How to Start an Online Pharmacy Business – Complete Guide

Industry experts predict a huge growth of the online pharmacy industry in the coming years. It is due to people from tier-2 and tier-3 along with tier-2 cities are more and more buying medicines online due to heavy discounts provided by the companies. It is expected that there will be around 512 million customers buying medicines on online platforms. If you are looking to start a tech startup, an online pharmacy business can be a good option. In this article, find a stepwise guide to starting an online pharmacy business with little money.

Why Open an Online Pharmacy in India?

• Growing Demand: The awareness towards health and increasing chronic diseases have led to the demand for drugs.
• Convenience: Online pharmacies save time and have doorstep delivery, making them attractive to consumers.
• Government Support: The Digital India initiative has increased e-commerce, which includes healthcare portals.
• High-Profit Potential: The Indian online pharmacy market is likely to grow at a CAGR of 20-25% and hence hold great business opportunities.

8 Steps to Start an Online Pharmacy in India

1. Know the Market

If you are seriously planning to start an online pharmacy business, it is mandatory to conduct in-depth market research beforehand. Keep in mind that there are both scopes and threats in running the business.

Some of the positives are high profit margins, access to 100% FDI capital, easy shopping experience, unlimited market potential, and low running costs compared to traditional pharmacy businesses.

Read: How to do Market Research for a Startup

However, there is also a good number of cons that must be accounted for before launching an online pharmacy. The prominent negatives are complex legal processes, lack of awareness among people, technology breaches, and hassles due to drug abuse by customers.

ePharmacy owners must be willing to supply medicines against a prescription to anyone in India. It is also important to know more about your potential competitors. Presently 1mg, Netmeds, Apollo Pharmacy, PharmEasy, and Medlife are the major players operating in the online pharmacy sector.

2. Create a Business Plan

A business plan is a crucial foundation of an online pharmacy. It must encompass the following information:

• Target audience: Targeting demographics may range from elderly and chronic patients, and working professionals to others.
• Products: Range of medicines, OTC drugs, wellness products, and health supplements to stock in the store
• Revenue Model: Commission-based or subscription plans with direct selling can be adopted
• Budget: Budget for licenses, website development, inventory, marketing, and logistics.
• Competitor Analysis: Learn from the success of PharmEasy, 1mg, and Netmeds.

3. Business Registration

Registration of business is a must. Register your organization with ROC. Also, select a unique and relevant website domain name for your online medicine-selling company.

4. Procure Licenses and Permits

Operating an online pharmacy in India is a strict affair, considering the laws and regulations that are in place to ensure consumer safety. Here’s what you need to know:

• Drug License: Obtain a license under the Drugs and Cosmetics Act, of 1940.
• GST Registration: Ensure compliance with taxation laws.
• FSSAI License: If you plan to sell supplements or nutraceuticals.
• Compliance with IT Act: As an e-commerce business, you need to comply with the IT Act, of 2000, to ensure safe transactions and the protection of data.
• Telemedicine Guidelines: If you provide online consultation, then you should be in compliance with the telemedicine guidelines of the Medical Council of India.

Read: Top Pharmacy Franchise in India

5. Setting Up Online Pharmacy Shop

Your website will be the face of your online pharmacy. You must ensure it is secure, intuitive, and functional.

Essential Features:

• Search and Filter Options: Allow users to find medicines easily.
• Prescription Upload: Enable customers to upload prescriptions.
• Payment Gateway: Integrate multiple payment options for convenience.
• User Accounts: Provide order history and subscription management.
• Secure Platform: Use SSL certificates to protect user data.
• Mobile App Development: With mobile usage on the rise, consider launching an app alongside your website.

You can get help from eCommerce platforms to create your online pharmacy store. We recommend Shopify for beginners planning to start a small online pharmacy shop. Shopify is a website builder and online shopping cart system that has every feature you need to run your online business.

But for a larger scale, it is recommended to hire competent professionals having previous experience in setting up pharmacy online stores.

6. Source Medicines

You need to partner with certified pharmaceutical companies and distributors to procure medicines. Also, ensure all products are quality-tested and sourced from authorized suppliers. It is critical to maintain an updated inventory to avoid stockouts.

7. Set Up Logistics and Delivery

Efficient and smooth delivery is key to customer satisfaction. You will need to partner with reliable logistics companies or set up your delivery team.

Delivery Options:

• Standard delivery within 2-3 days.
• Express delivery for urgent medicines.
• Cold Chain Logistics: For temperature-sensitive drugs, ensure proper storage and transport.

8. Promote Your Online Pharmacy Business

A word-of-mouth campaign is the best option for a small online store promotion. Be aware of everyone in your store including your family, friends, and relatives.

You must promote the store online. SEO optimization is a must. Shopify will take care of the SEO optimization of your pharmacy. Every time you update your website, you want Google to know.

Shopify does this by generating the sitemap.XML files to help your edits get indexed faster. You can take advantage of Shopify’s coupon and discount features.

Create coupons and assign discount codes to generate more business. Email marketing is another great way to promote an online pharmacy store. You can also promote your online pharmacy business with social media.

Estimated Costs of Starting an Online Pharmacy in India

Faqs

Is selling medicines online in India legal?

Yes, it is perfectly legal to sell medicines online in India, but you need to acquire the required licenses and follow the guidelines of the Drugs and Cosmetics Act.

Can I sell prescription drugs online?

Yes, you can sell prescription drugs, but only when customers upload a valid prescription from a registered medical practitioner.

How much does it cost to start an online pharmacy in India?

The initial investment can range from ₹5,00,000 to ₹15,00,000 depending upon inventory, website development, and logistics, etc.

How do I gain customer trust?

You will earn customer confidence by selling genuine medicines, delivering on time, and providing quality support.