When you’re evaluating ways to increase your pharmacy’s profitability, your inventory management strategy should be at the top of your list. Afterall, your medication and OTC inventory is the biggest ongoing expense for your store. That’s why it’s essential to have a plan to properly manage your inventory. Often, stores order more than they need because they don’t want to risk being out of stock. However, having too much inventory sitting on your shelves can cost you more than just the price of the medication. In fact, here are some of the hidden costs tied to your inventory:

Total Ordering Cost

An item’s cost is not measured simply by the price you pay for it. You also need to factor in what an item or order has cost you in terms of time. This includes the amount of time it takes to place, receive, verify, and put away an order. Plus, you’ll need to consider the taxes and shipping costs as well.

Holding Costs

This is what an order costs you in lost opportunity when your cash is tied up on your shelves. Ultimately, the more medications and OTC items you have on hand, the less cash you’ll have to invest in other areas of your business. Read more >