How to Start Pharmacy Business (Chemist/Pharmacy/Retail)?

How to Start Pharmacy Business (Chemist/Pharmacy/Retail)?

In this article, we will cover following topic about Pharmacy Business:

  • Definition of Pharmacy
  • Difference between Pharmacy and Chemist Shop
  • Area required and premises specifications
  • Competent Person (Pharmacist)
  • Documents and Requirements
  • How to Start/ Procedure to start
  • Investment Required
  • Inspection
  • Profit Margin
  • FSSAI Registration
  • Shop Registration

Pharmacy and Chemist shops are last part of distribution channel and are in direct contact with customers i.e. patient and/or his caretaker. Pharmacy and Chemist shops are a profitable as well as a charitable business. In this article we will provide you almost complete information about how you can start pharmacy and retail business.

For staring a pharmacy or chemist shop business, a person requires Retail Drug License Number which is issued by Drug Control Department and has to employ services of a registered pharmacist.  Along with prescription drugs, pharmacy and chemist shops also deal in food and dietary supplements, Ayurvedic Preparations, Cosmetic products and OTC products. Online Pharmacy concept are also becoming popular in pharmaceutical sector.


Pharmacy can be defined as a store or shop or place where drugs and medicines are dispensed, compounded, prepared under supervision of a registered Pharmacist against prescription of a Registered Medical Practitioner.

Difference between Pharmacy and Chemist Shop:

Most of us feel confusion when it comes to differentiate between Pharmacy and Chemist Shop. Both are similar in many aspects. But still have lot of difference in regards with operation and functioning. Both require presence and supervision of Pharmacist during working hours.

Pharmacy is a premises where compounding, preparation of drugs and medicines as per patient requirement is conducted along with dispensing of pre packed drugs and medicines dosage form where as chemist shop is a premises where only dispensing of pre packed drugs and medicines dosage form is conducted.

Read Related Article: How to start wholesale Distribution Business in Pharmaceutical Sector?

Area Required and Premises Specification:

Minimum of area required for starting Chemist Shop and Pharmacy is 100 square feet.  Premises should have adequate space for refrigerator, racks, pallets, sitting etc. Walls and floor should be at least cemented and concreted roof. No crack and flake should be present in premises.

Competent Person (Registered Pharmacist):

For handling daily activity in pharmacy and chemist shop, supervision of Pharmacist is must. No activities can be carried out in retail pharmacy and chemist shop without presence and supervision of a Registered Pharmacist.

A Registered Pharmacist is a person who holds a diploma, degree or doctorate in Pharmacy and his/her name is entered in the register of the state pharmacy council in which he/she is for the time being residing or carrying on his profession or business of pharmacy.

Documents and Requirements:

Application has to be submitted in prescribed form to district drug inspector or drug selling authority office. Application is submitted on application form with detailed information

  • Application Form
  • Pharmacist registration certificate photo copy. If proprietor or one of partner is not registered pharmacist, appointment letter and affidavit of pharmacist will be submitted along with registration certificate copy of pharmacist
  • Academic qualification certificates of pharmacist
  • Date of birth proofs
  • Prescribed fees
  • Ownership proof or in case rented premises, rent agreement with owner detail.
  • Purchase bill receipt photocopy of refrigerator
  • Partnership deed in case of partnership firm
  • Affidavit of proprietor or partners
  • Address proof
  • Blue print/layout plan of premises in 3 copies

How to Start/ Procedure:

Most important thing to consider before starting retail for medicines is Location. Your income from chemist shop and pharmacy depends at which location your premise is present. How much doctors are present at that location, population, already existing numbers of chemist shops are few factors that should be consider before proceeding opening a pharmacy and chemist shop. Along with location your premises should fulfill minimum requirements like area require, cemented floor and walls, concrete roof etc. Second important thing is fulfilling requirement of a Pharmacist. If you are pharmacist then you don’t need any other person but if you don’t have Pharmacist Registration then you have to employee a Pharmacist as competent person to carry out Pharmacy/Chemist/Druggist Daily Activity. In short we are describing business plan for chemist shop below:

  • Search for Premises with required space at Prime Location.
  • Conduct some research and survey about general medicines, prescription habits of doctors and otc products running in that locality
  • Find out distributors and suppliers of medicines and other products in that locality
  • Make a rent agreement of premises if premise is rented
  • Apply for shop registration if necessary
  • Appoint a pharmacist if applicable
  • Decorate premises as per medical shop standard
  • Get prepared a blue print of premises
  • Purchase an air conditioner and refrigerator
  • Complete all documents
  • Visit to nearby Drug Control Office
  • Submit application for retail license for sale, purchase and exhibition of medicines manually and/or online.
  • After application successful submission, drug inspector or any other authorized person by government will inspect premise and check manually about authenticity of documents and premise
  • If Drug Authority is satisfied with all formalities. Application will be approved and drug authority will issue letter for grant of drug retail.

Drug authority will issue drug license number after being satisfy with documents and premises. With this drug license number, sale and purchase of medicines and drugs and related products & services can be carried out at retail basis.

Initial Investment Required:

Total initial investment will vary according to location, area, city etc. There is requirement of shop or premises to start Pharmacy outlet or chemist shop. This shop or premises could be owned or rented. In owned shop, we can add purchase cost in investment if pharmacy is to start after purchasing shop. But starting by purchasing own premises or shop is not possible for majority of start-ups. For them renting a premises or shop is best option.

Rent and/or cost of premises can change with change of location.  So add what is your own shop or premises rent. Suppose rent is 6000/- per month. Pharmacist salary also varies place to place. We are supposing it 12000/- for fresher candidate.

Now come to accessories investment. Decoration and interior expenses vary according to your need. Simple interior will cost less and high profile interior will cost high. Furniture, fitting and chair etc will cost approximate 30000/-. Refrigerator cost is approximate 9000/-. License fee and documentation may be cost approximately 6000/-. Few other hidden expenses may cost approximately 15000/-.

Above expenses are without purchasing any single medicines. These estimates could be change depend at many factors. This investment idea is for information purpose only; you can change actual value from approximate values to find actual investment you require to start.

Investment at purchase of medicines also varies according to stock you purchase in starting and cost of medicines you purchase. Most of retailer can get medicines at credit from wholesaler and distributor.


Inspection is carried out by Senior Drug Inspector/Drug Inspector or any other person appointed by state government time to time for inspecting pharmacies and chemist shops. If all facilities, documents, competent person detail and other particulars are found to be satisfactory then application file ahs to be processed for issuing retail drug license. Otherwise authority can return file for amendments and/or rejection.

Profit Margin in Chemist/Pharmacy/Pharma Retail Shop:

Profit margin of chemist shop varies products to products but generally 16-20% margin is provided to retailers by most of companies with scheme. At generic medicines, this margin increases to higher side. Along with allopathic medicines, A Pharmacy and Chemist Shop also deal in Ayurvedic Medicines and Food/Dietary Supplements.

FSSAI (Food Safety and Standards Authority of India) Registration:

If pharmacy and chemist shop want to sell food and dietary supplements along with medicines and drug. Then it must be registered itself under FSSAI. Read in detail about how to apply for FSSAI Registration?

Shop Registration:

Shop registration requirements and criteria may vary according to your area. Before starting pharmacy business, it should be recommended to confirm first for shop registration or any other registration in locality.

Important Definitions related to Chemist Shop and Pharmacy:

  • Drugstore word is used for such licensees who do not require the services of a qualified person.
  • Chemists and Druggists word is used by such licensees who employ the services of a Registered Pharmacist but who do not maintain a “Pharmacy” for compounding against prescriptions.
  • Pharmacy, Dispensing Chemist word is used by such licensees who employ the services of a Registered Pharmacist and maintain a “Pharmacy” for compounding against prescriptions

I am planning to open a pharmacy /medical store in a small village of gorakhpur, Uttar pradesh. I am planning to have a doctor in that pharmacy which can recommend medicine.
I am looking for a catchy name for my pharmacy / medical store according to locality which helps as booster for my pharmacy.
Please suggest some names

You can read how to select catchy name for your company? same will be applicable for your shop.
Choose a technical different name, not common names like —- medicals store,etc. Choose names which give professionalism like:

  • Pharma Hub
  • Pharmacy Corner
  • Pharmacy Point
  • Drug House
  • Dawa Ghar etc.

Hope above information was useful to you…
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  1. What are the requirements to open pharmacy in Delhi. Please provide me detail

  2. […] Read here: How to Start Chemist and Druggist Shop in India? […]

  3. Hi everyone I like it whenever people come together and share views. Great site, continue the good work! thanks

  4. it is a nice article. Actually, after reading this blog everyone has gotten a little bit idea about the how to start the chemist shop. What document required to start a medical shop. This Detailed is very useful to each person who can start his chemist shop. Thanks for the published this important information for us.

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