Useful Advices - Business

Have you considered buying store returns?

Every wholesale buyer eventually comes across offers for store return merchandise.

I

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

t’s a difficult decision wether should someone get involved with store returns.

While the profit potential is definitely there,

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

there are also adverse factors to consider.

To start with we need to have a clear understanding of what store returns are.

Mos

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

t major retailers have a program where they accept returns from their customers.

Keep in mind that the returned merchandise doe

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

not always have to be in its original packaging.

For instance, one major retailer, allows returns of children’s clothing for a

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

y reason for an extended period of time. I have been told that this period is now 6 months.

Since the major retailers want the

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

repeat business from their customers, they will even accept merchandise which might have been damaged by consumers.

So what do

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

etailers do with these store returns?

They have a program where they contract out with salvage dealers, wholesalers, and fulfil

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ment centers, who then sell this merchandise for them.

So if the merchandise is likely damaged, why would you even consider buy

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ing it?

For the reason that store returned merchandise is usually sold for as little as 10% of the wholesale value.

Assuming t

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

e wholesale value is half the retail value, there are times when you can buy $5,000 worth of retail merchandise for as little as

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

$250.

But before you decide to stock your business with store returns you need to realize the following.

About 50-75% of the m

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

erchandise will be clearly damaged. The remaining 25-50% will be merchandise returned because of size or taste issues.

Meaning

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

hose customers are returning merchandise which doesn’t fit them, they changed their mind about it, or received it as a gift.

Th

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

s means that in reality the price you are paying will only be giving you 25-50% of the merchandise that you originally planned o

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

n receiving. So the $250 is really only buying about $1,250 worth of retail merchandise.

Remember, realistically you should on

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

y expect 25% of the merchandise to be in decent condition.

At this point you are actually paying about 20% of the original reta

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

l value.

$250/$1250

If you are in the retail business you still have room to markup the merchandise.

But if you are in the wh

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

olesale or closeout business, you are in a difficult spot.

How will you resell this merchandise to wholesale or closeout buyers

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

who need to sell it themselves?

Also keep in mind the time it will take to sort out the good merchandise from the damaged items

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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