How to Calculate Profit Margin In Pharma Franchise Business

How to Calculate Profit Margin In Pharma Franchise Business – Calculation of profit margin is very crucial for any business. In PCD franchise world, you make returns on the sales. Every company offers a different margin and you need to know the calculation part. You need to make a few research works to compare the best for your company. If you do not know how to calculate profit margin then we can help you. In this article, we are going to share how to calculate Profit Margin in pharma franchise business in India.

How to Calculate Profit Margin In Pharma Franchise Business

Profit can be affected by a list of items. This can anything related to your growth and development as a businessman. The pharma franchise business is the best business to do when you have fixed investment and want a good return form it. You need to connect with a trustable and reputed company. Alisier Drugs is the best PCD Company in India to provide you good solutions. We are going to share our insights related to how to calculate profit margin in pharma franchise business in India.

What Factors To Look When Deciding On Profit Margin?

Pharma franchise business is evergreen. It is growing more and more in terms of opportunities. The Indian pharmaceuticals have brought various changes in collaboration with the government. You can select from a range of healthcare segments. Here are some of the factors that affect the initial business of PCD and monopoly franchise in India:

  1. You should know about the market conditions. The demand for particular medicines is uncertain. You should have a rough idea of it.
  2. The economic condition of the state and nation. Some demands are affected by the economic condition. When the economy is good then only people will be able to buy quality products at a rate which is profitable for you.
  3. The Pharmaceuticals industry has various segments that support different sectors. You need to stud about them and know about their constant demand. For example, demand for diabetic medicines is higher than ophthalmic medicines.
  4. Make some future forecasts. Make some assumption out of research for better profit margin in near future.

How to Calculate Profit Margin In Pharma Franchise Business

Steps For Calculation Profit Margin For PCD/Pharma Franchise Business

Profits are the main driving force for any business and franchise business is any different. If you are looking for calculation steps for a profit margin for your PCD business then we are here to dictate you. For comparison purpose, have two or three companies on your list. Here take a look at the steps:

  • Calculate Total Cost: For this, you should have the complete idea of the total cost. In this indirect and direct expenses are added like manufacturing cost, packaging cost, material cost etc. if you do not have much idea about it then the company can help you known their total cost on each medicine. The formulation of total cost is as follows

TC or Total Cost = Manufacturing expenses + Administration expenses + Selling Expenses + Taxes + Other Cost (Total Fixed Cost + Total Variable Cost)

  • Take Out Margin Cost: It is also known as net rate or selling price, final price, net rate by many. When you have known the total cost. You need to calculate this. The percentage differs from company to company. you directly make an inquiry by asking the % given by the company. Here is the formula to calculate it:

Margin Cost = Total Cost X Percentage (%) of Margin

  • Calculate Profit Margin: Many call it Net Profit Margin, Net Profit Ratio or Net Margin. It is the profit that you get from the sales. Here is the formula for calculation purpose:

Profit Margin= Net Profit / Revenue Or Selling Price

*(Net Profit = Revenue – Cost)

Steps To Find The Actual Realization Amount Of Profit

You will get the above profit or revenue. There are some things that need to be added or deducted. Take a look at the following at this point to know what you can expect.
These will be added to the revenue.

  • Expenses like shipping expenses or transportation expenses.
  • Company offer like 10+ 1 or 10+ 2.
  • Expenses incurred during the period of realization of products.

These will be deducted from the revenue:

  1. Doctors Share under Price to Retailer (PTR)
  2. Profit Margin
  3. Stockiest share or commission.


Be careful while making any calculation. Successfully compare the companies. A good margin will serve as a gain for the business. Alisier Drugs is the best company in India to provide you good profit margin on the franchise. We will you luck for franchise business ahead.