Broadly rising prices are an opportunity for business/practice owners to re-evaluate their orthodontic product purchasing process—and here are four tips to help do this.
By Jeff Biggs, DDS, MS
Remember last year, when news stories about inflation were impossible to escape? Pundits and so-called experts battled on talk shows discussing causes, impact, and how long this period of inflation would last.
This year, it’s not only impossible to escape the news stories, but the impact of inflation as well.
Hearing financial planners and other business owners share what they’re seeing caused me to reflect on how this might impact our industry. So I asked our team at Orthodontic Details, who simplifies purchasing for practices, if they’ve noticed an impact on supply prices across various practices and suppliers. They had.
In fact, based on their research and hands-on management of supply spend for practices across the country, they’ve seen a consistent increase in supplier pricing of 2% to 4% in the last 6 months alone.
From their conversations with suppliers, manufacturers and distributors are in a tough spot. As their costs increase related to inflation, they have to make a decision about whether to pass those costs on to their customers, or absorb them. The current insanity of the labor market and variability in supply chains only makes this decision more difficult.
Now, these cost increases often result in a practice asking Details to find them an alternative supplier with normal prices, which they’ve been able to do. But what if inflation persists and pricing continues to rise?
As I shared in our last article, purchasing supplies in orthodontics is like internal bleeding—it’s difficult for staff to manage it well (on top of other responsibilities), and way too easy for suppliers to slip in price increases or not account for negotiated discounts. The result is less money in your bank account without you realizing it.
But perhaps this inflation could be a blessing in disguise.
Broadly rising costs force us as business owners to re-evaluate the way we do things. Especially for those of us who have been practicing for 20+ years, moments like this one can serve as a great opportunity to reflect and ask: What’s a better way to do this? Why do I have clinical staff stuck at a computer emailing sales reps? Why is it SO difficult to consolidate to fewer suppliers? Why do some practices pay more for the SAME supplies than others? Why DON’T we have access to one dashboard that shows all our supplier pricing and spending in one spot?
The more you think about it, the more questions arise. And once you know the questions, you can start looking for answers. Would I prefer there not be any inflation? Of course. But rather than whine and complain, I’d rather find solutions for my practice.
To that end, here are a few ways we’ve been able to bring transparency and savings to our purchasing process, resulting in lower supply costs. Now, because our practice uses Orthodontic Details Concierge (the company I co-founded), they do nearly all of this work. But these tactics apply beyond that service:
- Compare prices with other suppliers prior to ordering. In our experience, suppliers are changing prices constantly. Which means if you’re hyper-aware, you can save 10% to 15% by knowing which suppliers are offering the lowest price for the same products.
- Don’t be afraid to negotiate. Suppliers want your business as much as you want to save money. Being direct about pricing expectations (and under what situations those prices change) goes a long way.
- Consolidate your ordering channels. Having clinical staff go to 10, 15, 20 different suppliers (which means endless email threads with sales reps, logins, etc) is inefficient and demoralizing. Ordering from fewer suppliers (or using an all in one service like Details Concierge) allows you to dramatically reduce the time spent on ordering, and spend more time finding better prices, negotiating, or just taking on more patients.
- Get automated detailed visibility into your spend. Supplier-level data from Quickbooks isn’t enough in our experience. You really need to see a detailed product category that’s updated in real time to catch price increases and billing mistakes. We’ve seen practices design sophisticated systems to do this using Google Sheets, but we use the Pulse of Purchasing dashboard on the Details Concierge platform for spend visibility.
Do you have any tips to share on saving money on supplies or to catch price increases? If so, we’d love to hear them. Email us below. OP
This column offers a close-up look at orthodontic product purchasing and how it is evolving. Orthodontic Products teamed up with Biggs—who is the owner of his own private practice in Indiana and founder and CEO of Orthodontic Details Marketplace, an online marketplace built for orthodontists’ purchasing needs—to get his unique insight into the orthodontist-supplier relationship and purchasing trends.
Send us your thoughts and questions at [email protected] and we will answer them in a future column.
Jeff Biggs, DDS, MS, is an ABO certified orthodontist with more than 20 years of experience. In addition to actively practicing in Indianapolis, Biggs is the CEO of Orthodontic Details Marketplace, and a sought-after advisor for other practices.