The Potential Doom of the Oligopoly in Pharmaceutical Distribution: How Amazon Can Hurt the Big 3’s Future for Profit & Sales Growth
PROFIT & SALES GROWTH
ONE’S COMPANY, TWO’S A CROWD, THREE’S A PARTY AND FOUR’S A…?
1. Amazon built its empire on pitting companies against each other and, when convenient, leveraging that data to get into the business themselves (i.e. “Ships from and sold by Amazon”).
2. There is no expectation from Amazon to earn profit, like the constant pressure on each of the Big 3. Amazon is only interested in growing sales revenue. If Amazon took just 10% of revenue from the Big 3, Amazon revenue would increase by 20%.
3. At 100+ warehouses in only the US, they already have more locations than the Big 3 combined.
4. Their increasing investment into transportation (e.g. robots, a license to ship ocean freight, and their potential run at an in-house airline) has the potential to beat whatever deal UPS or FedEx or DHL can offer as well as their in-house distribution capabilities.
5. Pharmaceuticals are easier to ship than the wall mounts, car parts, bikes and furniture that Amazon has become an expert in moving.
About Pharma Solutions
Pharma Solutions is a leading pharmaceutical compliance services firm that uses experience, relationships and knowledge to develop custom solutions for their clients. The company provides numerous services including VAWD Accreditation, state Board licensing and federal registration. Five Rivers helps third-party logistic firms, distributors and manufacturers in the pharmaceutical industry focus on their supply chain while reducing costs, enhancing efficiency and improving quality. Five Rivers is committed to helping their clients thrive and to providing peace of mind.