Opinion-Editorial
For years, the dental supply industry has been ripe for disruption. It’s a huge market—a $10-billion one1—and the major supply companies have been living out a dream scenario, dominating dental supply purchasing for as long as anyone can remember. They sent out their sales reps and dentists ordered their supplies without questioning costs. Each dentist was working in his or her own silo, and the dental suppliers thrived under the conditions. Until now. The dental supply industry is now feeling the impact of the e-commerce tsunami that has changed every facet of the retail economy—and organized dentistry.
Dentists Service Company (TDSC), a subsidiary of the California Dental Association (CDA), opened an e-commerce dental supply site to its 27,000 members in mid-2017. With an average savings of 20% or more on 25,000 dental supplies, practice owners started saving on supplies . . . just like large dental support organizations do through negotiation. Through the TDSC—or "Marketplace," as it's called—more than 1,300 CDA dentists have already saved over $750,000 in just a few months.
TDSC’s Marketplace is growing significantly month over month. It has become so successful that it is preparing to expand to offer dentists in other states the same significant savings. With the ultimate goal of rolling out nationwide, TDSC is currently working with other dental associations to start its expansion in the West and Northwest, with plans to be up and running in those states by mid-2018.
As one of the early beta testers, I have been using the Marketplace for almost a year. With a few simple clicks of a mouse, my lead assistant can order our supplies instantly and get them shipped free, with most arriving in two business days. We don’t have to wait to order the supplies when our supply reps stop by for their bimonthly visit. For common items like gloves, we use the Marketplace subscription service, meaning the gloves will arrive automatically each month without having to order them.
I was up-front with my current supply company about the change I was making. It offered to match the prices that I was receiving through TDSC. I declined the offer for two reasons: First, I would have to double-check invoices to ensure I received the best prices on every order, essentially doubling the time I spend ordering supplies. Second, I know TDSC has every intention to pass the savings along to dentists. Therefore, the savings will continually increase as more dentists use the Marketplace.
The Marketplace’s 25,000 dental product options include almost everything needed in a general dental practice, from composites, cements, and bonding agents, to burs, impression materials, gloves, and other disposable items. All products are supplied by a trusted, authorized distributor, and TDSC is constantly adding items based on members’ needs.
An average dental practice spends 4% to 7% percent on supplies annually.2–4 For an average practice with $800,000 in revenue that spends 6.5% on supplies ($52,000), a 20% reduction in supply costs could save $10,400 per year. Multiply those savings across additional states and you can imagine the impact that TDSC is having on the dental supply industry.
CDA saw an opportunity to help level the playing field for California dentists and took advantage of an industry ready for disruption. With the strength of organized dentistry, one dentist can now leverage the same buying power as a large DSO to save money on his or her dental supplies. And this is just the beginning—I personally look forward to seeing my colleagues in other states save on supplies just as I have done.
References
1. FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment. Federal Trade Commission website. https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not. Published February 12, 2018.
2. Drevenstedt L.12 ways to control the overhead monster. DentistryIQ website. https://www.dentistryiq.com/articles/2012/04/12-ways-to-control-the-overhead-monster.html. Published April 23, 2012.
3. Three Ways to Better Manage Overhead. Blatchford Solutions website. https://blatchford.com/resources/dental-practice-management-articles/three-ways-to-better-manage-overhead/.
4. Hunter T. More than just pennies: 6 tips to dramatically cut your dental supplies overhead. Dental Practice Management website. http://practicemanagement.dentalproductsreport.com/management/article/more-just-pennies-6-tips-dramatically-cut-your-dental-supplies-overhead. Published January 12, 2014.
Also by Jonathan Ford
Update on Action for Dental Health Act—and why it should get the Senate's vote
Nextdoor: An overview for dentists and dental practices
How I compete with that DSO-supported office down the street
The CDA launches a new collective buying group via the Dentists Service Company
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