Lately, Ayurvedic pharma products seem to overwhelm the pharma industry. Due to its blend with ancient and modern science, the industry is performing outstandingly. The growth rates have encouraged many entrepreneurs to invest in the industry. Most of the time they are unable to decide whether to go for ayurvedic PCD or third-party ayurvedic manufacturing. They consider both terms equally and get more confused. That is the reason we have come up with another informative blog, which will clarify the difference between the two terms. Also, this blog will disclose how to approach a leading Ayurvedic PCD company for negotiation. Let’s dive in.
Key Difference Between Ayurvedic Pharma Franchise and Third-Party Manufacturing
Ayurvedic PCD stands for the propaganda-cum-distribution franchise model. It’s an umbrella version of business. Which means under one roof you get multiple advantages. You act as a brand ambassador of the franchise company. You are supposed to sell the products that are owned by a franchisor with the advantage of monopoly rights. Whereas the third-party Ayurvedic manufacturing refers more to the ownership business model. In this model you have the leverage to get your product produced and sell it under your brand name and identity. In both scenarios you can scale the business, but the third-party manufacturing model is easily scalable because the distributor is not dependent on the product availability. Let’s have a look at some of the key differences that bring more clarity to the table:
Ownership VS Branding Model
Ayurvedic PCD: In this model you will approach the franchise owner and ask for an alliance. Upon the legal formalities and agreement on terms and conditions, you will be legally bound to sell the products that are provided by the franchisor. It’s almost like working as a branding ambassador in your selective territory.
Ayurvedic Third-party Manufacturing: This business model is more about owning the brand. You will approach a third-party Ayurvedic manufacturing company and outsource your production requirement. Instead of selling their products, you will have the leverage to sell your own products under your brand name, and you will be in charge of controlling the pricing division as well.
Controlled VS Open-Source Monopoly
Ayurvedic PCD: Once you attain a legitimate franchise opportunity, you are bound to sell an exclusive range of products in a selective territory only. The brighter part is you cut to the chase and become an exclusive seller of the highly demanded product. The other plus point is that no other distributor from the same company can sell the same range of products in your designated territory because you hold the exclusive monopoly rights.
Third-party ayurvedic Manufacturing: This business ideology breaks the boundaries and works as an open-source monopoly model. Any one are not bound to sell the products in any restricted region, town, or city because you own the product. You can sell the product wherever you want to sell it. You will be in charge of distribution, and if you have numerous outlets, then you can decide your own monopoly rights.
Differentiate in Investment Level
Ayurvedic PCD: You can start with a lower level of investment in the PCD business model. The estimation is Rs 50,000 to Rs 100,000 as a starter you may need to spend. This model is ideal for a distributor or a marketer. In return you will make a huge profit margin.
Third-Party ayurvedic Manufacturing: This model demands a huge amount of investment because the third-party manufacturer will produce goods on an MOQ (Minimum Order Quantity) basis.
Rigorous Marketing Vs Hands-free Marketing
Ayurvedic PCD: You have to carefully market the product. Your free wish can’t be imposed in such a business model because you are selling someone else’s brand under a mutual agreement. In this you have to go by the books.
Ayurvedic Manufacturing: You lead the way in the third-party Ayurvedic manufacturing model. The manufacturing part will be looked after by the manufacturer, and your job will be to brand your product. Either hire a marketing expert or use AI to generate marketing strategies and implement them for fruitful results.
The Conclusion
We have explained the key difference between the Ayurvedic PCD and Ayurveda third-party manufacturing processes. Now you can think about a model and make your move accordingly. Both have different processes for business; brainstorm and select the path that suits your pocket. For better understanding, get in touch with the expert team at Velnex Medicare (a leading Ayurvedic manufacturing company). They deal in both the PCD and third-party manufacturing model. Schedule a meeting and explore your cards.
FAQ: Frequently Asked Question
Can I invest in both models?
Yes, you can invest in both business models. If your sources and pocket allow you and if you can manage both responsibilities.
What is the cost of third-party manufacturing outsourcing?
The cost varies depending on consignment size, types of products, and the tenure duration. These things can be discussed over the table.
How to calculate the margin percentage?
The easy way to calculate the margin is:
Profit
Margin % = ____ X 100
Selling Price