NowRx is a full-service pharmacy that offers free medication delivery in hours. This includes controlled and non-controlled substances, over the counter medications – basically anything you’d find at your normal pharmacy. However, many wonder how we are able to stay in business offering free delivery.
Medication Delivery for Free
When somebody says the word free, we tend to become skeptical.
We think to ourselves, “There’s no such thing as a free lunch, what’s the catch?”
This applies to our business lives just as much as it does our personal lives. We believe that pretty much everything comes at a price.
So that begs the question, how is NowRx Pharmacy able to afford offering free same-day medication delivery?
Let’s take a look.
Supporting Same-Day Medication Delivery
First, for those that are unfamiliar with NowRx, let’s briefly cover what we are and aren’t.
NowRx IS a retail pharmacy that uses software and robotics to provide a better pharmacy experience, including (but not limited to) free same day delivery.
We are NOT:
- A third-party delivery service (Uber, DoorDash, UPS, etc.)
- A brick & mortar retail pharmacy (CVS, Walgreens, etc.)
- A mail delivery pharmacy (Express Scripts, OptumRx, etc.)
Why do these distinctions matter? Because brick & mortar retail pharmacy, mail delivery pharmacy, and third-party delivery services can’t adequately support same day delivery.
Brick & Mortar Retail Pharmacy
Brick & mortar retail pharmacy is based off driving foot traffic into their store and keeping them there so they can up-sell you on their additional products.
In fact, retail stores actually have metrics like “customer dwell time”, to measure how much time a customer spends in their store because they know the more time you spend, the more likely you are to make an additional purchase.
Ever wonder why CVS offers free flu shots or why it takes so long for your prescription to get filled?
They want to get you in their stores and keep you there because the longer you’re in there, the more likely you are to buy something.
Offering free delivery drives traffic out of these stores and runs counter to their long-term business strategy.
Mail Delivery Pharmacies
Mail delivery pharmacies are setup for delivery to your home but not for same-day delivery.
Deliveries typically take more than 3 days and sometimes as long as 2 weeks!
These services are designed for medications that you can afford to wait for in the mail. Additionally, they normally operate out of large automated facilities located out of state, which means there is plenty of room for things to go wrong or get lost.
Ever had a package get lost or arrive late through the mail? Exactly. In fact, our survey of mail order customers show that 1 in 5 have encountered some type of problem when it comes to receiving medication through the mail.
Furthermore, these pharmacies are often restricted in the prescriptions they can reasonably deliver. Some cannot offer delivery of Schedule 2 substances or refrigerated medications, or they charge an exorbitant fee to cover their shipping costs.
Third-Party Delivery Services
Alternatively, a third-party delivery service is set up for same-day delivery, but not free delivery.
Why? Because that’s how they make their money.
For example, Uber charges you per ride, DoorDash charges you per delivery, etc.
If these companies didn’t charge a fee, how would they make money?
Of course, these third-party delivery services could charge the pharmacy this fee and offer free delivery to the patient.
However, in the pharmacy business, margins are razor thin which means the pharmacy would not be able to offset that cost over the long term.
Furthermore, most third-party delivery services and mail order pharmacies are not set up to handle medications that require special handling, such as narcotics (DEA controlled medications), refrigerated, etc.
So, what’s makes NowRx pharmacy so special?
Enabled By Low Overhead & Technology
There are three main components that allow NowRx to offer free same-day medication delivery:
- Ultra-Low Overhead
- Automated Pharmacy Operations
- Tightly Integrated Intelligent Logistics.
Ultra Low Overhead
One of the biggest cost savings for NowRx comes from our low-cost DEA certified micro-fulfillment pharmacies.
As we previously mentioned, a brick & mortar retail store’s business model is based off driving foot traffic into their store and up-selling them on convenience store items.
As such, many of these stores pay for prime retail storefronts with monthly rent that can sometimes exceed $100,000 (15,000 sq. ft. x $7 per sq. ft.)!
Since NowRx doesn’t rely on foot traffic or need the room to stock convenience store items (e.g. beauty products, chips, etc.) we instead lease low cost commercial space (about 5,000 sq. ft. x $2 per. sq. ft.).
This means we pay about 1/100th the overhead of a traditional brick & mortar store.
Furthermore, because we deliver, we only need a single local facility, opposed to CVS or Walgreens, which require multiple stores to service a metro area.
In fact, we estimate there are 10 or more CVS stores servicing the same area as our flagship Mountain View location.
So not only do they pay almost 10x the rent of NowRx, but they also have 10x the number of stores to service the same area!
But servicing an area that size out of a single facility takes a lot of capacity.
How is NowRx able to handle that type of volume?
Automated Pharmacy Operations
Ever walk into a pharmacy and see the pharmacist furiously typing away on the computer?
Or maybe they’re in the back, counting out pills and checking on prescriptions.
The fact is, most traditional brick & mortar pharmacies are dramatically understaffed and rely on manual processes as well as outdated technology to function.
This makes them slow, frustrating, and prone to error.
At NowRx, our proprietary pharmacy management software (QuickFill) automates the unnecessary manual work.
With a single click, our pharmacists can route prescriptions to our dispensing robots which count, label, and bottle medications in under 25 seconds.
Additionally, this dispensing robot, a product of NowRx’s growing partnership with Parata Systems, reduces dispensing error rates to less than .01% making NowRx more than 1000x more accurate than the average community pharmacy.
In total, these cost savings add up to more than $10 saved per prescriptions dispensed compared to a traditional retail pharmacy. But delivery is still expensive right?
That’s where the integration between QuickFill and our logistics platform (Wheelz) comes in.
Integrated and Intelligently Optimized Logistics
NowRx Pharmacy’s prescription management system [QuickFill] and driver-side logistics platform [Wheelz] are tightly integrated, which allows them to intelligently optimize logistics and keep the cost per delivery affordable.
What does that mean? Simply put, “QuickFill” and “Wheelz” closely communicate with one another to prioritize prescriptions for processing and maximize the number of deliveries on each route.
For example, suppose QuickFill has 150 prescriptions in the queue ready for processing and Wheelz has a delivery route scheduled in north Palo Alto.
By having a tight integration between the two, QuickFill can identify and prioritize the prescriptions that are in that area (or on the way), while Wheelz intelligently produces the most efficient route that will maximize the amount of prescriptions being delivered.
Pretty cool right?!?
This is incredibly important because if NowRx was unable to maximize the number of prescriptions being delivered per route it would be impossible for us to offer free same-day delivery over the long run or at significant scale!
This is why you see pharmacies like CVS charging $7.99 for same-day delivery, $5 for 1-2 day delivery, or a monthly subscription service!
Without customized software, specifically built for prescription delivery , they cannot offset the cost of delivery like NowRx!
Offering Free Same-Day Medication Delivery is a Better Customer Experience
Ok so we’ve convinced you that we save a lot of money compared to other pharmacies.
But, even with all these savings, providing delivery (as well as other customer benefits) still costs NowRx something.
Why offer it for free? Well, we believe the retail pharmacy industry is changing.
Customers want better prices, better convenience, and better service.
We see this in other industries as well.
People don’t want to wait in line for movies, they use Netflix.
People don’t want to wait for taxis, they call Uber.
With that in mind, we’re happy to absorb the cost of delivery to improve the experience for our customers because these same customers will return that cost 10-fold by advocating for NowRx.
In fact, that’s exactly what a lot of our customers do!
They talk about NowRx and spread the word. Telling everyone how much better their experience with NowRx was compared to their normal hassle at CVS. They say they would NEVER switch back to their old pharmacy.
Just read the Yelp reviews from our original Mountain View location.
Our happy customers return the cost we incur from providing delivery 10-fold because they are so delighted with the better pharmacy experience that that they happily tell anyone that will listen!
Call it a marketing expense if you will – a cost we happily incur to provide a better experience for our customers.