Getting ahead of online pharmacies

As I'm sure is the case with many of you, I've thought a lot over the years about the audacity of online pharmacies cutting into our business. They say competition is good for the consumer, and our government has always had this thing about antitrust. On the surface, it seems that online pharmacies have the same right to our business that we do. But do they? After all, we're the ones educating the client, verifying the patient's eligibility for treatment, and maintaining medical records.

Kyle Palmer, CVT

So far, unfortunately, this has not translated to a sovereign right to the profitability that comes as a result. Until it does, we're stuck with the nuisance of dealing with online pharmacies. I've heard, and entertained, many strategies:

1. Authorize the prescription and focus your business plan on services rather than inventory items. This sounds great, but it's unreasonable unless you practice in a large metro area or focus primarily on wealthy clients who can afford to pay highly for your services.

2. Educate the client about why it makes sense to buy from you and try to stay in the game with respect to price. This approach is the most consistently successful, but it bleeds profit when you're doing an hour of online research for each request.

3. Refuse to authorize prescriptions for pharmacies you don't have a trusted relationship with, alleging that you can't verify the product's legitimacy. Again, sounds nice, but clients aren't stupid. We all know there's no need for online pharmacies to sell illegitimate goods when they can so easily get their hands on the same products we sell.

The answer? A hybrid of many options. We've all been told for years to rely less on inventory revenue—and we should endeavor to do so. But with respect to product pricing, the times they are a-changin'. Anyone who uses a 1990s markup strategy on retail items today might as well buy stock in 1-800-getyourstuffonline. We criticize pharmaceutical giants for needing to make millions on products, but are we any different? Price competitively and live with it.

As with everything you do, however, find a way to distinguish yourself from your competitor. So far, online pharmacies have not sold individual doses of flea-tick-heartworm products or offered any kind of buy-six-get-two-free special. Single-dose products—when priced accordingly for the hassle of splitting doses, copying package inserts, and so on—can be quite profitable. As for the buy-six-get-two-free special, demand that your manufacturer throw in two free doses instead of just one. Threaten to pull your business if they don't comply, then be prepared to follow through. These manufacturers don't want to lose you as a customer. And that second free dose often tips the scales with consumers who price-shop.

Finally, when our clients buy products elsewhere, it's almost always because they assume we're more expensive. But only 20 percent of the time is that actually true—and we haven't educated our clients about this fact. We need a clear, consistent approach to protecting our business. After all, if we concede this area of revenue, what's next?

When given the opportunity, make sure your clients know that the care you provide includes the whole package: stocking the products they need, standing behind the efficacy of those products, providing any follow-up treatment necessary, and providing the building, staff, equipment, and knowledge to care for their important family members. Many of them still want to buy from you. They just need to see the value of doing so.

Kyle Palmer, CVT, is practice manager at Silver Creek Animal Clinic in Silverton, Ore. He blogs at dvm360.com/community as pmcvt66. Please send comments to ve@advanstar.com