The results were alarming. That's what I concluded after examining contact lens orders from eye-care professionals all over the country.
As director of sales and marketing for a leading, independent contact lens distributor, I have access to hundreds of thousands of order histories. Hoping to get some useful information about contact lens order patterns, I conducted an analysis of our records and came up with several troublesome trends. The three leading order patterns showed me that, apparently, many optical dispensaries don't mind losing profits, wasting staff time, and missing out on customer traffic. Now, if you're in business, you know all three of those factors are not only counterproductive, but they're simply no way to run a business. Yet many, many dispensaries do just that.
I don't have a magic bullet to remedy those policies, but I do have some real-world solutions that I'd like to offer. My goal in sharing these findings is simple: We can all learn from the mistakes of others.
The scenario: It's time to order contacts for a patient. You get out your seven price lists and shop them for the "lowest price." Look! You can save $0.25 a box if you order from XYZ distributor! You call XYZ and place the order. The next patient you see is fitted with a different brand of contact lenses. Again, you pull out those same seven price lists and once more go shopping. Company ABC is cheaper than all the rest by $0.50 a box. You call and place the order. The pattern repeats itself all day long until you've seen seven different patients with seven different brands of contact lenses ordered from seven different suppliers. At the end of the day, you've saved yourself a few bucks on the cost of goods and added to your practice's bottom line. Sounds like a plan, right? Wrong!
This model has several major flaws. First, although you saved money on the lower cost of goods by shopping price, you picked up a separate shipping charge for each order. Now your actual cost per unit has gone up, not down. When you factor in the "soft" costs-time required to get out those seven price lists and shop seven different times, calling to place seven different one-patient orders, checking in seven different orders, managing seven different invoices-the lost staff time and reduced productivity makes the $0.25 per box savings seem ridiculous.
SOLUTION: Develop a relationship with just one or two suppliers. This sounds obvious, but it is often overlooked in the quest to get the cheapest price. Seek out a one-stop distributor that can work with you to reduce your cost basis by combining orders in one shipment (which dilutes the cost of shipping over a larger number of units ordered).
Dealing primarily with one supplier also will give you more volume, which can lower your price points, help reduce staff time needed to check in product and manage invoices, and put your practice in a better position to have your supplier work with you because you have a business relationship.
Relationships are important. You want to have long-term relationships with your patients, so why not have the same expectations for your suppliers? By changing the dynamic from customer/supplier to strategic partners, you should expect to see better service, lower cost basis, and improved practice profitability.