How to calculate Profit Margin, Net Rates, Trade Rates, Price List in Pharma franchise Marketing?

We hope if you have visited this page, you have Decided to start pharma franchise/pcd marketing Before start you want to know- how much you can earn through pcd pharma and franchise marketing. Unlike other business, this business don’t have fixed percentage margin. How can you earn from it depend at your selling skill.

Here we are going to present rough estimate of your total percentage margin.
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(Want your company price list here for free, mail company price list us at pharmafranchiseehelp@gmail.com)


PCD Pharma Franchise Companies have simple calculation to finalize their net rates and MRP’s. Most of franchisee and PCD companies finalized their net rates and MRP’s, according to market conditions, and according to their competitors.

Raw material cost is basis of net rate calculation. Pharma Franchise or PCD companies provide medicines to their franchisee, at net price basis.

Net Prices are calculated by following formulas:
Total Cost = Manufacturing cost + Packing Material Cost + Taxes + Transportation + Promotion Material + Expenses.
Net Rate = Total cost X percentage of margin.
Percentage of margin may differ from companies to companies. Percentage of margin is calculated according to number of employees, administration expenses and other expenses of company.

Pharma franchise or PCD Companies provide visual aids, catch covers, leaf behind cards, bags, writing pads, dairies, calendars, pens and number of promotion inputs. That’s way their prices are higher than generic drugs. And doesn’t do direct marketing, hence, prices fall below branded drugs.

Companies have calculated their rates at which they will sell to their customers. Then their franchisee’s turn to fix their margin according to their cost and expenses. Transportation between companies to party also causes expenses hence we will calculate this expense into franchise distributor costing.

Suppose if a Franchisee Distributor purchase a particular medicine at the rate of 10 Rs with a MRP’s of 35 Rs and after include with transportation and tax, it will be increased by 10% and become 11 Rs.

How will he calculate distributions of margins?
20% margin with scheme (10% of free goods or whatever applicable) will go to retailer, even more in some cases. After giving 20% + scheme to retailer, a sum of approximately 8 Rs. will be deducted in MRP. Now value left to 27 Rs.
Trade price for the drug will be 70% of MRP i.e. 24.50/-.This is price that is supposed to be at which Pharma franchisee Distributor will provide drugs to the wholesaler but it is not actual. We consider it standard and use it to find profit margin.

So, Stockiest Margin = Retailer Price – Trade Rate (i.e. 27-24.5 = 2.5 Rs, Nearly 10% of Trade rate)

Now 13.50 Rs left in the hand of Pharma franchisee Distributor. His marketing cost (promotion inputs or commission, small gifts, tours, functions etc.) will be approximately 25 to 30 % of total MRP and this amount will be nearly 8.75 to 10.5 Rs. Total margin of Pharma franchisee Distributor will be 4.75 to 3 Rs and that is equal to 43% to 25 %. In this margin, franchisee salary, travelling expenses, medical representative expenses etc. At purchase of 11/-, you can earn minimum of 3/- as gross profit.


Download profit margin price list by clicking here

Example Price List Format:

Product
Net Rate
Trade Rate
MRP
ABC
10/-
24.50/-
35/-
DEF
12/-
28/-
40/-
GHI
9/-
21/-
30/-

Market factors or type of products also make impact at MRP and Net Rate. Companies also provide free goods or offer in product list. How offer or free goods create impact at your margin read here

That margin is not enough if we will calculate difficulty and competition in market. That Calculation was based upon upon general calculations, you can’t calculate price to retailer or price to stockist from it. It is general calculation for calculating roughly profit margin. If someone finds it incorrect, he can make amendment in it and advice me to correct it. I will be apologized for any mistake.

But one thing, I want to make clear for Pharma Franchise Companies, they should respect their franchise because they do most of hard work to sell your product and gets minimum margin to fulfill their life.

Confuse about how to calculate Price to retailer/Price to Stockist, Read here

You can ask for price list of Pharma pcd Franchise company by mail from us. Send your query for product cum price list at pharmafranchiseehelp@gmail.com

We can provide you free of cost Pharma Franchise consultant to PharmaDistributors and Marketing professionals want to start his own marketing. You can mail me for your question and problems at pharmafranchiseehelp@gmail.com or through contact box…

Hope above information is helpful to you…

Hope for best…

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Keywords: Pharma franchise in India, PCD companies in India, Requirement for Pharma Franchise, How to Start Pharma Franchise, pcd companies price list, pharma companies profit margin

15 Replies to “How to calculate Profit Margin, Net Rates, Trade Rates, Price List in Pharma franchise Marketing?”

  1. Hello sir
    I just read your article on net
    Now I just started pharma trading business
    Now I am bit of confused regarding crack the deal
    Can you explain me regarding doctors percentage of margin
    Also semi wholesaler percentage margin
    It will big help for me
    To share your MR experience

  2. Now doctors ask too much shares.
    They know that new company can do anything for their products to enter a market
    Now semi wholesaler who has some bunch of doctors , they also asked in net rate
    Now competition level is too high that doctors get medicine at lowest price.

  3. Doctors generally takes thirty to fifty percentage at mrp. Doctors percentage varies area to area. In some areas it may less and for some areas it could be high. Not all doctors take percentage. All type of doctors are present. Some consider patient benefits first before prescribing drugs but most of doctors prescribe medical with percentage.

    We can't say it as percentage of margin of doctors. It is considered as Commission. Sale of pharma companies depend at prescription of doctors. There is very tough competition in market. To boast sale pharma companies try to influence doctors by providing money, tours and other luxury products. Companies spend or give money according to company medicine prescribed by doctor. This is what we called Commission or percentage of doctor. Doctors know they are most important person for pharma companies so they demand more and more percentage year by year. Some time companies increases mrp to double or triple to compensation with Commission
    Even today few doctors try to prescribe low mrp products to provide benefits to patient but quantity of this type of doctors is very less.

    Percentage of margin of distributors is generally 10 percentage. Most of pharma Companies provide 10% margin at pts(price to stockist).

    If you have strong relationship with doctors You will not need to bargain with any wholesaler Just concentrate at doctor for prescription Wholesaler and chemist is not big thing to consider in starting Once doctor started to prescribe medicine, they will automatically start doing work at your term and conditions

  4. Sir I have still one confusion…
    I asked regarding semi wholesaler…
    I met one semi
    Who has around 50 doctors…
    Now what's the deal for him
    I should go for net rate ?
    My trade rate will mrp less 23% and net is 55% less to trade…
    Good enough for semi

  5. Sir If semi distributor has 50 doctors, prescription & sale is his responsibility. Then you can provide products at net rates
    You should go with net rates if he provide good business. He takes all responsibility of sale.
    We generally consider net rate to approximately 15 to 35 percentage of mrp( vary product to product)
    Trade rate approximately 70 percent of mrp

    Please clarify for better response
    You have own company or distributionship or stockistship or you are wholesaler

  6. Hello sir,
    I am working in pharma company but I want to start myself marketing for that I am looking for franchise of pharma company plz tell me that without pharmacist diploma/degree can I start my business on my experience.

  7. how to calculate c&f rate if the margin is 6%, retailer margin is 20% & stockiest margin is 12% if the net rate is Rs 20/ & the Mrp is Rs 150/ if the GST is 12%. please help me out

  8. MRP: 150/-
    GST: 12%
    MRP (Excluding of Tax): 150*100/112=133.93/-
    Retail Margin: 20%
    Retailer Price: 133.93*100/120= 111.61/-
    Stockist Margin: 12%
    Stockist Price: 111.61*100/112= 99.65/-
    C&F Margin: 6%
    C&F rate: 99.65*100/106=94/-

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