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Last week a Morgan Stanley analyst sent SHOCK WAVES THROUGH THE DENTAL INDUSTRY when he downgraded confidence in Henry Schein and Patterson, believing that Amazon was finally ready to make deals directly with manufacturers. CNBC reported that the analyst said, "We have new evidence that Amazon is accessing critical products from Dentsply Sirona," which would be a major headline in and of itself. But according to this report, a Dentsply spokesperson denied that the company has inked a deal with Amazon. Regardless, Schein and Patterson stocks have taken a hit and dentists have been excitedly wondering what will happen next. So, what the heck is going on?
Here’s what we know for sure
Currently, Amazon does distribute instruments and materials from over 50 dental manufacturers. Purchasers must have an Amazon business account and must prove that they have a health-care license. Some concerns have been raised that some of these manufacturers actually have not yet made wholesale deals with Amazon; their products are actually being sold by a third party. As of the publication of this article, there are over 16,000 Denstply products available for purchase on Amazon, however, there are multiple entries for Dentsply SKUs. For example, if you want to purchase a 38g bottle of IRM powder (Dentsply SKU 610003) you will find more than one listing for more than one price. I think it’s safe to assume that these products are being offered by different distributors and not by Dentsply.
If Amazon continues to use these third parties then they will need to at least implement a strong vetting process to deter any gray- or black-market supply chains from muddying the waters. It is possible that they may pursue distribution directly with manufacturers. It has also been speculated that they will partner with Schein or Patterson to leverage their expertise. But it seems that the market reaction last week and the Morgan Stanley report that caused it are still based on speculation. Neither Amazon nor Dentsply Sirona have made any public statements about working together. We’re all waiting to see if and when Amazon will make a big play into the dental world, but at this point we’ll just have to wait a bit longer.
Cheers,
Chris
MORE OP-EDS FROM DR. SALIERNO
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The Delta Dental fight in Massachusetts
The Aspen Dental commercials that started a ruckus
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