell medicines but also carry people’s expectations and trust in health.
However, in this industry, some young people are struggling, and the choices and dilemmas they face are thought-provoking.
The number of pharmacies exceeds that of restaurants
After three years of the pandemic, in this season of high incidence of infectious diseases, the amount of medicine stockpiled in every household far exceeds what they need.
And pharmacies are opening more and more without realizing it.
When I recently started feeling unwell, I quickly searched for nearby pharmacies and found that within a five-kilometer radius of my home, there are 295 pharmacies. When I go for a walk, I can see 3 pharmacies within a hundred meters.
The density of pharmacies even exceeds that of restaurants.
This makes me curious: Are pharmacies opening everywhere really a profitable business?
For this reason, we talked to some practitioners in county town pharmacies and tried to glimpse the real world of retail pharmacies under rapid expansion from their eyes.
Regardless of sentiment, a pharmacy is a business
When she took out the box of aspirin enteric-coated tablets, Huihui hesitated for a second.
She remembered that the teacher in class clearly stated: According to national regulations, prescription drugs should be prescribed by licensed pharmacists. But the township pharmacy where she was interning did not have a licensed pharmacist. Should she give this medicine?
Huihui glanced at the store manager who was measuring blood pressure for the villagers at the door, and thinking about the scolding she had received these days, she still handed the medicine to the villagers.
The other party left satisfied, and Huihui sighed secretly.
In the summer of her junior year, when she first started interning at the pharmacy, she was still full of expectations. “Wearing a white coat, waiting for customers to come. I will recommend the right medicine to them based on their symptoms.” In the utopian fantasy, she guided patients in taking medicine, and she was in charge.
But sorry, this is the real world of pharmacies. There are no patients, only customers. It’s best to throw away the kindness of considering the patients and let the customers pay for high-margin drugs.
The pharmacy where she works is located in a township under Lianyungang City, Jiangsu Province. The local population is about 60,000 to 70,000, which is not considered remote or closed. From elementary school to high school, the town has complete educational supporting facilities. Although compared to the city, the retail pharmacies here are not crowded, but after a tour, there are also more than twenty, mainly private single stores. It is not easy for a newly opened chain pharmacy like them to stand out.
In the familiar society of the township, pharmacies are equivalent to health centers, undertaking the function of half a hospital. The city center hospital is twenty kilometers away. Unless it’s a serious illness that can’t be handled, villagers generally don’t want to spend money to queue up for registration. When they encounter minor problems like headaches and fevers, they will go to private pharmacies to get an IV drip.
If the pharmacies in the town are divided into grades according to consumption level, the pharmacy where Huihui works is a chain brand under a local pharmaceutical company, which is undoubtedly at the top of the pyramid.
When it first opened, many customers would come with a sense of freshness. “I’ve seen your store in the city, you are the only one who has a certain medicine, and now you’ve opened here, do you still have that medicine?”
But except for a few chronic disease patients, most people came once or twice and gradually stopped coming.
Chain pharmacies have fixed prices and cannot be adjusted at will. Some drugs are more expensive than private single stores, and they are not at an advantage in price competition. “For example, Metformin, which treats diabetes, we sell it for 37 (yuan), while private pharmacies in the town sell it for 17 (yuan), a difference of 20.”
Even if the store manager claims that the cheap goods are not from the right channel and are outdated products from the pharmaceutical factory, the villagers, who are extremely sensitive to prices, are not willing to pay.
In contrast, the pharmacy in the neighboring town, on the first day of opening, relied on the activity of giving away 100 eggs for a recharge of 120, and captured middle-aged aunts, attracting tens of thousands of yuan.
“Crazy egg giveaway”
“When there are many customers, there are more than ten a day, and if there are few, there are only two or three.” With fewer customers, to ensure the profitability of the store, the gross profit margin must be increased, such as promoting some oral liquids. “Like Astragalus extract, 88 yuan a box, I don’t know the specific gross profit margin, but the internal preferential price for employees is 27 yuan a box.”
“Why let the medicine on the shelf gather dust” is a dead ideal. A successful salesperson will not let every customer leave empty-handed.
But facing the customers who walk into the store, Huihui always can’t open her mouth. “If a man in his thirties or forties comes to buy Viagra, fifty yuan a pill, I will sell it to them without batting an eye.” But the increasingly aging town, most of the people who buy medicine are grandparents.
“Their monthly retirement income is only a few hundred yuan. People in their sixties will still go to nearby construction sites to work for a living.” Although the pharmacy where Huihui works is a designated medical insurance point, there are very few elderly people who take out their medical insurance cards when settling accounts. “70% of the elderly participate in the new rural cooperative medical scheme, and they can’t get reimbursement when buying medicine.”
Therefore, even though the store manager nagged, Huihui still insisted on recommending cost-effective medicines. Until the end of the two-month internship, she left the pharmacy.
But she is still confused about the future. “If I come back again, I might change, after all, survival is the most important thing.”
Living on commissions, can’t give up conscience, earning three thousand a month
The pharmacy is made of iron, and the staff are like flowing water.
The staff who stay in the store, wearing clean white coats, look like their only job is to wait for customers to come, relaxed and comfortable.
Qiao Na, who has been working for more than a year, knows that this job tests both legwork and eloquence, and the assessment is strict, which is tiring and exhausting.
On the day of the interview, the store manager promised Qiao Na that they were a chain pharmacy in Tai’an, working eight hours a day, with four days off a month, a basic salary of 1,800 yuan, plus a commission on selling medicine, and she would have a guaranteed minimum of three or four thousand a month.
After taking the post, Qiao Na realized that she had been fooled. “I haven’t seen those four days of vacation in a year.” The real probationary period basic salary is 1750 yuan, and the remaining 50 yuan is a full attendance bonus. Taking leave requires going through the leave process and deducting the average daily salary.
The qualification certificate of a licensed pharmacist is worth some money, but not much. At Huihui’s pharmacy, it can add an extra thousand yuan to the salary, but at Qiao Na’s pharmacy, it’s only worth two hundred.
If you want a high income, you still have to rely on the commission from selling medicine and the red envelopes from the pharmaceutical factory’s sales.
In order to expand the market, the sales staff will agree with the store staff to help promote the medicine, and the pharmaceutical factory will give rewards. For drugs with low prices, they can get fifty cents or one yuan, but for those with higher prices, such as a set of Ejiao for two thousand yuan, they can get thirty.
In addition to the encouragement of commissions and bonuses, the store manager will also hold the KPI stick behind to urge the staff to work hard, so as not to let anyone want to slack off and get a basic salary.
“There will be about thirty kinds of medicines in the monthly sales task, such as Compound Banlangen Granules of a certain brand, which must be sold for 69 bags, and Vitamin C of a certain brand, which must be sold for 120 boxes. If you don’t sell enough, you have to buy the medicine yourself. Every day, the ranking of chain pharmacies in the city will also be updated. The staff of the bottom three stores will be deducted money. The most I was deducted was four hundred in a month.”
Carrots and sticks, multiple factors superimposed, the staff of the pharmacies have to give priority to promoting high-profit drugs and health products.
“Cardiovascular drugs and imported drugs have low profits. Don’t look at the high price of imported drugs, they don’t actually make money. For example, human albumin, selling for three or four hundred a box, the store’s gross profit margin directly becomes negative. But common drugs like Changyan Ning can have a gross profit margin of over 50%.”
Pharmacy, or supermarket? Can’t tell the difference
To make it easier to remember, Qiao Na will also make some secret marks when sorting the medicines, so as to distinguish between new drugs, old drugs, task products, and high-profit drugs.
Qiao Na’s pharmacy is located near the hospital and nursing home, and the customer base is very stable, mostly elderly people with chronic diseases such as diabetes, hypertension, and hyperlipidemia. They are used to being thrifty, and the difficulty of promotion is great, but a combined medication can make eight or nine out of ten elderly people successfully buy.
“Considering the risk of medication, even if there are drugs with a relatively high gross profit margin, we will not recommend them to the elderly. Generally, we sell what they usually take. But we will give priority to recommending health products, which cost tens of yuan and can be sold for hundreds of yuan, such as calcium tablets, fish oil, calcium supplementation, lowering blood lipids, and improving immunity.”
In addition to card promotions and combined medication, there is also a more hidden way of promotion in the pharmacy – expert consultation.
The so-called experts are actually not professional doctors, but employees trained by pharmaceutical factories. They will take the opportunity to sell while seeing the elderly. “If you look closely at the medicines they recommend, the manufacturer’s column is the same.”
In order to sell medicine, pharmacies have many routines, but in fact, these incomes cannot go into the pockets of the staff.
Last month, Qiao Na’s pharmacy’s total revenue was 140,000 yuan, and because she was not good at promotion, she only got two thousand five hundred.
Once, the store manager was dissatisfied with Qiao Na’s performance and sent her to the branch where the sales champion was located to learn. “(The sales champion) is born to be suitable for this job. Even if the customers who come to the store are not sick, they have to take something back. Her monthly income is six or seven thousand. To do this job, you have to be clear about your goals and go for making money.”
Qiao Na summarized this learning experience: People with a strong sense of morality find it difficult to live comfortably in a pharmacy.
“(The sales champion) is a single mother, raising a child and supporting four elderly people. She works overtime that others can’t. She goes to work on the Mid-Autumn Festival night and gets fifty yuan, when no one else goes.” 23-year-old Qiao Na has already experienced the warmth and coldness of the world, and sighed, “It’s not easy.”
A mess of a price war, increasingly competitive pharmacies
As the saying goes, “Three robbers are not as good as one who sells medicine.” The rapidly growing county town pharmacies, shouldn’t the store owners have made a lot of money? But Wang Cong, who has been running a pharmacy for ten years, only feels that life is getting harder and harder.
Her pharmacy is located in Sanhe, Langfang, in the center of the county town. In 2013, when she and her husband took over the store, there were only twenty or so peers in the county town. “Our county town is very small, it only takes 10 minutes to drive from the south of the city to the north.” But this year, there are already more than one hundred and twenty pharmacies here. In ten years, the total number of retail pharmacies in the small city has increased by one hundred.
In 2013, when Wang Cong took over the store from the old doctor, the county town pharmacies were growing wildly.
At first, nearby residents would come to them to get intravenous drips, and some people would knock on the back door at midnight to get health care medicine for ten yuan a piece. Because they had no experience in practicing medicine, the timid couple could only cut off this part of the business. Even so, just by selling medicine, the daily turnover was more than two thousand.
Later, the two of them relied on the courses they bought from Yaodian Zhihui, systematically learned about drugs, provided medication guidance to customers, and gradually accumulated credibility among acquaintances in the county town. “Some people will specifically ride a twenty-minute car from the countryside to buy medicine from us.” At the busiest time, the store’s daily turnover was more than eight thousand, which was the first in the county town’s pharmacy sales.
But when it came to 2018, Wang Cong found that the wind had changed, and a large number of chain pharmacies sprang up like mushrooms after the rain.
The increase in the number of stores naturally also means that competition is becoming more and more fierce, and the fierce price war has spread from online to offline.
Newly opened pharmacies are accustomed to using low-priced common drug single products to attract customers, and high-priced health products to make profits, and then cooperate with card promotion activities to attract customers.
“For example, this medicine, Ganmao Kang, we sell it for 12.5, but other stores may sell it for 9.9 yuan a box. The county town is not big, and everyone is doing familiar business. Familiar customers are easy to keep, but familiar customers are also the easiest to get hurt. If he is used to buying Ganmao Kang for 12.5 yuan a box from me, then he goes to the store for 9.9 yuan, he will definitely suspect that I am killing him, and he will not come again.”
The increasingly competitive low-price competition, no one can be alone.
If you don’t take the move, the customers will be snatched away; if you take the move, the store’s net profit margin will plummet.
In order to reduce the price of drugs and gain more room for maneuver, Wang Cong chose to join the local chain pharmacy and gain a competitive advantage in drug types and prices through large-scale procurement.
But even so, the track is crowded, and the store’s revenue is still difficult to improve. The former scenery is gone, and now it can only barely balance the revenue. “The rent is rising every year, starting at more than 40,000, and now it has risen to 78,000.”
The capital market believes that with the diversion of medical care and the implementation of outpatient coordination, more and more patients will flow into pharmacies, but Wang Cong temporarily cannot feel hope and warmth.
In her opinion, if a retail pharmacy wants to have the qualification for outpatient coordination, it needs to pass extremely strict audit procedures, such as the store must be equipped with professional licensed pharmacists, have a 24-hour monitoring system, and be able to save relevant video data for two years.
For county town pharmacies that are responsible for their own profits and losses, such an investment is not small, but the fierce market competition does not necessarily allow them to obtain a matching return.
Where should pharmacy people go?
In one pharmacy after another, customers are seeking healing with money, and the staff are looking forward to income with money. And what is the ideal pharmacy?
Huihui hopes that patients can pay for their services, rather than paying for the premium of the drugs; Wang Cong dreams that she can go back ten years ago and rely on her humane service to retain the nearby villagers.
Perhaps after experiencing a wave of great waves washing away the sand, the pharmacy industry will eventually return to the road of specialization, but before that, there is still an urgent problem facing these pharmacy people: How to persevere?
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