Deciding about the right business model could be a daunting and confusing task. Since the medical field has done remarkably well, every business model shows a lucrative future. The franchise model and distribution model are two that people are not very clear about.
What is difference between franchise and distributorship
Both look similar, but there are inherent differences.
Both franchises and distributorship models get products, instruction, marketing materials, and other support from the parent pharma company.
Therefore, people cannot decide whether to open a pcd pharma franchise in India or to take a distributorship.
However, there are important differences also, which are supposed to be considered when choosing between the two.
Let’s understand how they differ and which is better.
Startup cost
One important difference between franchises and distributorships is their startup costs.
If you launch a franchise, then generally requires a lot of money. The cost includes franchise fees, money to procure required equipment, space, training, signage, materials, and employees.
On the other hand, distributorships generally require nothing more than a setup fee. Plus, you will need some money to buy initial products or marketing material.
Product Sources
If we compare Franchises and distributorships based on the source of products, then in franchise owner gathers material from vendors that are corporate-approved. They are together in numbers. Then they put together the products or deliver the service.
For distributorships, the distributor does nothing other than create a product. He will ship it from the parent company and sell it to the local distributor, or the distributor will take orders for products. They are filled and shipped by the parent company.
Time
Another distinguishing aspect is the time needed for business operations. Experts say that it is possible for most distributorships to be pursued either part-time or full-time. It largely depends on the business goals and desires of the distributor,
The majority of franchises are by nature full-time operations. The parent company dictates the hours of operation.
It takes around six months or more to set up a franchise.
Corporate Control
If we compare the level of corporate control involved in a franchise operation and distributorship, then they are different. With a distributorship, the parent company offers a range of products and makes suggestions on how the distributor needs to market and deliver them. Though pcd pharma company product list is given, it is not told how to operate the business.
In a franchise model, franchise owners display the brand of the parent company and represent it to the community.
A franchise has much tighter control over its daily business operations.
Many issues are dictated by the franchisee’s parent company, e.g.,
- Service procedures
- Employee training
- Number of hours
- Pricing
- Décor
- Marketing, and so on.
The System
Distributors enjoy a lot of personal freedom compared to franchisees, they’re supposed to operate their businesses with very little training or support from the companies beyond supply and fulfillment services.
Franchisees have already been developed into successful business operations. They are always with nationally recognized brands. They have national marketing programs and intensive training.
Also Read:
Is License Compulsory for Starting Pharmaceutical Business in India?