When looking at your business performance in relation to your reverse distributor, you should ask yourself is your business better off than it was before? To answer this question, you can compare your pharmacy’s business performance (with a reverse distributor) to three industry benchmarks: 

  • % Returnable vs Non-returnable 
  • Excessive Return Volume  
  • Pharmacy-Caused Non-returnable  

% Returnable/Non-returnable 

One factor you should consider is the percentage of a pharmacy’s returned inventory that is designated as “returnable” and “non-returnable” (averaged over time). 

A critical goal for pharmacy inventory management is to achieve a low or decreasing percentage of items that are non-returnable. Otherwise, your pharmacy is losing money on inventory that cannot be recouped for cash. A good pharmaceutical reverse distributor can help make better inventory purchasing decisions so that the Non-returnable Percentage trends downward. 

Excessive Return Volume 

Excessive Return Volume is the percentage of the total volume (of a stocked item) that is returned rather than sold due to overstocking and product expiration. 

Knowing the excessive return volume (%) for your pharmacy’s items enables you to adjust your inventory purchasing patterns. This can reduce the number of times products are purchased but remain unsold and are therefore returned at a later date. (Which means lost sales—and profit).

Pharma-Caused Non-returnable 

Pharma—caused Non-returnable is the percentage of items that are rendered non-returnable due to pharmacy error. This corresponds to money lost due to products that have the following issues:  

  • Outside of acceptable expiration date  
  • Outside of acceptable indate period  
  • Damaged product or label  
  • Not in original packaging  
  • No longer accepted by the manufacturer for other pharmacy-caused reasons 

Why does this matter? Products that are damaged, have damaged labels, or are otherwise altered, cause a pharmacy to forfeit return dollars, which negatively impacts the pharmacy’s bottom line.\

 

To learn more about How to Use a Reverse Distributor to Skyrocket Your Pharmacy Business, download our handbook today!