The Hidden Math Behind Veterinary Rx Sales: A Tale of Two Channels
How do margins really stack-up for pet Rx products in-clinic vs. clinic online store sales?
Let’s crunch the numbers: A 30-day supply of Carprofen priced at $50 (wholesale $30) appears to offer a healthy 40% margin. However, VHMA benchmark data shows the reality is far different. In-clinic dispensing incurs labor costs ($5-$10 per prescription), inventory carrying costs (20-30% annually), and credit card processing fees (averaging 3.5%). Factor in 5-10% annual inventory loss from spoilage and 2-5% shrinkage reported by VHMA, and that 40% margin mirage evaporates to roughly 14.5%.
And while vet clinic-owned online stores through platforms like Covetrus, Vetsource and Blue Rabbit will help ease physical inventory costs and reduce labor burden, they also introduce platform fees, marketing costs and competitive pricing pressures. AVMA Economic Reports suggest the automation and efficiency gains can help preserve margins while freeing staff time for higher-value services.
Also consider, the 2024 Brakke Pet Rx Home Delivery Study revealed “pet owner demand” is the main reason vet clinics have online stores, and nearly 80% of pet owners said home delivery helps Rx compliance. Today, people expect to buy everything in a couple of smartphone clicks and have it delivered to their door.
Smart practices are adopting hybrid strategies to maximize overall practice profitability by leveraging online platforms for maintenance medications while maintaining in-clinic inventory for acute needs. According to AAHA guidelines, this approach optimizes inventory investment while enhancing customer service.
Richard Hayworth
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