What Are You Selling? Strategies for Addressing Your Problem Inventory
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by Dr. Alex Toth<br/>
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Dr. Alex Toth is the Owner of Plumsted Pharmacy in New Jersey and Co-Founder of InStockRx. <br/>
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If you are a Community Pharmacy Owner or Pharmacist in Charge looking for new strategies to manage your inventory and improve margins, this is for you.<br/>
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As pharmacy owners, we all can immediately think of that one item, or perhaps a few items that have been sitting on our shelves for months (it’s ok, confession is good for the soul). It is an item that rarely gets used, can’t be returned, costs hundreds of dollars (maybe more), and the patient who was taking it mysteriously vanished. Unfortunately, this is the type of inventory that is killing your profits and occupying too much cashflow.<br/>
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Let’s look at the strategies for addressing the problem inventory that is gathering dust on your pharmacy shelves. <br/>
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Identification<br/>
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The first thing to do is to identify medications on your pharmacy shelves that are considered problem inventory. The methods that pharmacies typically use for this include:<br/>
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“Walking the shelves” <br/>
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Printing out reports from their pharmacy management system (PMS), or <br/>
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Using inventory management analytics tools. <br/>
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Whichever method you use, the goal is to identify both dead stock and expiring stock to be liquidated. <br/>
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Liquidation<br/>
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The next step is to liquidate the problem inventory. The good news is you have options. Sales to a patient via filling a prescription, a reverse sale (return) to a wholesaler, or selling to another pharmacy are ways to put revenue and working capital back into your pharmacy. <br/>
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One critical action to take before liquidating said inventory is to ensure the items are correctly updated in your PMS system and on your pharmacy shelf. That way, you do not encounter a situation where staff turn down a potential sale to a customer because they do not think you have it.<br/>
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Of course, dispersing the medication to a customer is the best way to meet a patient need and get the most value for your inventory; however, this is not always a possibility.<br/>
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Another option is to liquidate your inventory to another pharmacy. This is where a platform like InStockRx can be used to your advantage. InStockRx works like a search engine. Other pharmacies can search for your surplus inventory and send you offers to buy it. There’s nothing you need to do except review and accept the offers to turn your problem inventory into cash flow. And, you can always post your inventory to InStockRx’s marketplace, along with a price you set, in just a few clicks.<br/>
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What about DSCSA?<br/>
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Pharmacies are often concerned with tracking sales to other pharmacies due to DSCSA (Drug Supply Chain Security Act). It is important to note that DSCSA applies whenever an item transfers ownership. It does not apply in the case of an intra-store transfer (within an organization of commonly owned stores), but DSCSA does apply during aninter-store (outside an organization) transfer.<br/>
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Pharmacies can transfer (intra- and inter-store) medications between other pharmacies; however, they often do not complete the proper documentation. Simply running the transaction through your PMS does not ensure compliance with DSCSA. The proper way to document these transactions is to ensure you have invoices tracked for all items purchased from other pharmacies.<br/>
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InStockRx has leaned into the DSCSA – the platform was built with compliance in mind – allowing its customers to have peace of mind.<br/>
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Show me the money<br/>
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The last step when selling inventory to another pharmacy is ensuring you receive correct payment for items sold. Pharmacies may be uncomfortable with the idea of completing a transaction with another pharmacy unless they know the other owner and can guarantee payment. A worst-case scenario would be for a pharmacy to send a product to another pharmacy and not be paid.<br/>
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While comfort levels are usually higher when one pharmacy has a direct relationship with the other pharmacy, this can limit a pharmacy from completing transactions and casting a wider net with more pharmacies simply because they don’t know each other. To help overcome this hurdle, it is important to use a transaction partner like InStockRx to broker the transaction and ensure all parties have completed their part in the process.<br/>
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This article covered strategies on the selling side of problem inventory. Stay tuned for our next article where we address the sourcing and buying side of the equation.<br/>
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Do you have dead stock or expiring stock that you are ready to liquidate? Click here to get started.<br/>
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by Dr. Alex Toth<br/>
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Dr. Alex Toth is the Owner of Plumsted Pharmacy in New Jersey and Co-Founder of InStockRx.