BENEFITS of joining THE PHARMACY CO-OP
better buying prices from your wholesaler on products from the top suppliers
planograms for the best-selling core range of retail products
a smarter ordering system to save staff time and effort
1. What is The Pharmacy Co-op?
The Pharmacy Co-op is a co-operative retail group for independent pharmacies which aims to improve pharmacy’s retail sales and profits using the principles of good Category Management. We have developed a data-driven range of core products and planograms showing how to display them for maximum sales. We are also developing state-of-the-art marketing tools for instore use and for staying in touch with your customers.
2. Who owns The Pharmacy Co-op?
The Pharmacy Co-op is a fully member-owned co-operative run by Composite Retail Cooperative. The Co-op is guided by an "advisory panel" of members who direct the operations of the group. The current advisory panel consists of Anne-Marie Reidy (Medplus Pharmacy), Clive Cannons (Clive's Chemist), Lorealle Lam (Antidote Group) plus John Saywell (RPM Retail) and Ian Caulfield & Russell Taylor (Composite Retail Cooperative).
3. Who are Composite Retail Cooperative?
Composite Retail Society Ltd (trading as Composite Retail Cooperative) is a member-owned co-operative buying group that was founded 50 years ago to provide better buying for its members by partnering with suppliers. It represents over 200 independent retailer stores in the gifts, fashion, footwear, flooring and furniture sectors and processes over $30million of purchases per year for its members. Composite employs 12 staff in its North Shore, Auckland office.
RESULTS from joining THE PHARMACY CO-OP
improved Gross Profit margin = +2% more retail profit
increased sales = +10% better than other pharmacies
reduced stock holding = 10% less stock
Typical benefits in the first year of membership
4. What are the costs for becoming a Pharmacy Co-op Member?
Members purchase a $1000 redeemable shareholding in Composite Retail Cooperative.
Members pay a $2000 joining fee.
The monthly membership fee is $500 per month. This fee covers the ongoing costs of the RPM benchmarking and ordering software.
Digital and social media marketing fee is $500 per month (optional).
We have proven that even smaller medical centre pharmacies will recoup these costs from the discounts and stock reductions that we help them to achieve.
5. Are there going to be any other costs?
The RPM merchandising consultants will prepare a quote for the one-off costs for a new shop layout design costing approx. $1000 (if required) and for coming instore to implement the planograms – this typically takes 2 days instore and costs $2000 per day plus expenses. This re-merchandising ensures that your shop is presented at a consistent high standard as required for all Pharmacy Co-op members.
You will also be quoted for the RPM consultants to come instore to review your pharmacy (recommended three times a year). Your costs for attending trainings and conferences will be additional.
The digital marketing to your Club Customers and some marketing material supplied will incur additional costs - you will be advised of any charges in advance.
6. What other commitments from members are required?
Members must agree to:
stock the Core Range of best-selling products,
implement The Pharmacy Co-op planograms and instore promotional material,
buy the Core Range of products regularly - either direct or via your preferred wholesaler. (PWL or CDC)
7. Can I still stock other (non-core) products?
Yes – this is at your discretion. But the Core Range products must be displayed in the agreed planogram positions with agreed facings. Smaller pharmacies are likely to adopt the Core Range with very few additions.
8. Do I have to change my pharmacy name or signage?
No - there are no name changes to your independent pharmacy. (You may need to add or improve your category signs as part of our review of your merchandising). The Pharmacy Co-op aims to give you the benefits of a franchise at a fraction of the cost.
9. What cost savings will I receive on my buying through The Pharmacy Co-op?
The discounts already agreed though CDC and PWL are 12% off everything ordered in 3 or more, plus a further discount from key suppliers. Some larger pharmacies are getting even bigger discounts on some products with their direct buying – so as we grow we expect to match and improve on this.
There will be big savings in staff time spent seeing reps and preparing orders - we estimate that you will save 1 day a week of a senior staff member's time. By investing this into sales and service you can expect to increase sales.
We will guide each pharmacy to reduce its range of non-core, slow-moving and dead products. The typical pharmacy frees up $10,000 to $15,000 through this range rationalisation.
10. How does the RPM Ordering software work?
The RPM suggested Order shows how much stock you need to bring your levels up to 60 days cover. This level of cover provides the optimum amount of stock for visual merchandising of core products. We will show you how to edit the suggested order every 2 weeks and download it into Toniq or RxOne ready for you to send to your wholesaler.
11. Which pharmacies can join The Pharmacy Co-op?
Independent Pharmacies will only be invited to join The Pharmacy Co-op if they agree to commit to the core ranging, merchandising and ordering system. The group supports pharmacies of all sizes - from small medical centre pharmacies up to large retail pharmacies in shopping centres. The savings in discounts and stock reduction will more than pay for your membership costs.
12. When can I join?
We already have 35 pharmacies around NZ in the Group. Pharmacies are being invited to join The Pharmacy Co-op now. You will start getting member discounts through your wholesaler immediately. Then the RPM consultants will schedule you in for the implementation of the planograms and ordering training.
13. Can I stay in my current wholesaler marketing group?
Yes. The Pharmacy Co-op is also providing point-of-sale tickets for a selected number of the core products to be displayed instore as Top Sellers and Hot Deals every 2 months. The Pharmacy Co-op can assist members with direct mail to their "customer club" database.
14. What retail price changes do I have to put in place?
None. The Pharmacy Co-op will not be setting retail prices for members. - however our point-of-sale material will include benchmark prices that we will encourage you to display. This activity will ensure that our supplier partners can see real benefits in working with us.
15. Will new products be added to the Core Range?
Yes. We continuously review the Core Range in conjunction with our supplier partners. Members are welcome to purchase new products from suppliers ahead of them being added to the Core Range – this will help us to identify the winners.
16. Will supplier reps still call on Pharmacy Co-op members?
Yes – they will be showing you new products, providing merchandising and/or point-of-sale display material and carrying out training. They will also be monitoring the ranging and planograms for their core products.
17. What other services will The Pharmacy Co-op be providing?
The Pharmacy Co-op provides an Info Portal where all newsletters and important information is available online. We will provide training and regional meetings in future. We held our inaugural members conference in Hamilton in March 2019 and the 2020 Conference will be in Queenstown. At present training courses are available through the Pharmacy Guild Elevate programme (user pays). Other group-buying opportunities will be developed in future.
18. What will the Pharmacy Co-op support office be doing?
Composite Retail Cooperative employs specialist personnel in their pharmacy division to negotiate with suppliers, provide communication to members and suppliers, and to manage any payments, rebates and reports.
19. Will the Pharmacy Co-op have any other income other than membership fees?
The Pharmacy Co-op will provide regular sales and stock information to suppliers, and will charge suppliers a monthly rebate based on members’ sales volume. Suppliers will be able to subscribe to RPM to view members’ sales and stock information online for an additional fee.
20. What will member pharmacy’s sales data be used for?
Members' RPM sales and stock data will be used by The Pharmacy Co-op support office staff and RPM consultants to improve the buying, ranging, planograms and supplier negotiations. Suppliers will receive regular reports showing members’ sales and stock and will be able to subscribe to RPM so that their reps can use the RPM reports during their instore visits.