There is a huge money making opportunity in running a retail pharmacy store in Nigeria. The market statistics show that although it is highly competitive and capital intensive, there is still a decent net profit margin of up to 30% on many products and annual return on investment of over 60%. So an investment of N5 million could yield over N3 million as Profit after tax within 12 months. The good thing about this business is that you can combine it with several complementary businesses e.g retailing groceries.
My research into the pharmacy store business shows that on average the middle class customer spends N18,000 per annum on medication and medical supplements and we are talking of about 44 million strong individuals (if we include the health and dietary needs of father, mother and children). This means that the market can generate at least N792 billion per annum just from the middle class alone. Incidentally there are fewer than 12,000 pharmacy retail stores in Nigeria which means there is a lot of room for new entrants to compete in this market.
What are the Challenges involved in setting up and running a Pharmacy Store in Nigeria?
With regard to setting up a pharmacy the few challenges one could likely face are mostly with registration, licensing and legal requirements. Although financing can also be a challenge however if you can overcome the other challenges you are more than half way there. The other type of challenge involved occurs during the business itself namely the rise in fake and low quality drugs in circulation despite NAFDAC’s best efforts at curbing them. Many pharmacies also don’t consider the medical situation and history of their customers as they readily dispense drugs without medical prescription which could possibly harm the health of drug abusers and addicts. There is the problem of over competition as well because of what the average Nigerian would call “Chemist” – a local drug dispensing shop often manned by an unqualified druggist or in some cases uneducated trader. There are also social practices which can also interfere with smooth running of the business such as; patronage of local medicine practitioners by people who should naturally be seeking medical care from a good hospital. These challenges not withstanding pharmacy businesses are not going anywhere recession or no recession.
What makes Pharmacy Shops profitable in Nigeria?
Many Nigerians have unhealthy lifestyles which somehow makes it possible for pharmacies to thrive. Maintaining poor hygiene can attract disease carrying vectors which can cause various kinds of fevers and illnesses. In Lagos for instance more than 12 million people live in slums and unhygienic surroundings. Less than 8% of Nigerians eat healthy, balanced diet meals 3 times a day, most people are exposed to stressful situations which negatively impact on their health. People must buy pain killers, multivitamin supplements, skincare products, diabetic medications and a host of other drugs meanwhile the average Nigerian pharmacy store is just a middle man between the pharmaceutical companies that produce these drugs and the people who use these drugs with just a few overhead costs besides rent, salaries and levies/dues/taxes to deal with.
How can I start a Pharmacy Shop in Nigeria?
Besides meeting the professional and legal requirements you’ll need to come up with adequate Startup capital or just don’t bother starting at all except if you want to operate as a ‘Chemist’
How Much is required to start a Pharmacy Store in Nigeria?
- POS retail system – N180,000
- 2 Fridges – N250,000
- Pharmacy Shelves – N600,000
- Inventory – N1,800,000
- Rent – N600,000
- Contingency – N300,000
- Cash at hand – N370,000
- Other expenses – N900,000
- Total – N5,000,000
Are you looking to start a pharmacy store in Nigeria and need a bankable business plan and actionable advice on location and market strategy and to also attract funding or guide you in the business? Give me a call: 0803 206 4106 or email me: email@example.com for details