[Startup Bharat] Vadodara-based PharmaCupboard helps pharma, allied businesses sell surplus inventory online
Technology has changed the way every industry operates, and pharma is no exception. While B2B and B2B pharma startups proliferate across the country, Vadodara-based pharma e-marketplacestands out due to its business model: helping businesses trade surplus inventory.
Meet Founder Suresh Purohit , who launched his venture in 2016. The startup is a pan-India e-marketplace for inventory liquidation and helps pharmaceutical, biopharmaceutical, chemical, and all other allied industries to trade their excess inventories.
An engineer and MBA, Suresh worked in the pharmaceutical industry for 14 years and realised the problem that pharmaceutical and chemical businesses faced: surplus and trailing quantities of materials due to product change-overs and other internal/external conditions.
Such inventory – that can often be used by other industries – is most often wasted.
“The idea of PharmaCupboard was to fill this gap by providing required information and materials to companies that could effectively use them. It works on the sharing economy concept that enables buyers and sellers to perform mutually beneficial transactions,” Suresh tells.
E-marketplace for selling surplus inventory
Suresh says PharmaCupboard provides inventory liquidation services for non-moving, slow-moving, and trailing quantities of materials. These are sold only when the products can be used by buyers in a legal and economic way. Surplus materials should not be of scrap grade; they must be in usable condition for buyers.
The startup allows sale of materials such as active pharmaceutical ingredients (APIs; bulk drugs with minimum six to seven months balance shelf life), excipients, intermediates, key starting materials (KSMs), solvents, flavours, catalysts, by-products, chemicals, and packing materials.
Users can search for the listed products by typing the name or chemical abstract service (CAS) number of the product in the search bar.
Suresh Purohit launched PharmaCupboard in 2016. It is a pan-India e-marketplace for inventory liquidation and helps pharmaceutical and allied industries to trade their excess inventories. [ Image Credit: PharmaCupboard]
“Recently, we have also started facilitating the sale of equipment and instruments for high-performance liquid chromatography (HPLC) and gas chromatography (GC),” Suresh says.
PharmaCupboard was nominated at India Pharma Awards for Digital Pharma Innovation by CPhI India in 2017 and 2018. In August, it was recognised as one of the 10 Best B2B Marketplace Startups in India for the year 2020 by StartupCity Magazine.
Speaking about the benefits of starting up in a non-metro city, the founder says small cities have “lower overheads, less traffic congestion, and offer a better life”.
Suresh adds that Vadodara has the advantage of being near prominent cities such as Ahmedabad, Ankleshwar, and Mumbai, and also has direct connectivity with Delhi, Hyderabad, and Bengaluru.
The fact that Suresh had an office, owned by his father, helped facilitate operations.
“PharmaCupboard has a very small, energetic team of four members. The startup has been created in a manner that it can be operated from anywhere in India with a mobile handset and internet connectivity,” he says.
The startup helps industries liquidate their surplus inventory of APIs, excipients, solvents, catalysts, and chemicals [Image Credit: PharmaCupboard]
Business and operations
Speaking about the business model, Suresh says buyers need to register with the company and share a valid GSTIN. The startup charges them Rs 1,950+ GST, which enables allows the companies to purchase products. This is valid for six months.
After the validity period is over, buyers need to pay again to gain access to the platform in case they wish to make new purchases. The startup also provides a complimentary package of seven days to new registered users to allow them to get acquainted with the system.
The model differs for sellers. They need to purchase packages in order to list 25, 100, or 500 line items. Following the purchase, sellers can upload their products with a validity of three months to six months. PharmaCupboard also provides customised premium and year-long consultancy plans.
“The sellers need to fill up a product template detailing the products they wish to sell. They can also upload the products by themselves or let PharmaCupboard do it. Usually, we charge Rs 200 per line-item plus GST. There are different packages for 25, 100, and 500 line items.
“After payment, the products become live, making all information available to buyers, who can submit their price against the respective product and can also ask the seller for additional information. Once a buyer shows interest by filling a form, the entire chain of ‘lead to deal’ takes place,” Suresh explains.
The startup currently claims over 700 users, including traders, dealers, and small to large-scale pharma and chemical companies. It counts companies such as Lauras, Mankind, Glenmark, Emcure, and Cipla among others as its clients.
Suresh says initially some sellers were hesitant to pay in advance for listing their products. A “premium service option” was created where the seller was charged a professional fee on the actual sale of the product; this needed to be paid after products were sold.
PharmaCupboard also launched a model to manage and facilitate the seller in timely payments and maintaining a customer database.
“In November 2018, we started PharmaCupboard Power, a platform for online real-time auction. It is a secured system as it is hosted on Google Cloud and requires a Google account for authentication. It enables buyers and sellers to complete transactions quickly with firm decision-making,” he says.
Plans for the future
The founder revealed that the bootstrapped startup was launched with an initial investment of Rs 5 lakh. PharmaCupboard is now open to raising funds and entering into partnerships with relevant industry players.
Suresh says PharmaCupboard is growing at an average rate of 20-22 percent annually.
“We have been able to help pharma and chemical companies liquidate around 100 MT (i.e 1 lakh kg) inventory every year. We expect to double transactions by next year. By large, COVID-19 has not impacted our business.”
The startup is now looking to strengthen its presence in the country.
PharmaCupboard, which has a strong presence in Western, Northern, and Central India, wants to expand its footprint in Southern India. It is also eyeing international markets in the next couple of years.
According to several media reports, industry estimates revealed that the excess inventory market in India was estimated at $30 billion in 2019.
“Our competitors or prospective collaborators are unorganised sectors. There are thousands of traders and players who operate in silos. Our idea is to expose them to business opportunities. We are transparent and powered by technology, which makes us stand out from others,” Suresh says.