08/05/2015 What is the minimum investment required to start up a chemist in Mumbai? ­ Quora

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By 'chemist' I am assuming you want to start a pharmaceutical retail shop in India.

1. You need a registered pharmacist full­time for your shop2. Drug license from state FDA authorizing you to stock and trade pharmaceuticals3. VAT registration with local sales tax dept4. Registration of your premises (rented or owned) under Shops & Establishments Act 5. A computer system with software which maintains inventory and generates invoices

Once you have the infrastructure in place, you can connect with local distributors for eachcompany who will sell you goods and you can then build up an inventory. The beauty if pharmadistribution in India is that the pharma wholesaler and retailer association mandates thatwholesalers have geographical exclusivity to a large extent. I.e: A pharma company say Ranbaxycan sell goods to only XYZ distributor in one area. A retailer can thus buy goods from thiswholesaler only. Another trade practice is the prevelance of a credit system, since pharmacompanies are required to compulsorily extend a credit period to their wholesalers (7days for localto 30 days for upcountry stockists), the wholesalers extend some credit period to their retailers aswell. Also, unsold/expired goods can be sent back to the company and you get your moneyback. Initial inventory that you could end up carrying would be in the range of Rs 2­3 lakhsminimum. Once you have established yourself, you will see wholesalers and company sales staffdumping stocks on you and extending credit periods and schemes for you.

Retailer margins are fixed at 16% for most products across all pharma companies as per standardpractice. Some speciality pharma products, cosmetics, FMCG and nutraceuticals may offer up to20­25%.

So the investment would be for:­ Retail space rental + deposit depending on location­ Computer system Rs 30k max­ Inventory float of Rs 2­3 lakhs min­ Furniture etc Rs 1 lakh depending on space­ Licensing upto Rs 10k max­ Pharmacist + 2 Manpower opex 25­30k p.m­ Other opex upto 5k p.m