Is Your Front End an Asset or a Liability? – The Bottom Line Pharmacy Podcast
Does your over-the-counter section of the store give patients the impression that you are a thriving or a dying pharmacy? Are the items on your shelf driving traffic into or out of your pharmacy?
On this episode of The Bottom Line Pharmacy Podcast, the team (Bonnie Bond, CPA, Kendell Harris, CPA and Scotty Sykes, CPA, CFP®) welcome Kris Rhea, Head of Pharmacy at BIOLYTE®,* to discuss how independent pharmacies can offer OTC items that attract and help patients, have better profit margins and consistent revenue streams.
*BIOLYTE® is not a client of Sykes & Company, P.A. and no employees of Sykes & Company, P.A. were compensated to talk about this product. The Bottom Line Pharmacy Podcast is for educational and entertainment purposes only.
The Bottom Line Pharmacy Podcast is your regular dose of pharmacy CPA advice to fuel your bottom line, featuring pharmacists, key vendors, and other innovators.
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Bonnie: Hello, and welcome to another episode of the Bottom Line Pharmacy Podcast. Today, obviously, we have our normal guests here, Scotty and Kendell from Sykes & Company, P.A. and me, Bonnie Bond. And we also have with us today the head of pharmacy at BIOLYTE, Kris Rhea. How are you doing Kris?
Kris: Hey Bonnie, thank you guys for having me.
Bonnie: Yeah, we are super excited. We are, you know, trying to take this podcast… completely different subjects every time we do it, different areas of pharmacy. And we met Kris and his company at a lot of the trade shows this year, this summer, and you guys-
Scotty: Popular booth.
Bonnie: Definitely a popular booth. Definitely saw lots of people going around with those BIOLYTE bottles. I tried one myself for the first time, we were all doing that. So, tell us a little bit about what you do, Kris, at BIOLYTE and kind of what you guys are all about.
Kris: Right, yeah. So, I have been in independent pharmacy for about a decade now, first with a wholesaler. And I met the owners of BIOLYTE in Atlanta and loved the product. I was always trying to find solutions for pharmacies and, you know, good products that were different and for the front end and decided to work with them after several years of seeing how my pharmacies were doing with it. And so now my whole goal is to educate our independent pharmacy community on how they can integrate BIOLYTE into their front end and utilize it in their community.
Bonnie: And you mentioned front end, and that is huge in pharmacy right now. I think we definitely are seeing people move away, we have talked about this a lot on the podcast, from just filling scripts in a pharmacy, obviously wellness and all sorts of different other services that you can provide to the community. And obviously everybody has, you know, the normal OTC items, and obviously we have a lot of people with gift items, but this is actually taking it to a level of offering, in my opinion, something out front that is actually still, you know, dealing with care and wellness of the patient. So, something that they can deal with, you know, that they need. Maybe they are picking up their script for some sort of sickness. This is sort of a supplementary type of OTC item.
Kris: Right. You know, these customers are coming into these pharmacies because they are trying to recover from something, right?
Kris: And what I am trying to do, and what I am hoping these stores understand is, with all the challenges on the back end, you know, that front end can be seen as an asset. It is not a liability. You need to take advantage of that real estate and offer solutions and become a healthcare destination, to be there to educate their customers on how products can create wellness in their life. And you know, I think that the more stores get excited about that, the more they are going to be sustainable in this challenging economic period.
Scotty: Kris, you mentioned educating the pharmacies about that front end. Can you kind of elaborate on that and what you are trying to get across to pharmacies about their front end and how BIOLYTE plays a part in that? You know, that front end can be very valuable. We see pharmacies all over really can turn their front end into a very valuable component of their pharmacy, especially with niche products, products you cannot get elsewhere such as a BIOLYTE. I do not think you can really get that everywhere. And so, can you kind of talk about how you are educating pharmacies and how you are trying to get your point across about why a niche product like BIOLYTE is a good fit?
Kris: Right. So, you know, that front end can either be a bridge from a customer perception or remote. So, as they walk in that door, I have walked in about 2,000 of them… how that portrayal of that… are you an education center that is really connecting to your patient population? Or are you, you know, someone that is just barely hanging on? So, first of all, you know, what is the perception of your store to your customers? Two: with COVID, kind of growing pharmacies… opportunities– from a point-of-care testing standpoint, from a collaboration standpoint, with other healthcare professionals. You know, how to maximize products like BIOLYTE or nutraceuticals when you are doing these tests or doing these education opportunities with your customers. So, say somebody comes in, they feel bad, and you do a flu, strep, COVID test on them, okay, yeah, they are positive. Now what? You know, I would have some solutions, some bubbled packaging there to say, “This is what someone that has tested positive needs to be using the next, you know, week,” and BIOLYTE and Tamiflu, you know, all those things can be opportunities for you to increase your cash-based revenue.
Scotty: I guess we never kind of, well I guess we kind of never, what is BIOLYTE? Did we cover that? I mean, did we miss that?
Bonnie: Yeah, we need to do that.
Scotty: I do not know.
Kris: So, yeah, it is essentially… what it is, is it is a drinkable IV bag that an anesthesiologist made when his wife had breast cancer.
Kris: You know, essentially, he was trying to help her, you know, battle the fatigue, the nausea, and then flush her system of the chemo drugs. So, he created it out of love, and now independent pharmacies are using it from everything from, you know, cold and flu and COVID and stomach bugs, all the way to muscle cramping and heat exhaustion. So, it is-
Scotty: And hangovers.
Kris: And hangovers.
Scotty: You know, if you were in Las Vegas, there was a good old hangover line.
Bonnie: Yeah, I will never forget us being at, it was years ago, we were at breakfast one morning, which is when, you know, all the people are finally coming in from their night on the town. And we were sitting next to, I think
Scotty and I and Ollin were sitting next to these girls who were hooked up to IV poles at breakfast. Blew my mind.
Scotty: Just get a bottle of BIOLYTE, right?
Bonnie: But now you do not have to do that anymore. It seems a whole lot more simple.
Kendell: I am sorry, how much BIOLYTE do you have to take to get those benefits? Is it something like you have to chug a couple of bottles or how much?
Kris: No. So, Kendell, one bottle equals six to seven sports drinks from an electrolyte perspective. So. you know, it is intense electrolytes and that is what people notice. You know, it tastes different, but the only difference in actual getting an IV and this is, you know, obviously it is going through your intestinal wall, so it takes about 25 minutes to work. But the benefits of rehydration and kind of eliminating those symptoms that you are dealing with are there. You know, it is funny because some of the stores, they think, hey this is a marketing gimmick, and they kind of, you can see the cynicism in their eyes, but I say, look I am going to leave some samples with you, just trust me. You know, give it to some of your customers or use it when you need it. And we usually make believers out of them after they try it.
Bonnie: I know I spoke to many pharmacists at the show, and then even some of our clients recently, who carry your product, and they all spoke very highly of it. I mean, they use it themselves. They are like, “I drink it every day.” They love it. But just looking at your website, you know, you can definitely see that this is touching athletes, obviously those that are sick that need, you know, again I am thinking about you know, stomach viruses, flus, cancer patients I saw. So, it seems like it could really touch a lot of different, you know, people with the population in the community. And obviously on a pharmacy perspective as far as income, this is obviously a cash. So, anything that pharmacists can offer out front like that that you do not have to worry about insurance claims and things of that nature is always a plus.
Scotty: High margin cash.
Kris: There you go. Yeah, I think that you touched on the versatility of the product. I always talk about, you know, how this is kind of a Swiss Army knife of front end because it has so many applications, and then what I really like try to do is teach these folks how to really be creative and utilize products like this by going to some of the community partners that they want to do business with. So, say you want to do flu shot clinics with a factory down the road, you know, taking some over there and saying, “Hey, I know you have OSHA compliance around hydration here at the factory. You know, by the way we do flu shots.” Or going to the hospice company down the road or the long-term care facility. There are just so many opportunities to take some of these niche products into community members and say, “Hey, we stock this, you are not going to get this everywhere. By the way, we do all these other clinical services that you might benefit from.” And I have seen some of the more creative pharmacies say, “Yep, I am going to take that and run with it.” And it has opened some doors.
Bonnie: Yeah, I work with a lot of startups. One in particular was talking to us about this specific product a few weeks ago. They were using it to, you know, they said they had purchased a lot of it but they were using it as a giveaway, as they had new, you know, customers coming through the door, “Hey, you are not feeling well, here is your script. Try some of this, you know, come back again, try some of this BIOLYTE. I think it will help you feel better.” And using that kind of on a two-pronged approach there. But you know, having them come back. Hey, they gave me something for free, but then also maybe having them love the product as well and see the benefits from it.
Scotty: I have also seen pharmacies do like bundle boxes. So, like if you come in the pharmacy with the flu, they will have a package ready for the flu, you know, whether it be Kleenex, you know, whatever, BIOLYTE in there, or some vitamins, things like that. And you know, you take the bundle box home, it has got everything you need to get through the flu. So, that is really neat and convenient. We have heard some success around that as well. So, it is kind of really thinking outside the box, really, and how to get creative with that front end and taking care of your patients and being that wellness center in addition to just filling those prescriptions. You know, we have got pharmacies that folks will, when they walk out the pharmacy, they have got supplements in that bag. They are going to be, you know, they are not just walking out with scripts. They got script and supplements going in there. So, and those supplements have great margins to them. So, that front end can really be a great asset, like you said, Kris. I am curious. You said you have been through to about 2,000 pharmacies. I am sure you have seen a couple pharmacies that you have walked into and it looks like, you know, you are going back to the 1800s with the mortar and pestle back there, but talk about kind of what you see in terms of the pharmacies and looking alive and looking, you know, up-to-date, versus those pharmacies that are kind of still stuck in the way back, and they are just not modern-looking pharmacies, and how that can perceive to patients and customers.
Kris: So, it is crazy. It is all over the board in terms of what you see and obviously everybody is dealing with the same challenges that they cannot control. And to me it is all about mindset. You know, what are you going to do with this information? Are you going to be a victim or are you going to take back control on what you can control? And I have been in stores where literally, you know, it is dusty, there is nothing on the shelf, and I am scared that, you know, hey, why would anybody fill a prescription here? Then you go into other stores that are just, it is, the atmosphere is unique and lively and they have the soaps there and as soon as you walk in the door you have, you are smelling like the homemade soaps of the vendor they have in town and then they have, you know, just everything is polished and the music is playing. It is just a different environment. So, what I encourage people to do is try to get outside of the store and take a look, because they are in it every day and they sometimes do not notice. But maybe ask some people like, “Hey, what is your perception when you walk in the door?” Because I have seen everything, and I think it makes a big difference in how you design the front end and how you get your staff to engage with their customer base. And I think it is the difference in sustainability or not.
Bonnie: Yeah, and I know you can, you know, I think a lot of pharmacists sometimes feel like, and I know we have had some clients in this situation, where they feel like, you know, your OTC section is just some something you have to have. I mean, you have got to throw some, you know, $5,000 out there and at least have some Band-Aids and some Aleve, you know, whatever. It is just something you got to do. Maybe, you know, changing that mindset and that approach to using that. I think you got to at this point, I mean, you know, the way things are now, you have to use it more, like we have said, as a wellness, you know, supplementary-type offering at your store. And then using that to gain a relationship there with your patients as they come in, and they are sick, and offering them options beyond the script to help them. And so having those things, and especially these newer things outside of the box that can help, I think just helps with the relationships of the pharmacy as well.
Kris: Yeah, Bonnie, when I was working for the wholesaler a lot of times I would recommend maybe cutting down on the footage of your traditional OTC sections.
Kris: And not offering orange, blueberry, you know, all the different colors and flavors that sit there and expire. So, cutting it down, bringing in some of these niche products that are more solutions-based and around your consultation. So, that would be my takeaway listening to this is, hey, find some different things, cut down on the traditional stuff. And a lot of times pharmacies, you know, say, “Hey, this stuff is just not going to sell in my community. My market does not have the money.” Well you know, a lot of times people are just looking for solutions and they are going to buy it somewhere, and you cannot be passive. And stores are just scared of like, well, I do not want to be pushy. Well, you are not being pushy. You are offering solutions for health and wellness and that is why these people are coming to you, because they want to feel better. So, think of it that way and encourage your staff. Give them the proper education and motivation to be able to connect these products to your customer base.
Bonnie: Yep, well that sounded like a great bottom line from Kris. What do you have Kendell? What is your bottom line?
Kendell: What do I have? No, I think those are all awesome, awesome points. Bottom line, I think, I like what you said about the out front OTC being the bridge. So, you really have to think, I mean, a lot of times the pharmacy counter is split physically in the back of the store, so the pharmacy… So, what does my bridge look like?
Kendell: Does it look inviting with products that are going to lead me to wellness, or does it look shoddy, where somebody is like, “I am not crossing this bridge.”
Bonnie: That bridge looks old.
Kendell: That bridge looks old, that bridge, like you said, looks dusty, has a whole bunch of products that I do not need, I am not going back there. So, I think my takeaway, my bottom line, what I have learned from Kris today is you have to make that bridge about wellness and about making the consumer—the client—feel better and they will have trust across that bridge and then to pick up prescriptions. So, just make sure your out front is a nice, nice bridge people feel comfortable going over.
Bonnie: Scotty, you got anything?
Scotty: For sure.
Bonnie: Your bottom line.
Scotty: My bottom line is how do I get some BIOLYTE because I got a cold and I need something.
Bonnie: You do need it. Oh, he is muting himself. That is good.
Scotty: Excuse me.
Kris: Scotty, coming your way buddy.
Scotty: Yeah, man, I would love some.
Kris: You are a friend of mine. You are never going to be BIOLYTE…
Scotty: I thought it tasted delicious, to be honest. You know, some people did not like it. I loved it.
Kendell: I liked it, too. I liked it, too.
Bonnie: Those guys were chugging those things at the trade show.
Scotty: They were, they were, boy. But no, I think my bottom line is, you know, that front end I like how you said it to begin with, that asset, that front end can be an asset. Invest some time and effort into that front end. Find those niche products, find how you can fit it into your community, your patient base, find what works, invest in it, and turn that into some value, that front end for sure. And I like,
Kendell, how you put it too. That is a great, great point.
Bonnie: Yep, yep, absolutely.
Kendell: And I do have a question. If I am a pharmacist, where do I get a sample? How do I get my first supply?
Kendell: I mean, how do I get something I can taste and to let some of my clients taste? What is the process like?
Kris: Yeah, Kendell, if they reach out to me I would be glad to send them samples because we want the stores to try it and get behind it, and then it is stocked in all the major wholesalers now.
Kris: So, they can order it directly from their full line wholesaler and get going that way. And we have free point of sale material signage to kind of educate consumers. So, we do not want it just to sit and gather dust. So, we will be glad to send that to them as well.
Kendell: And for pharmacists, I do not know how much you can share, but how would you anticipate this impacts your bottom line? When you sell a bottle, how does that impact the bottom line of the pharmacist? I am sure they are curious.
Kris: Sure, it is over 40% margin. All cash, cash-based. We have stores that sell, you know, five cases a month, and then I had one that sold 7,000 cases last year and made a quarter million dollars off of it.
Bonnie: There you go.
Kris: It is kind of like anything, how you get behind it and, you know, how you utilize it in the community. So, it is just something you can play with and have fun with, and it is a fun brand that it is not stocked everywhere. So, independent pharmacies have a unique opportunity right now.
Kendell: And you kind of got me perked up when you said 7,000 cases. I believe it was a quarter of a million. Got me really perked up. How much education does my team need to know how to talk about the product and to get people’s interest into that? How much education does my team need and what resources will I have, because you know, [joking] I am looking to get 8,000 cases now, after what you said.
Kris: There you go. Yeah, so obviously they can reach out to me. We have a digital marketing kit that, you know, they can use on their social media pages. We have some bag stuffers, trifolds, that kind of… connect hydration to the different seasons and conditions. I love talking to the staff and I loved helping them utilize it and talk to providers or you know, long-term care facilities. So, you know, I would encourage and challenge the stores to utilize me because I have been in the industry and I want to be an active partner with them.
Scotty: And Kris, you did mention the staff and how that is important. I think pharmacies really should invest in their staff as well for training and for really sales. You know, if someone is coming to pick up that script for something and you are like, well you know, some BIOLYTE or whatever supplement would be a great addition to this or something like that. So, kind of getting that staff educated and trained and pulling them into the sales process, I think, can be very valuable as well. And something that is overlooked, I think, in a lot of pharmacies.
Kris: Oh, definitely. You know, I walk in the store, and obviously I am there to kind of leave some samples, but they do not know I am not a customer or a potential customer, and you can walk up and see someone sitting on their phone and they do not engage with you, or you can see someone that is greeting you and really is interacting with you and trying to find solutions for you. So, utilize your staff, train them so they feel confident in what they are speaking to. Incentivize them, utilize technology, whether it be workflow, tagging, IVR, there are just so many things that are out there that you can really do to take back control of that front end and try to make your store more sustainable.
Bonnie: Yeah, that would be my biggest takeaway, I think figuring out, if I was a pharmacy owner, would be figuring out my community, maybe the seasons and how, you know, summer can be, you know, the heat could be a bigger deal in some areas than others and you can play on that some. And then obviously being a pharmacy wellness scenario you can play on the sickness all year ’round, because that is going to help with all different sorts of scenarios. But just figuring out your community, the people that are walking through your door and what makes sense to market to them. And then like you said, I have not even considered the employees, but making sure they understand how to sell the product and understand the product, they have used the product and they are excited about the product, so they are able to educate the patients as they come through the door. Well, we certainly appreciate you talking with us,
Kris, this morning. We learned a lot-
Kendell: Thank you so much.
Bonnie: About the product and about the whole out front scenario for any project, really.
Scotty: Yeah, it is an important discussion, because again, I think it is often overlooked that front end is not taken advantage of like some should do it.
Bonnie: Yep, absolutely. We appreciate your time.
Kris: Thank you guys.
Scotty: Thank you, Kris.
Kris: I will see you at the next show and I will have a couple cold ones waiting for you.
Bonnie: Sounds great. We are signing off for The Bottom Line Pharmacy Podcast. See you. Until next time.