Effective pharmacy inventory management can make or break your business—and your bank account- in the ever-evolving landscape of independent pharmacies.
As pharmacy owners, we know millions of dollars are tied up in inventory annually. How often have you stared at expired or slow-moving medications, realizing that your hard-earned money is gathering dust on the shelves? If you are anything like me, that happens far too often.
At DiversifyRx, we’re passionate about helping independent pharmacy owners thrive. Part of that success hinges on how well you manage your pharmacy inventory.
Let’s explore some key strategies that can help you streamline your processes, clean up your pharmacy inventory, and boost cash flow.
Leveraging Your Team: Your Secret Weapon in Inventory Management
Your team is your greatest asset in maintaining good pharmacy inventory practices. But let’s face it: inventory management isn’t the most glamorous task in an independent pharmacy. However, with the right training and processes, your staff can transform this tedious task into a streamlined operation that frees up significant cash in your bank account.
Cross-Training: It is crucial to ensure your team is well-trained in using your pharmacy management software (PMS) and conducting inventory audits. Hold regular training sessions to keep everyone updated on best practices. Cross-train your staff so that multiple team members can manage inventory tasks. This reduces reliance on a single individual, ensuring continuity even if someone is out sick or leaves unexpectedly.
Scheduled Audits: Implementing scheduled audits is another critical step. Regularly review your inventory by pulling PMS reports for medications three months from expiration and those that last sold in six months. Routine audits can catch slow-moving drugs before they become a financial burden. This proactive approach saves money and keeps your inventory fresh and relevant to your patient’s needs. You can also use your DSCSA software to pull pharmacy inventory reports based on expiration dates.
Recover Your Cost: Once you identify slow-moving drugs, keep them from languishing on your shelves. Sell them to other independent pharmacies to recapture your costs and reduce waste. Platforms like MatchRX are fantastic for this purpose, allowing you to recover hidden cash tied up in inventory and keep your shelves ready for high-demand items.
The Pros and Cons of Returning Medications to Wholesalers
Returning in-date medications to wholesalers used to be the easiest solution. On the plus side, returning medications is relatively straightforward—until it’s not. Wholesalers’ return policies are becoming increasingly strict, with higher restocking fees and additional validation requirements. These hurdles can make the process cumbersome, and sometimes, your products won’t get accepted even though they qualify. UGH!
The bottom line?
Wholesalers and manufacturers don’t want the items back, so they make it harder for us to return them.
Instead of relying solely on returns, consider alternative, more profitable, and less frustrating strategies.
Reverse Distributors: A Limited Solution for Expired Stock
When medications expire, using a reverse distributor can help recover some of your investment. You will never get 100% of the value of expired stock. Waiting until the stock expires is not the best strategy if you want to maximize your excess pharmacy inventory.
Rather than waiting for your inventory to expire, take a more proactive approach. Regular audits and utilizing marketplace platforms like MatchRX to sell surplus stock can help you avoid the low returns from reverse distributors and maximize your financial recovery. It’s about being ahead of the game, not just reacting when things go wrong.
The Power of a Network: Working Within a Community of Independents
Take action before your inventory expires. A more profitable solution lies in joining a pharmacy-to-pharmacy marketplace. These platforms allow you to buy and sell medications efficiently, keeping your pharmacy inventory fresh and ensuring you have the medications your patients need when they need them. They also offer transparency with up-to-date pricing, helping you make informed purchasing decisions and optimize your resources.
For example, platforms like MatchRX have been around since 2010 and have over 7,000 pharmacies on their platform. You are sure to find another pharmacy owner who would love to take some of your dead stock off your hands. It is also a great place to buy from. Sometimes the deals are purely amazing. In my own pharmacy, I save an average of $3,000 to $5,000 a month by using MatchRX. That’s a crap ton of money (official value BTW!) that can go right back into your business or cash into your bank account.
Sell Your Excess Pharmacy Inventory With A Simple Scan
MatchRX makes it easy to sell your pharmacy inventory on its platform with its “Scan the Square” feature. When you scan a bottle, the label’s 2D barcode automatically fills in all product information, such as serialization, GTIN, NDC, lot number, and expiration date. This technology lets you list items in seconds, making the process efficient and error-free.
Make Managing Your Pharmacy Inventory Fun!
Some of my fondest, silliest memories in my first pharmacy were the competitions I had with my staff to minimize our pharmacy inventory. We would see who could return the most overstock or who found the most expired products. Of course, that was many years ago, when managing your pharmacy inventory was a very manual process. Nowadays, with software improvements and scanning abilities, you won’t need all day to clean your inventory.
You should still make it fun. Tie employee bonus programs to selling or buying from platforms like MatchRX. You can even play poker… Every time an employee lists a product for sale, and it’s sold, they can draw a card from the deck. At the end of the month, see who has the best hand to win a prize.
Consistency in Pharmacy Inventory Management Will Pay You Back
Effective inventory management is not just about avoiding losses; it’s about turning your inventory into a well-managed, efficient resource that supports your pharmacy’s cash flow and overall success. By training your team, using technology, and leveraging marketplace platforms, you can keep your inventory organized, profitable, and aligned with your patients’ needs.
Don’t let expired medications drag down your profits and cash flow. Take control of your pharmacy inventory today by adopting these strategies. With the right approach, you can transform what was once a tedious task into a critical driver of your pharmacy’s success.
If you want to start buying and selling with other independent pharmacies, be sure to check out MatchRX.
