Online chemist proves a bitter pill for Boots

by Rebecca Burn-Callander - Tuesday, 18th March 2008 -

When you’re under-cutting high street by up to 90 per cent, you’re bound to ruffle a few feathers.

Mitesh Soma only launched Chemist Direct in November 2007. But the website already stocks a range of over 20,000 products, with over 30,000 unique visitors hitting the site every week.

It’s Soma’s tiny prices that are attracting customers in their droves. “Look at the price of most products in high street chemists. The margins are just ridiculous!” says Soma. “They buy products for 30p and sell them for £10!”

“I sell them for £1 each. I’m still making a healthy profit.”

Chemist Direct is churning out 400 orders a day at the moment. Turnover will hit £3m this year. “That’s a conservative estimate,” says Soma. “We’ve already made £750,000 since November.”

Needless to say, the high street’s not happy. And they’re playing dirty.

“Boots lodged a complaint with the Medicines & Healthcare Regulatory Agency (MHRA) because we hadn’t put the “Always read the label” warning on very page on our website,” says Soma. “All of our products carried the warning, and most areas of the site carried it. It was quite petty really. Though, we rectified it immediately.”

And it’s not just the retailers that are kicking up a fuss.

“We used to buy pregnancy tests from a supplier who, incidentally, worked with Boots as well,” recalls Soma. “We were charging £1.29, Boots were charging £4.99. They cost under a pound to buy wholesale.”

“We got a letter from this suppler, saying: ‘We support independent pharmacies. Your website threatens their livelihood.’ They didn’t like the fact we were charging such low prices for their products. Needless to say, we found a new supplier. And they’re cheaper. We only pay 30p per pregnancy kit now!”

www.chemistdirect.co.uk

Picture Source

WHAT NEXT?
Sign up for our newsletter and get our weekly pick of business news in your inbox!
Subscribe to our magazine for in depth interviews and advice from leading entrepreneurs!
Join our forum and talk business with other entrepreneurs!