Query:
I want to start my own pharma marketing. Please suggest me how to do billing to C&F to stockist.
Response:
A pharmaceutical marketing company manufactures its products at third party manufacturing basis or contract manufacturing basis from a pharmaceutical manufacturer.
When you will start own pharma marketing company then you need to calculate some important aspects like Price to stockist (PTS), Price to Retailer (PTR), price to CFA, your profit margin, expenses, promotional expenses etc.
You will bill to C&F/CFA at CFA price which will be calculated on the basis of Stockist Price. Stockist price will be calculated at retailer price and retailer price will be calculated at MRP. Till stockist price, you can check calculation in our article: How to calculate Price to Retailer (PTR) and Price to Stockist (PTS) for Company’s Products? You should check this article for complete knowledge because calculation we are covering here only after that article:
Suppose we have a product having maximum retail price of 95/-
Retailer Margin 20%
Stockist Margin 10%
CFA margin 6%
GST 12%
After linked article calculation is here:
Price to CFA:
For calculating price to stockist, pts calculation formula will be PTS (Price to Stockist)*100/ (100+ CFA Margin)
PTS = 69.24*100/ (100+6) = 69.24/1.06
PTS = 65.32/-
This CFA price is included of GST. Now calculate PTS without GST by implementing similar formula.
PTS (W/O GST) = 65.32*100/ (100+12) = 65.32/1.12 = 58.32/-
You will bill to CFA/C&F at 58.32 plus 12% GST. CFA will bill to Stockist at 61.82/- plus 12% GST after adding his margin.
You can calculate all these calculations by putting your actual value of MRP, Retailer margin, stockist margin, CFA margin, GST etc
You need to understand basis things about pharmaceutical marketing company. These will helpful in calculating profit margin and estimating earning to run a company. These are
- Third Party manufacturing Rate
- Minimum Order Quantity (MOQ) for third party manufacturing
- Maximum Retail Price
- GST rate
Third Party Rates are the rates at which your products will be billed to you in finished goods form.
MOQ is the minimum quantity which a pharmaceutical manufacturer will provide you in your private labelling as your company’s marketed by address.
Maximum Rate Price is the price at which your product will cost to consumer. It is inclusive of all taxes.
GST is the Tax Rate applicable at your products.
Hope above information is helpful to you…
For any query and suggestion, mail us at pharmafranchiseehelp@gmail.com