A fully stocked line of medicine usually provides a big portion of veterinarian income, but it's not the only way to bring in profits

A fully stocked line of medicine usually provides a big portion of veterinarian income, but it's not the only way to bring in profits

Veterinarians are changing up the way they distribute drugs and supplies. Find out what this could mean for you.

Traditionally, veterinarians generated much of their income from the sale of drugs and vaccines, but some practices are changing this.

The American Association of Bovine Practitioners says most veterinary practices still have drug sales amounting to 50% or more of total sales. Typical practices like this use the common material handling process of ordering, unpacking, labeling, dispensing the drugs, and collecting income from the sales.

However, some veterinarians have decided to stop marketing drugs and are just writing prescriptions for the drugs their clients purchase from other outlets.

A third option is online pharmacies, says the AABP Veterinary Practice Sustainability Committee. This may be an alternative for those tired of the traditional approach, but who want to retain a place (and some of the profit) in the value chain of providing drugs and supplies to their clients.

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Online pharmacies have advantages and disadvantages over the other two approaches.

They generate income, but margins are often smaller than for direct-practice delivery of products.

On the positive, side, they may include a wider range of equipment and supplies than a usual practice may inventory. Also, some suppliers offering online pharmacies allow practices to segment clients and charge differing markups for products sold to segments requiring more or less maintenance.

With these online pharmacies, purchases for some accounts can only be shipped if paid for in advance. This will, of course, reduce the accounts receivable problem in many practices.

Online pharmacies reduce the need for the practice to unpack, label, shelve and dispense. In many locations, orders are delivered within 24 hours. Because drugs are only shipped after there is a need, the problem of outdated drugs is eliminated.

Another advantage is drugs are always invoiced and not neglected or forgotten.

Along with reduced margins, a disadvantage of the online pharmacy is that for some disease circumstances, it may still be necessary to have certain drugs available to treat the critically ill animal at the time of examination.

Typically, too, there is a fee of a few percentage points for sales paid with a credit card.

Overall, the online pharmacy may let you reduce labor, avoid products going out of date, and still retain some income from product sales.

Compiled by staff.

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