From Manufacturer to Dental Practice: Navigating the Realm of Dental Supplies
Jacob Drucker, BEcon, MStat
Dentists may not think about their supplies much, but they typically spend $50,000 each year stocking their offices with everything from anesthetics to x-ray holders.1 Historically, dentists have turned to large, established distributors to purchase their products, but today's landscape is rapidly changing. Offices are no longer dependent on traditional distributors to find the products they need. The emergence of nontraditional supply channels offers more options for dentists looking to find new sources for their supplies.
The dental supply space begins at the top, with the product manufacturers. The largest manufacturers of dental supplies may sell some of their products directly to customers (especially for specialty product lines like orthodontic products). The majority of their sales, however, are routed through distributors that span the globe. Manufacturers often price products differently in different countries. What is sold for $100 in the United States might cost only $50 in Asia, for instance. The products are often, but not always, identical; sometimes a different chemical formulation is used for different markets. Various enterprising businesses reroute these products to the United States to sell at below-market prices. These products are referred to as the "gray market." While there may be no issue with a given product, it might have been tampered with or stored improperly during its long journey to the customer.
Typically, distributors sit between manufacturers and end customers. The largest dental supply distributors are full-service companies, offering sales representatives, supplies, equipment repair, and other services as needed. However, while the services may be a benefit, pricing may not always be clear. Large distributors often don't allow non-customers to see their catalog pricing, and pricing may be adjusted for each customer at the discretion of the sales rep. The dental office next door might pay a different rate for the same gloves and impression materials.
Many smaller distributors offer similar product lines as the large distributors, often with lower, more transparent pricing. Roughly two dozen such distributors are authorized for all major dental product lines, including the largest manufacturers' products. Most of these companies have publicly listed prices for their entire catalog. Scores of other distributors sell some, but not all, products. These smaller distributors typically carry most disposable, infection control, and hygiene products and often display their prices very publicly and transparently. However, only some of these companies are full-service, able to service and repair equipment.
Most smaller distributors are careful to avoid gray-market products. They typically buy straight from the manufacturer or through a trusted intermediary. However, a small number of less scrupulous distributors do exist. This forces dentists to be vigilant to make sure they do not unwittingly put gray-market materials in their patients' mouths. The easiest and often most effective approach a dentist can take is to simply ask suppliers if they sell gray-market materials. If the supplier hesitates or hedges, the answer is clear.
Navigating the world of dental supplies is made even more complex by the rise of nontraditional supply channels. In recent years, a number of primarily online distribution channels have emerged. Amazon, for example, has some dental supplies available for purchase, particularly consumables. However, the online giant's dental supplies are often buried among various other products, and it's possible that gray-market materials may show up in the midst of authorized ones.
Other online channels focus specifically on the dental space. Dental offices, however, must be careful about where they source their supplies from online if they intend to avoid purchasing gray-market products. Some online sites make a point of preventing the sale of these products. Others, however, may not take such efforts and source their products through unauthorized channels. For dental offices, any supply company that does not have a clear gray-market policy may very well sell gray-market products.
In the final analysis, the end-consumer has more choices than ever with regard to purchasing dental supplies. Traditional distributors can provide full service and product lines, but generally at a premium. Smaller distributors typically offer lower prices, but fewer services or product lines. Online platforms are now increasingly available to offer both lower pricing with wider product selection. In today's world, customers have to do their own due diligence to ensure that their channel of choice offers the prices they want with the quality control they need.
About the Author
Jacob Drucker, BEcon, MStat
Co-founder and Chief Executive Officer, Supply
Clinic (supplyclinic.com), Chicago, Illinois
References
1. Levin R. Solid recovery offset by outdated systems. Dental Economics. November 2013. https://levingroup.com/pdf/desurvey/2013/Nov_DE_LGsurvey2.pdf. Accessed June 27, 2018.
