ARE BUYING ALLIANCES A VIABLE OPTION FOR YOU?

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Block Business Group hosts educational conferences like the recent Block Business Academy (John Rumpakis, OD, presents on Billing and Coding).
Vision Source regularly holds member meetings like The Exchange, the annual North American meeting which took place in Las Vegas in 2013.
C&E Vision’s IEP Benchmark tool allows ECPs to create an easy-to-read and understandable spreadsheet and chart.

Today’s buying groups offer much more than volume discounts.

In 1989 I decided to join my father in his optical business until I could find a job where I could use my college degree. It was a temporary job, one to give me some experience until I knew what I wanted to be when I grew up. Here it is 25 years later, and I have been an optician for a quarter of a century and a business owner for almost a decade. I’ve learned that to remain in business, you have to be more than hardworking and competitive, you must be willing to change.

My dad taught me about the buying group he was part of and the merits of being in one. While that helped him, some of today’s optical retailers might not be of the same mindset. The following are the pros and cons of buying groups.

BUYING GROUP CONCEPT

Once I surrendered to the opticianry calling, my father explained that some of the manufacturers we dealt with would give you greater discounts based on the volume you did with them. A small office like ours could never compete with some of the major optical retail players when it comes to purchasing inventory for resale because of their huge volume buying. My dad explained that if a large number of small companies banded together, they could purchase inventory in bulk, enabling them to negotiate a larger discount, which could increase their profit margins. The best way to do that at the time was to join a buying group.

This group would open accounts with many of the major players and our orders would be shipped to us but billed to the buying group. The buying group would pay the bill and get the volume discount. Afterwards, the buying group would bill us for the frames we purchased and pass the discount on to us. All we had to do was pay a small administrative fee. In other words, we could buy a frame for regular wholesale price or we could purchase it at a 10% savings through the buying group. The buying group would keep 2% of that savings leaving us with a net savings of about 8%, depending on the manufacturer discount. Regardless of the amount of the discount, our price was less than buying it directly from the manufacturer.

CHANGING TIMES

Buying groups have helped independent opticianry and optometry offices for several decades and their buying programs have enabled many independents to compete. At their inception in the ’60s, buying groups did just one thing-they negotiated discounts on selected products (mostly frame brands/lines) for their members. Times have changed and today most have morphed into what you might call a practice management or practice services group and many offices are joining them.

Some groups provide consultants to help you manage your business. How about help developing and maintaining your business? Instead of discounts on just frames and some accessories, how about discounts on a broad range of products? These services and more are offered through some practice services groups.

Primary Eyecare Network is an optometric-oriented example. Instead of simply offering members discount programs on the products they order, it provides a host of other services. For example, it offers a number of ways to obtain practice management and business education live, online, and in print.

Founded in 1991, Vision Source is North America’s largest network of independent optometrists with 3,400+ members, according to the organization. Vision Source delivers a wide range of solutions for optometric professionals including innovative eyecare product technologies, practice and professional development tools, marketing, and purchasing power. Members also benefit from regular meetings, practice management education for doctors and staff, and now, access to patients from emerging Accountable Care Organizations (ACOs).

ADVANTAGES
Being a member of a buying group allows me to write a single check. Even better, many buying groups like HMI Buying Group, for example, are set up so that my account is automatically drafted so I don’t even have to write a check! As a small independent optical practice, I don’t have the time, resources, or knowledge to do all of the things I need to do to keep my business going. C&E Vision Buying Group offers its members many tools to help with this. For example, BeyeRight is a frame board management tool that analyzes monthly sales from across the country and determines each company’s top-selling frames, categorized by brands or manufacturers.

Another exciting feature is C&E’s IEP Benchmark. For those of us who are not as number-savvy as we would like to be, this tool allows you to input data from your business and create an easy-to-read and understandable spreadsheet and chart. You can benchmark your business to others of similar size in the industry and make “operational and service/product mix” adjustments to increase your profits. Members also have access to four years of statements, manufacturer invoices, and payment history through their MyC&E online member portal.

An example of a buying group going the extra mile is Block Business Group, which hosts educational conferences and offers free online continuing education courses for its members. In addition, owner Michael Block has created a video series on a variety of industry topics which resides on the group’s website. Block Business Group is also affiliated with a number of practice-builder companies, including ones with services that can help you build a website or create a mobile app specific to your practice.

In today’s competitive environment, independent eyecare professionals (ECPs) need support to help them market their practices both through traditional means and within the ever-changing online landscape. Block Business Group provides its members with tools to navigate today’s business environment.

DISADVANTAGES
While saving money and obtaining management, business, sales, and educational services is great, there are some disadvantages to being in a buying group. The most obvious one is not being able to get discounts on all products. Buying groups negotiate with companies but they don’t sign every one. This means there will be products you may want to use that they do not offer for discount. Do you change your product mix so it only represents the products you can get at discount? Do you join another group (who will probably have the same problem)? Those are decisions you’ll have to make.

Buying groups give greater discounts for greater purchasing power so the more you buy the more you’ll benefit financially.

Today’s buying group isn’t my dad’s buying group-it’s that and a whole lot more, and I think we all can agree that in today’s economy, we could all use a little more.

Kevin Harrison is president and owner of Heritage Vision Center, an independent optical dispensary in Hattiesburg, MI.

WHERE TO FIND IT:

Block Business Group
800-524-1480 • blockbg.com

C&E Vision Buying Group
800-346-2626 • cevision.com

HMI Buying Group
800-569-0681 • hmibg.com

Primary Care Network
800-444-9230 • primaryeye.net

Vision Source
888-558-2020 • visionsource.com

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