Does your dental supply rep really work for you?

One of the staples of the dental industry is the ever-present supply rep. For decades, the industry has been beholden to the large dental supply companies and, by default, their supply reps. The question is whether or not these representatives are really in a position to do what is best for you and your business. A growing consensus is mounting and calling into question the need for alignment with the big supply chains — especially among those fresh out of school and strapped with large amounts of debt. In an age smart devices, online shopping, and the expansion of IoT, chaining oneself to a corporation seems unnecessary and overly expensive.

Recent podcasts by The Dental Guys and The DentalPrenuer have discussed the diminishing value of the traditional dental rep. These representatives are employees of their respective companies and must toe the line in order to maintain their jobs. However, this does not stop the supply rep from presenting her or himself as working for the dentist. In what way do they work for you? How are they benefitting your business? What do they bring to the table? And, most importantly, can any supply rep truly serve two masters?

It is common for the rep to utilize universal sales tools to maintain a relationship with the dental office by using the following methods:

· Lunch

· Gift bags

· Gift cards

· Golfing

· Fishing trips

· Movie vouchers

While the list goes on, the point is that the dental supply reps utilize standard sales tactics for maintaining their client base. Integral to preserving clientele are business side incentives as well:

· Limited time sales

· Free promotional products

· Consultation services

· Repair contracts

When one begins to examine these incentives, it becomes clear that the representative is working in a very restrained environment. The sales they can offer are primarily based on products that are already extremely overpriced due to internal company markups. Products that they hand out for free are sample size and either theirs or brands they are currently marketing. Consultation services are based entirely on products, services, and equipment that they provide and/or have agreements to sell. Repair contracts are often tied to supply purchasing quantities and other ‘value ads’ that end up costing the dentist much more and put you in a mindset that is advantageous to the supply company, not your business.

In a recent podcast by The Dental Guys, the value of the dental rep was addressed at length and the hosts, Wes and Jon, pointed out the cost side savings available to those willing to break with tradition and source their own supplies through various online retailers. Wes honed in on the benefit of dentists recognizing the variety of brands on the market and the financial advantage of utilizing similar — sometimes superior — products that are not pitched by traditional sales reps. Jon did not hide the fact that moving away from the supply rep would require extra time and resources to search out the products and verify their quality; however, he admitted that out of his eight practices, he had moved several away from the supply rep model to bring a significant amount of savings back into his businesses.

The large dental supply companies had their day. Decades ago, these companies recognized the business opportunity of catering to the dental profession — a profession full of small business operators and recent college grads that were not in a position to spend the necessary time, money and resources on procuring supplies on a regular basis. They understood the intense time demands on the dental practitioner and organized accordingly. Working and merging with strategic partners they stocked large warehouses with supplies and hundreds of employees throughout the United States and other countries. Then they introduced their foot soldiers — the supply reps.

The creation of these multi-billion dollar service and supply conglomerates put themselves in a prime position for massive growth. But growth can be distracting and it is no longer business as usual for the big supply companies. Dentists and others are not happy with the service and feel slighted by the big supply conglomerates.[1]

Their system is antiquated and their structure ill-equipped for the Internet age. The typical dental office operates at a 6% revenue spend on supplies. But don’t let that number fool you. Any reduction in that number is a pure profit gain for the dentist. Weigh your options, do the math, and consider the pros and cons associated with moving away from the traditional model for supply ordering. There are a growing number of options on the table:

  1. Companies designed to handle the setup, price matching, and ordering for you (www.mydentalrep.com)
  2. Licensed software to help with managing inventory and the price matching game (www.zensupplies.com)
  3. Companies that allow for group purchasing to obtain lower supply rates. (www.thesynergydentalpartners.com)

There are many options available and none are a universal fit. Each dental office is unique and has specific goals in mind. For practices buying all their supplies from one large distributor, going with the first option listed above would be an ideal fit that will save thousands each month. Those with an office manager with the expertise, training, and know how may save a lot of money by choosing the second option listed above. Those content with sourcing all of their office needs each week should consider the third option to lower their yearly spending.

Whatever you decide to do, make sure it will benefit your company first and foremost. The world has moved into the digital age and dentists’ should too. It is your business, not the supply companies. Break the chains associated with the large supply conglomerates. They can only help you as much as it helps them. Their incentives do not put you and your business first. There are technology and alternative options out there — consider their value.


Footnote

[1] The large dental supply companies, commonly referred to as the Big 3 or the Big 3 + 1 have been embroiled in various lawsuits over the past decade. For a sample of some of the more recent litigation, see the following cases; all accessed 13 April 2017. Available at:

http://www.krcomplexlit.com/currentcases/dental-supplies-antitrust-litigation/

http://www.appliedantitrust.com/20_exclusive_contracts/dentsply/dentsply_companion_cases/jersey_dental/jersey_dental_ddel_complaint_amended10_10_2006.pdf

http://www.bergermontague.com/media/532466/dental-supply-antitrust-opinion.pdf

https://www.sec.gov/Archives/edgar/data/891024/000089102416000017/pdco7302016.htm (see page 18)

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