Don’t shop ‘til you drop
Most doctors I know abhor the task of compiling a list and shopping for dental equipment to support a new, remodeled, or upgraded facility. They fear being taken advantage of by unscrupulous salespeople who will over-equip their facilities with unnecessary components and products at the greatest reseller margins. I was counseled in the last days of dental school to not trust the dental equipment suppliers to act in my best interests. As unfair as these negative assessments can be about the people and companies that sell dental equipment, it also is a mistake not to acknowledge that these sentiments are prevalent among dental practitioners when prescribing a positive course of action (which is the goal of this article).
Much of the disconnect between dentists and equipment reps comes from the dichotomy of sales and marketing vs. a dentist’s technical training, which is based on years of deductive reasoning. This results in multiple layers of principled thought processes and accumulated information. Sales and marketing literature often says, “Our product is the best and you should buy it because we say so!” This abbreviated thought process is upsetting to most dentists who often require voluminous amounts of information and theoretical justification to make major purchase decisions. My experience has been that oral surgeons, with their advanced technical training, get the most worked-up over sales and marketing issues when forced to make equipment and facility decisions in what they consider an environment devoid of useful information. Regardless of what certain staff members may tell you, dental practitioners are human beings and most humans become upset or angry during a process that requires them to invest large sums of money into products they view with ambivalence.
OK, so how do you shop for and make major dental equipment purchases? Gathering information and taking positive, goal-directed steps always help overcome the fear of dealing with the unknown. Let’s start with some background information on the dental equipment manufacturing and sales process. As a younger practitioner with an extensive undergraduate background in frog dissection, I knew next to nothing about the business world and was clueless about how typical business models are structured. Here is a useful primer -
➊ Manufacturers of dental equipment such as A-dec, Pelton & Crane, Sirona, Gendex, etc., design, develop, fabricate, assemble, ship, and market equipment. Some manufacturers have only one piece of equipment, but most major companies have several different products with multiple choices within each specific product type. A-dec, for example, offers three lines of operatory equipment - A-dec 500 series, Radius series, and Performer series. The available options and associated costs decrease proportionately from the A-dec 500 series to the Radius series and from the Radius series to the Performer series.
➋ Patterson, Sullivan-Schein, and the other independent dental supply companies resell manufacturers’ equipment to you. Resellers (often called dental dealers) interface with the manufacturer through the manufacturer’s representatives. The reps assist your local equipment reseller to market and sell their equipment as well as train the reseller’s technicians to service and repair the equipment in the field. The reseller’s technician also is the person most likely to install new equipment in your facility, although it is not uncommon for manufacturer’s reps to visit large or complex installations of their equipment within their regions.
My experience in this process has been that resellers cannot financially support and successfully sell a product unless their sales margin is at least 20 percent. The great and enduring manufacturers are able to find the proper balance between providing quality products to the end-user and supporting their reseller network with marketing, financial, and technical assistance. At major dental trade shows such as the Chicago Midwinter, Hinman, and the ADA annual meeting, you often will see the major dental equipment manufacturers’ exhibits positioned adjacent to the resellers of their equipment. The A-dec exhibit is often directly across from the Patterson booth and the Pelton & Crane exhibit typically will be down the aisle and immediately adjacent to the Sullivan-Schein booth. Manufacturers often choose not to align with all potential resellers for various reasons. The highest-profile example of this limitation is the previous example - you cannot purchase A-dec equipment through Sullivan-Schein and you cannot purchase Pelton & Crane equipment through Patterson.
➌You cannot purchase equipment directly from a manufacturer that distributes through a reseller network. The assignment of sales proceeds would be an unpleasant and murky task if you had manufacturers’ reps and resellers competing with one another to sell the same products within a region. Manufacturers’ reps are experts on a limited number of products or models of a specific product line. Resellers such as Patterson reps or Sullivan-Schein reps are required to be knowledgeable on vast numbers of products by many different manufacturers. The complexity and huge variety of dental products often result in resellers departmentalizing their reps. A reseller’s equipment specialist typically is the person designated to assist you with your equipment needs.
Manufacturers and dental supply companies incur tremendous costs to attend trade shows and present their products to you. Obviously, if they don’t sell anything at the show or create interest in their products for future sales, they won’t be back next year. “Show specials” are one way to boost sales and help these companies offset some of their costs to attend. Show specials on equipment can be manufacturers discounting their cost to the reseller, and the reseller passing that savings along to you. Other specials might be the reseller giving up a portion of their sales margin and passing that along to you. A great deal might be a combination of a manufacturer’s discount and a reseller’s sales margin reduction passed along to you. A note of caution: It is not appropriate to ask resellers the specifics of their pricing structure. And, no matter how much you like “Matt,” the manufacturer’s rep in the Pelton & Crane booth, you can’t purchase the Spirit 3000 dental patient chair from him. You will need to walk across the aisle to the Sullivan-Schein booth or another authorized reseller to place your order.
With this dental business model and sequence in mind, here are five shopping tips. They can help you avoid the unpleasant situation of shopping ’til you drop because your facility is scheduled to open next month and you have not ordered any new equipment.
Tip one - Before (or concurrently with) the initiation of design work for a new or remodeled facility, begin compiling your major equipment list. Often, the need for new equipment is the motivation for remodeling or creating a new facility in the first place. A highly undesirable situation is to design a new facility around pieces of equipment you are not sure you want or need. Research your “technology” product decisions - even more than traditional dental equipment decisions - early in the process and select them as soon as you feel comfortable making the decision. Don’t wait until you’re handed a floor plan with no darkroom and an $80,000 digital panoramic/cephalometric unit designed into your space that you haven’t yet decided to purchase!
Much like high-end furniture, orders for dental equipment with custom finishes or orders for out-of-stock equipment can take considerably more time to get from the manufacturer to you. These “special purchase” orders can take up to three months to be filled. A good rule is to make most if not all of your equipment purchases by the time construction starts on your new or remodeled facility.
Tip two - Set a realistic budget for the amount you can invest on dental equipment for your project. The amount must be considered in context with other funding requirements occurring simultaneously. For example, it is not uncommon for a practitioner to invest $200,000 in dental equipment and another $100,000 in dental technology products for a new, five-operatory, free-standing dental building. The overall project cost including construction, soft costs, land, equipment, and technology might approach or surpass $1,000,000. Resist the temptation to add a big-ticket item at the last minute. It is often very difficult to borrow additional money near the end of a project beyond that for which you were originally approved.
Tip three - Take full advantage of the detailed product knowledge of manufacturers’ reps at trade show exhibits. This may be your only opportunity to gather equipment information while you personally examine a specific piece of equipment and speak directly with a manufacturer’s rep. Sometimes it isn’t clear who is reselling equipment as a dealer and who is representing the equipment as an employee of the manufacturer. So, it is perfectly acceptable to ask an exhibitor his or her relationship to the product.
Speaking with a manufacturer’s rep on the trade show floor is an excellent way to review model types and options available for a particular piece of equipment you have decided to purchase. For example, delivery units come with a multitude of add-on components - some you may need and some that are optional. The best way to approach unit options is to ask the rep to go down the list and explain what need the option fulfills and how much it costs. Then you can decide if you want that option as part of your purchase order or not. The best way to approach model options for unit types is to compare the different models side by side. For example, you may love the quality of A-dec equipment, but are unwilling to invest to the level of the 500 series. The A-dec rep guides you to the Performer series display in the same exhibit so you can easily compare it to the 500 series and, with the rep’s assistance, make a determination which model fits your needs and budget most closely.
Sometimes you need to compare different manufacturers’ models that have similar price points. For example, you may have examined the A-dec Performer dental patient chair which seems to fit your needs, but your buddy down the street may have just purchased four Marus chairs for her office and recommends them highly. You enter the Marus booth and discover the Marus MaxStar being offered for $4,437, and your assessment is that it is comparable to the A-dec Performer series, which lists for $4,565. You are now in a position to make an informed decision about which manufacturer’s chair to purchase and which options to include with the unit.
Tip four - Do not impulse-buy a major piece of equipment at a trade show unless you have previously placed it on your shopping list and conducted “pre-shopping” research into the unit. Even seasoned dentists can succumb to the allure of a special price on the floor and purchase equipment that ultimately ends up in their basement next to their kayak.
Tip five - Major pieces of dental equipment typically sold through reseller networks are rarely purchased for the listed retail price. In large purchase orders, it is not uncommon for doctors to receive up to a 24 percent discount off retail from their reseller (or dealer). Discounts and show specials offered at trade shows can sometimes be considered creative marketing of a discount structure that also is available to you in other purchase situations. Although somewhat confusing, the discounting of equipment is a viable tool subject to market forces that allows some flexibility in pricing and facilitates product sales. All of this is good if you believe in free markets and capitalism - which I do. It is appropriate to ask a reseller to list retail and your purchase cost on the company’s equipment quote so you can compare the two.
Prepare your shopping list for major dental equipment using the analytical tools you have developed as a trained dentist before you encounter the emotional turbulence generated by the sales and marketing of major pieces of dental equipment. Otherwise, you’ll shop ’til you drop.
This month in a companion piece in Dental Equipment & Materials®, we get into the “nuts and bolts” of shopping for dental equipment. We list major pieces and make recommendations of specific equipment essential to the completion of three different facility project types.
Dr. Jeff Carter is co-owner of the Practice Design Group, based in Austin, Texas. PDG specializes in providing architectural, interior design and equipment, and technology-integration services to dentists nationwide. Dr. Carter may be reached at (512) 295-2224, by e-mail at [email protected], or visit www.practicedesigngroup.com.
