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If a corner pharmacy takes its vitamins and adapts to to the digital word, it could grow up to become a stealth unicorn.

That’s the Pharmapacks story, Founded as a brick-and-mortar pharmacy shop in 2010, Pharmapacks has grown into an online reseller with FMCG such as Air Wic, Mr.Proper and L’Oreal.

Pharmapacks generated about $250 million in sales in 2020 by selling products mainly through large e-commerce marketplaces like Amazon, eBay, Walmart and Target.

What was the starting point

They were a mom-and-pop retail pharmacy in the Bronx in New York, about 12 years ago. Pharmapacks wanted to start selling products online, and ended up raising money from friends and family. Andrew Vagenas ( Ceo- Co-Founder of Pharmapacks ) raised about $750,000 to launch Pharmapacks online. Their first  warehouse in Queens  was 278 m2, right now they have a warehouse of 13099 m2. Which is just short of the size of 2 soccer fields

They made the decision to build a software, so they built all their own software internally. Their goal was to build software to tie into Amazon, because they thought that Amazon would be the largest e-commerce player in the next ten years - right bet isn’t it?

The strategy that they use

Pharmpacks is constantly scouting behind new brands in the FMCG space. When they find a partner they enter into a 3-5 year exclusivity contract to be used only on marketplaces.

They work with the brands, launch them on all kinds of marketplaces and market it right in the way. Currently they are mainly looking for the GenZ and millenials brands.

On average they launch 30 brands per quarter hence the rapid growth Pharmapacks is experiencing.

Not the normal way of working

Pharmapacks is one of the rare top sellers which do not use Fulfilled by Amazon to offload the logistics of shipping products to Amazon. Instead, they fulfill all of their orders themselves. However that can be explained by their diverse selling channels - not only is Pharmapacks one of the biggest sellers on Amazon marketplace, but they also sell on other marketplaces.

Aren't they being commoditized?

The way they look at it is: “We don’t have competitors”. The biggest part of their business is the partnerships with Amazon, Walmart and eBay.

Citation of Andrew:

We’re partners with them, we aren’t competing with them. We’re offering more catalog, and we’re offering more customer experience to their customers. It is already a fact that Amazon owns the largest part of the market, so we don’t see Walgreens or Rite Aid as our competition.

We see e-commerce as our main area to offer products, and as far as competition, Amazon speaks for itself on who they compete with.

Conclusion

This is also how we view the whole marketplace world. I see a Bol.com or any marketplace as a retailer like Delhaize or Tesco. For example, there you can also choose between 30 different cereal brands, but the question is do they take your brand? The "easy" part is to get your products on the shelves/marketplace, the hard part is to get your products off the shelves. This is exactly the same with marketplaces if you do it right you can generate so much additional revenue for your business.

Wondering how we make sure your products get off the shelves? Feel free to book a free 1:1 audit with us via the following link

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