Community Pharmacy Estimated Profit In Nigeria

Community pharmacy is a shop where health services are rendered. It is the first health facility many sick people go to for solutions and healthy individuals visit for health advice. They make the money from sales of drugs and rendering of services such as minor laboratory investigations like blood pressure monitors.

Profit in community pharmacy

The business aspect is lucrative and profitable in Nigeria. However, the profit between two community pharmacies is not the same even if they make the same sales.

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There is no standard mark-up for sales of products and rendering of services. Every community pharmacy uses their own mark-up. This affects how the profit for that center is compared to another.

Another problem is that some community pharmacies don't even use mark-up. They just fix prices depending on their perception of the product or service and the community perception of it. Also the cost of living affects the end profit of a community pharmacy.

Profit Calculation With Mark-up

A community pharmacy that has a standard mark-up can estimate their total profit. If a community pharmacy uses 30% mark-up for all range of products, that means their profit is 30% of the total accrued money for the day or the month or year. It is the total divide by 1.3.

Example, if the total sales for the month is ₦3 million naira using 30% mark-up, the mathematics will be 3000000÷1.3=2307692.31.

This shows that the product and services rendered cost the pharmacy ₦2307692.31. The total profit will be 3000000 – 2307692.31=692307.69

This profit goes up with a higher mark-up of 40% and above. But higher mark-up reduces sales as many people in the community will be looking for centres with lower selling prices.

Is ₦692307.69 in a month profit good for a community pharmacy? The answer depends on many factors. The cost of living of an area determines if it is or not. In a community where a shop is above a million naira for a year, staff's salary is high, accommodation is on the increase, cost of transportation is unbearable and many more expensive services and products, that profit may not be strong enough to encourage the continued operation of the community pharmacy. However, that profit is more than strong enough for a community pharmacy in many locations in Nigeria.

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In community pharmacy where the mark-up is not stable, it is more difficult to calculate the profits. Instead, it is based on the cost of buying goods vs how much entered the account. This method can lead to wrong estimation of the profits at the end of the day.

So when they say community pharmacy is profitable and lucrative, it always depends on factors not seen from outside. Those around can give an actual value from the sales.