Advice You - Business

Drop shipping differs from traditional wholesale trading in that it is a form of ‘just in time’ shipping. Basically, drop shipping means that the online seller will

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

order the product from the wholesaler as and when customer orders are received. The seller simply receives the order and passes on delivery information to the wholes

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

Examples of combination products may in

aler for delivery. The customer pays the seller, the seller pays the wholesaler and the seller earns the profit from the difference between the sale price and the co

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

st price. So, the product does not pass through the hands of the seller at any time, and goes directly from the wholesaler to the customer in the drop shipping model

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

.

The traditional wholesale trading method implies that the seller orders a stock of the product from the wholesaler and maintains this stock to service customer de

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

Combination pro

and. The physical possession of the product is the differentiating element. This clearly has a cost associated with it. Firstly, there are storage costs, which can b

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

e daunting if the product occupies a large amount of space. Secondly, there will be shipping costs from the wholesaler to the seller. Additionally, there is the cost

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

of carrying unsold stock for a long period of time that eats into profits from sold goods.

So suddenly, drop shipping seems like a great idea. But drop shipping ha

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

s its drawbacks too. In most cases, especially if you are a small business, you will pay the full MSRP, which will squeeze your profit margins. Additionally, you may

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

have little or no information on the status of your order from the wholesaler, affecting customer service levels. Since you are essentially passing on the cost of c

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

rrying inventory on to the wholesaler, you will be charged for it. But, on the upside, you will only need to pay when you receive customer orders.

Reliability is an

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

Following aspects would a

issue when drop shipping – as a seller, you will be able to control and track your product’s delivery much better if you hold inventory. In case of drop shipping or

dd to the challenges in developing combination products:

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

ders, the seller relies on the wholesaler’s delivery system, which may be surprisingly lax. Finding a reliable wholesaler is a critical task on its own.

If you are

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

worried about the label on the box that is shipped to the customer, you may be pleasantly surprised to find that many wholesalers will include your packing slips and

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

labels when they ship to your customers.

A couple of hybrids exist that are useful to know about: Buying from local wholesalers and hiring fulfillment houses. An a

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

ternative to carrying inventory and drop shipping is to buy from nearby wholesalers when you receive an order and ship it out immediately. Amazon started this way, b

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

Professional from academic institutions, pharmaceutical industries, health care indust

ut it works best for small start up businesses. The other option is to make a deal with a fulfillment house. This is an intermediary service that offers to maintain

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

small amounts of inventory, assemble, order fresh stock, pick, pull, pack and ship out your product in accordance with your instructions and using your packing mater

.

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

ials. A fulfillment house may provide a shopping cart online and customer call center, depending on the scale of operations. They will charge a fee based on various

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

Companies that provide selfless information through particip

factors – amount of storage capacity etc, and may charge a small percentage of commission on sales. This model may work best if you are a seller of high margin 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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