Guide to Start B2B eCommerce Pharmacy Marketplace

Back in the days of the pandemic, the pharmacy sector was one of many industries that were in a predicament, where evolution was the only way forward. Shaken up by a slew of impediments including supply chain disruption, shortages, et all ÔÇò a digital transformation was apparent to the point of being inevitable. In the time to follow, the industry has been quickly redefining the ÔÇ£normÔÇØ to prioritize digital channels, creating new waves in the B2B eCommerce sector, with some big names catalyzing and encashing this change.

Naturally, starting with an online pharmacy B2B marketplace in the current times is gaining traction. That said, the B2B pharmacy comes with its own complexities that need a careful workaround with purpose-built technology solutions. In this blog, read all you need to know about the intricacies and nuances of the digital pharmacy industry.

LetÔÇÖs dive in.

 

The Online B2B Pharmacy industry ÔÇò where is the opportunity

According to a study published by McKinsey & Company, for all B2B interactions, eCommerce is now being considered as the most effective sales channel for the majority of respondents. Even though this has been a recent development, B2B stakeholders are getting increasingly inclined to make digital sales channels as key to their business strategy.

The same holds true for the B2B Pharma industry. For the stakeholders in this industry as well, online sales is moving up the priority ladder. But why is that? With eCommerce, the pharmacy industry gets a solution to legacy challenges. LetÔÇÖs first read who all are involved in the B2B pharmacy sector, then the challenges they face, and lastly how is eCommerce addressing those challenges.

Participants in a B2B Pharmacy supply chain

A supply chain for any product consists of every step that is involved in getting the final product to the consumer. For instance, take bread bought by a consumer for his breakfast. It has made the following journey: It started from the farmer growing the wheat, to the cultivator extracting mature crops, then the miller grinding the wheat into flour, then reaching the baker, finally reaching the supermarket via one or many further intermediaries.

All these entities, inclusive of logistics, will make up the supply chain of a product like bread. The business entities comprising a supply chain include producers, sellers, warehouses, logistics companies, distribution centers, and finally retail channels.

Similarly, a number of businesses are involved between the pharmaceuticals starting as a raw material, to reaching the consumer. All of them are the stakeholders within the B2B Pharmacy industry.  Briefly these are the following:

• Pharmacy R&D facilities
• Suppliers of raw materials
• Manufacturers who source these raw materials 
• Contract Manufacturing Organizations or CMOs 
• Contract Packaging Organizations or CPOs 
• (A chain of) Wholesalers that source from manufacturers and distribute to customer-facing businesses
• Storage facilities that can include the provision of cold storage
• These customer-facing businesses can include hospitals, clinics, retail pharmacies, B2C eCommerce channels, and others
• Logistics for the movement of material

The challenges within a B2B Pharmacy industry

With a number of participants involved in the fabrication of pharmaceuticals, there are bound to be impediments. So what are the challenges in this industry? Read about the same below:

• Just like other B2B sectors, pharmacy too has a fragmented supply chain i.e. both vendors with accelerated digital priority and those with lesser emphasis on it, are a part of the same.
• The value chain of the industry is distributed across the globe with some countries playing a larger role upstream while some contributing more with manufacturing.
• It is an intertwined complex network that also involves a highly skilled workforce.
• Demand volatility and limited shelf life of a wide array of products.
• Price fluctuations ÔÇò that are driven by multiple factors affecting the demand-supply relationship: consumer trust, PBM benefit plans, type of product, the role of wholesaler, contract pricing, an abundance of manufacturing facilities (in certain countries) and other such drivers.
• The challenge of spurious products making inroads into the mainstream. 

The solution ÔÇò reason why Pharmacy B2B eCommerce is flourishing

In the B2B ecosystem, eCommerce offers multiple key advantages. Online platforms provide a more convenient and efficient way for interacting and conducting transactions, allowing for 24/7 accessibility for users and the ability to reach an audience without any geographical limitations. Moreover, digitalizing operations offers efficiency and cost advantage through reduced overhead expenses. Discussed below are how these benefits give tangible solutions to the challenges within the B2B pharmacy industry.

• Capability to connect fragmented stakeholders with a B2B marketplace platform, bringing a diverse user base with a common medium.
• Leveraging the benefits of automation via solutions integrated with the platform.
• Bypassing middlemen, fostering transparency, limiting counterfeiting efforts, and streamlining documentation with appropriate eCommerce technology solutions.
• Product comparison is easier on a common platform, simplifying the inherent price fluctuation, and making it easier for buyers to strategize procurement.

These are some of the reasons why the industry is moving forward to embrace eCommerce as their top priority. The stats reported by Statista indicate this favorable shift ÔÇò the online pharmacy market is currently valued at $32 bn, with US ($ 5.7bn) leading the B2C end and China generating $8.5 bn with a strong global B2B presence in the sector. Collectively, the global pharmacy market is projected to grow to $81 bn by 2028 with a CAGR of 20.1%

Connecting all the dots, eCommerce empowers stakeholders within the industry. These are cues that indicate lucrative opportunities for entrepreneurs i.e. an industry laden with legacy woes ÔÇò ripe to be resolved with the benefits that eCommerce brings.

Expectedly, some of the leading names in the industry are taking long strides to make a strong impact. LetÔÇÖs read about these below.

Use cases – B2B Pharmacy Marketplaces

At a fundamental level, an e-marketplace is an eCommerce platform that allows the business owner to host multiple third-party vendors on the platform. These vendors sell products/services to the buyers on the platform. The business owner provides backend infrastructure/services.

The Pharma B2B industry can support multiple use cases on which an e-marketplace can be modeled upon. LetÔÇÖs discuss these below along with some examples of prominent players for each use case.

 

Pharmacy Raw Materials Marketplace

Raw materials are various components that are required in the manufacturing of pharmaceuticals like Active Pharmaceutical Ingredients (APIs), finished formulations, pellets, intermediates and more. Also inclusive of this pharmacy niche are organic raw materials like leaves, wheat protein, and more. Generally, marketplaces offer one of the two components.

Leading player: Pipelinepharma

With a presence in over 30 markets globally, Pipelinepharma connects manufacturers with distributors to source a range of inorganic pharmaceutical raw materials.

The opportunity for such a marketplace is beyond just Pharma. e-Marketplaces like Knowde offer chemicals for plastics, food ingredients, paints, adhesives, and a lot more.

Pharma Manufacturers Marketplace

If you noticed, CMOs and CPOs also make up the supply chain in the pharmaceutical industry. CMOs are contract manufacturers that manufacture products for bigger pharma companies on a contract basis. Hence a B2B pharma marketplace that connects CMOs with bigger companies streamlines this process.

Prominent Player: ProcureNet

A brainchild of the famed techpreneur Gurbaksh Chahal, ProcureNet is a B2B Pharmacy marketplace that offers on-demand manufacturing for buyers in the Pharma industry. The marketplace also has Pharma raw materials and medical equipment for its buyers.

Medical Supplies Marketplace 

The need for streamlining medical supplies was brought to the fore during the pandemic crises. There was an increased demand for masks, sanitizers, and similar medical items. Since then the value of a Pharmacy B2B marketplace for medical supplies continues to gain steam. On such a  platform, distributors or manufacturers can sell medical supplies to B2B buyers.

Leading player: Medline

In business since 1966, and operative across 20+ countries, Medline offers medical products as well as services on its platform

Medical Equipment Marketplace 

The increased focus on treating Covid patients during the pandemic times meant that hospitals were operating more than full capacity. Makeshift Covid ICUs were set up. This further resulted in other ailments taking backstage. For stakeholders in the medical equipment supply chain, this was a disruption that needed reassessment of their strategy. Hence, it was essential to build business resilience for the future. Since then, eCommerce has gained traction for this industry niche.

Prominent player: MedCombo

The globally operative B2B pharma marketplace for medical equipment and more connects manufacturers, suppliers, and distributors.

Pharma R&D Marketplace

According to a report by PwC, it is estimated that about 80% of sales in this domain will be conducted via online platforms. Aligned with this prediction multiple big-ticket B2B pharma marketplace platforms have been launched in the recent past.

Leading player: AstraZeneca Innovation Marketplace.

The B2B pharma marketplace by the global leader in the Pharmaceutical industry, offers R&D services on the platform.

Steps to Build a Pharmacy B2B Marketplace

The pharma industry continues to progress and positive future projections indicate this. Considering this, building a B2B pharma marketplace can give you an entry into a lucrative market, giving you a launchpad for sustainable growth.

That said, launching a successful business would need you to follow a purpose-driven process. Discussed below, are steps that give you insights into launching a result-oriented B2B pharma marketplace business.

1. Market Research: 

To take your first steps confidently and with assurance, you need data. Data that gives you insights into where you plan to go, who is with you, how will you find it there, and what the requirements are.

Translating this for your business. First, identify a market that is growing within the pharmacy sector. Conduct a competitive analysis within this sector to research your competitors ÔÇò their business model, product, and sales strategy, et all. This will tell you what is already existing in the market. Then your target audience ÔÇò their needs, and impediments in the current market scenario. Another important consideration is research into the type of product you want to offer ÔÇò is there a supply/demand gap? These are insights into the current market gap

Now analyzing the data aids in building your market strategy. Devising a unique solution to legacy impediments gives you an opportunity and a unique value proposition to define your business.

2. Understanding the requirements for a B2B Pharmacy Marketplace solution

With an understanding of your business, you will need a purpose-built eCommerce solution that has the right set of features to execute your business plan. For a B2B pharmacy marketplace to give users the right platform to interact and transact, you will need to analyze technology features that give them the tools to navigate the challenges in the domain. Discussed below, are how eCommerce features address the domain challenges.

Challenge: Fluctuating Prices

eCommerce Features:

Request For Quote: Rather than declaring the price of the product on sale, sellers on a B2B Pharma marketplace can stay open for negotiations by placing an RFQ functionality instead of fixed prices.

Hide Prices: The sellers can have the option to hide their prices, navigate fluctuating prices, and keep the pricing strategy subjective to the buyer, taking stock availability and other factors into consideration.

Part payments: Sellers can allow the buyers to book a product at a particular price point, and pay for the order in parts by issuing links which facilitate the lump sum payment in parts. This is equally beneficial when the payment amount of the order is higher.

Challenge: Spurious products making inroads into the market

eCommerce Features:

Admin Control: The Pharmacy B2B marketplace can be designed to give the admin complete overriding authority on the marketplace. This will help in Admin controlling and auditing nefarious activities on the platform.

Downloadable Certifications: The B2B Pharmacy industry is highly regulated with the need for appropriate certifications. The platform should offer the sellers the capability to display downloadable certification documents along with the product.

Seller-Buyer Communication: Apart from the other features mentioned, the platform buyers can be allowed to communicate with the sellers. This will help in streamlining the interaction.

Challenge: Managing a global footprint

eCommerce Features:

Region-specific payment gateways: Reaching out to users outside of your geographical location would need you to consider their preferences. Payment gateways are solutions to manage transactions on your platform. Each region has its popular gateways that have gained popularity. Moreover, within themselves, they offer varying functionalities, payment structures, security features, and others. Choose appropriate payment solutions for each region you want to do business in.

Multilingual and Multicurrency: Just like payment gateways, reaching out with local linguistics and preferred currencies will be key to your global business operations.

Right-To-Left Support: A significant population of the world uses a script that reads from right to left, especially in the lucrative Middle-East region. If this market is in your business plan, this feature will be key to success. With this, all content on the platform seamlessly shifts to an RTL script.

Challenge: Reducing Complexities

eCommerce Features:

Automation: A lot can be achieved by integrating third party solutions with the B2B Pharmacy solution. For that, you need to ensure that your platform has universal compatibility and maximized integration capability with minimum effort.

Logistics: Cater to specific requirements of the industry by allowing sellers to choose between multiple shipment providers. Both in-house or 3PL logistic solutions can be offered, with the eCommerce platform offering a choice between them.

Smooth Workflows: What if your office/warehouse had several corridors, with a confusing seating arrangement, or no mapping? It will affect the efficiency of the organization. For higher productivity, these need your attention. Likewise, logical workflows and seamless UX within the B2B Pharmacy eCommerce solution will drive higher efficiency, helping in meeting the business goals.

Efficient product listing and Advanced Search: Pharmacy products come with a comprehensive set of details. For sellers, a system that has an efficient product listing, to allow precise details of products is quintessential. Likewise, an advanced search for buyers to find those products is equally important.

These are some of the features that are integral to a B2B Pharmacy marketplace success.

3. Build B2B Pharmacy Marketplace

With an analysis of what you need, you have a choice on how to build a Pharmacy marketplace. Building your platform from the ground up sets you back by a significant time, and needs your resources as well. However, a purpose-built B2B Pharmacy marketplace software bypasses all that significantly and gives you a competitive advantage right at the start of your business. Amongst some of the options available in the industry, here is how YoKart B2B is an ideal B2B Pharmacy marketplace software:

– Built from the ground up for B2B eCommerce ÔÇò with Plug and Play/readymade capabilities.

– A range of features for the B2B Pharma marketplace.

– Robust, secure solution with 5000+ global clientele.

– Developed using one of the industryÔÇÖs most popular tech stack, hence ensuring wide-ranging compatibility.

– In-house team for customization needs.

– Comes with pre-integrated business APIs and payment gateways.

– Self-hosted and available with one-time payment options.

4. Devise Monetization Strategy

Revenue generation, the backbone of your business, needs careful consideration for sustained business growth. These are your options: 

Marketplace Monetization Model	Details	Pros	Cons
Commissions	A percentage of the value of every successful transaction is levied by the business.	Every Transaction brings in revenue.	Can undermine the competitive pricing for sellers, especially in price-sensitive markets.
		Sellers with infrequent sales are encouraged to stay on the platform.
Subscription	Recurring/regular fee charged from the users of the platform.	Predictable revenue generation strategy.	For businesses with fewer buyers, the value in the subscription will be difficult to justify.
		Allows you to bundle additional services to give users more value.
Listing Fee	A fee is charged for users to list a product or a service on the platform.	For the business, the revenue is generated even before the transaction takes place.	Just like subscriptions, websites with lower traffic can find it difficult to justify the value.
		For B2B multivendor businesses with big-ticket transactions, commissions can get significantly large to justify their value. Here listing is a plausible way around.
Advertising marketplace assets	Sellers pay a fee to advertise their products/services on platform assets like the banner image.	This is generally an additional revenue stream.	Will need monitoring/audit to ensure the advertisements are aligned with your brand goals.

 

5. Market your Online Pharmacy business

Now that you have your marketplace platform, the next step would be to market it. While a good SEO, paid advertising, and content marketing are tried and trusted digital marketing strategies. For a business of this day and age, these can be additional marketing strategies that you can consider.

– Account-Based Marketing (ABM)

– Partnering with Internet Influencers.

– Video Marketing through channels like YouTube.

Wrapping Up

A CAGR of 20% means that the pharmaceutical market is on an upward trend in the times to come. For an industry laden with complexities, eCommerce is bringing a change, catalyzing streamlined operations, globally ÔÇò and promising opportunities for those participating in this change.

To encash this opportunity, entrepreneurs or business owners can use the steps mentioned in this blog to launch their B2B Pharma marketplace. YoKart B2B, a ready-made software to give you a headstart in this industry, with its rich-featured, purpose-built, and versatile underpinnings.

FAQs

Q1. What is an online B2B Pharmacy Marketplace?

Ans: A B2B pharmacy marketplace is an online platform that businesses across the supply chain of the Pharmacy Industry. These could include raw material suppliers, manufacturers, CMOs/CPOs, distributors, and retailers.  It allows buyers to purchase medications and other supplies from all these suppliers. Such a marketplace is managed by an intermediary business owner, which manages operations, infrastructure, and more for the eCommerce operations to be conducted smoothly.

Q2. What is an example of a B2B Pharmacy Marketplace?

 Ans: A Pharmacy marketplace platform can connect users across the supply chain of the industry. Here are some examples:

– Pipelinepharma: A raw material B2B Pharmacy marketplace that connects vendors supplied raw materials to buyers on the platform.

– ProcureNet: An e-marketplace to connect buyers with on-demand manufacturers of the Pharmacy industry.

– MedCombo: An eCommerce multivendor platform that allows vendors to sell medical equipment to the buyers on the platform.

 and more.

Q3. What is a Pharmacy B2B marketplace software?

Ans: A Pharmacy B2B marketplace software is a solution that allows businesses to launch a B2B Pharmacy multivendor platform. For instance, YoKart B2B is a readymade self-hosted solution that has key features for a Pharmacy B2B marketplace platform right off the bat. Moreover, it allows businesses to make a confident start in this industry with a purpose-built platform.