Online pharmacies: How to increase your turnover using active price management

Some 55 percent of all internet users, or over one in two online shoppers, purchase medications online, according to a recent survey by the digital accociation Bitkom. Behind clothing, books and electronic household devices, these occupy fourth place in the rankings of popular internet purchases. At the same time, the number of customers has been growing for years. In 2015 there were 49 percent, whereas 2012 only registered 30 percent. Online pharmacies are particularly popular among the over-65 year olds, who make up 62 percent of the customer base. In ordering medications over the internet, consumers hope to save on time, effort and money – and they also diligently compare prices. Price spans of up to 22% difference between the cheapest and most expensive providers are no rarity. An active price management can therefore influence profit development positively over the longer term.

Particularly in rural areas, for the chronically ill, old and limited mobility people, online mail order is the easiest path to medicinal supply. These people want to live autonomously at home as far as possible and be well provided for at the same time” – Bitkom Managing Director Dr. Bernhard Rohleder.

Intensification of price competition

Online pharmacies from overseas have enjoyed more freedoms in price setting since this October. For them, a ruling by the European Court of Justice has now discontinued Germany’s price setting for prescription-based medicines. Besides freely available preparations, they can now also grant German customers a discount on prescription medicines. Many more creative possibilities have thus arisen in price competition. It can only be hoped that German lawmakers tighten up as quickly as possible and that German-based mail-order pharmacies can also profit from the decision.

Price management for online pharmacies: Knowing market conditions

Small online pharmacies, above all, who operate mail-order as a side business, are still overburdened with their price setting and simply apply the list prices. In doing so, they are throwing away profit potential. Should you now set prices for prescription medications or freely available health-boosters, creams and other preparations? Important, in any instance, is that you not only analyse your own activities, but also know your competitors in the market, observe them and act accordingly: How do your own prices rate compared to your competitors? Which pricing policies are other mail-order pharmacies following? Where are pricing campaigns taking place now?

Using competitor observation, you can recognise existing price potentials, on the one hand, and attract customers with cheaper offers, on the other. Medications are very sensitive products, for which the optimal price is a fine balance. With an active price management, you can position yourself optimally in competition. How you can optimally exploit the potentials of online prices is presented in our Online Pricing Guide “Five Steps Towards Active Price Management”.

Besides price, other factors such as discoverability on the internet, as well as the service and user friendliness of your online shop, are naturally decisive as to whether customers purchase from you or stray to your competitors. Online pharmacies are led incidentally in all three points by Shop-Apotheke, the market leader, DocMorris and the mail-order pharmacy Medpex.

Do you seek to lastingly increase your sales in online pharmacy retail? Test blackbee and begin your own active price management now.