Have You Checked On Your Discounts Lately?

Once you get an account set up with a vendor, it is rarely revisited. But the longer your account has been open, the more likely it is that terms, such as your discount, buying group status, shipping costs, promotional offers, and programs may have changed. An immediate way to reveal savings is to review key elements for each vendor account.

Before you get started on checking your discounts, you’ll want to determine how you will keep track of the information you uncover. For the initial gathering of information, I recommend using a spreadsheet so you can have a holistic view of all of your discounts and fees across accounts so they can be compared. 

Verify Information With:

Direct Billing 
When the vendor bills your practice directly, you can get your discount information through your sales rep or by calling the main customer service number. 

Buying Groups
Most buying groups digitally provide their members pricing for their participating vendors. You can also call and speak with somebody at your buying group to review the discounts you have with vendor accounts. 

What To Review:

Labs and Lenses
Spectacle lenses are the most difficult to get a net cost on up front. It may be best to choose your top five most ordered lens/coating combinations and calculate the cost for them. There are almost too many variables to get net costs for every lens you may or may not order. Here is what to get details on: 

• standard pricing
• volume breakpoint discounts
• discounts on packages or lens bundles
• rewards or rebate programs
• shipping and/or handling cost per order
• manufacturer rewards/rebates 
• uncut or stock lenses (if you edge in-house)

Frames
Frames are easy to calculate up front, but promotions and rep orders can make it trickier to map out. When getting details on frames, inquire about:

• your discount off wholesale
• board space/volume pricing breakpoints
• shipping costs
• additional collection discounts and buyback programs for new frame lines
• promotions (buy 25, get 5)*
• perks (buy 50, get a $100 gift card)

*Many promotions that offer free frames often mean the free frames cannot be returned. Make sure you choose what can sell!

Contact Lenses
Calculating net costs for contact lenses is simple – especially if you have one preferred manufacturer. Ask for information about the following:

• standard pricing
• volume discounts
• rewards or growth discounts
• inventory or bank purchases
• shipping and/or handling cost per order/or if bulk, ships per day
• shipping from distributor direct to patient
• white label branding
• patient rebates
• patient DIY ordering through EHR integration

Supplies
Miscellaneous supplies including retail goods, ophthalmic and lab supplies, frame parts, and patient giveaways can be straightforward but add up quickly, so make sure to include them in your vendor information gathering. Be aware that cases ship in large boxes and spray cleaner is heavy. Shipping costs may only be able to be estimated with an exact quantity, but comparing the costs in advance can save big money.

Don’t Forget About the Backend
To determine a true net discount, backend savings must also be factored in. Depending on who you are aligned through, you may also see credits on patient insurance receivables, lens rebate checks or statement credits, preferred frame brands, or vision exam rebates.

Compare the Findings
Take a look at your findings in each category, as you will likely see mostly similar discounts and pricing. Look for outliers as opportunities to save more. For example, if vendor A offers free shipping when orders are placed online, see if vendor B can extend the same offer. If they don’t, you may want to group your orders so they are larger, but placed less frequently, ultimately saving shipping costs. Or you could opt to only order from vendor A. Gathering the data can also reveal order volume breakpoints — by getting finite numbers you can determine if ordering 5% more would ultimately end up saving you 20%.

Review which vendors belong to which buying groups. This is an opportunity to see if you are not aligned with any vendors in buying groups you already belong to. Additionally, you could uncover the need to reorganize which vendors you align with in each buying group, if a vendor has a better discount with a particular buying group, or it may reveal additional vendors you could align with. In addition to group purchasing discounts, members of buying groups may also receive additional savings or rebates exclusive to that group.

Take the First Step
After you’ve completed the research, comparing, and reorganizing, make sure to update the account terms for each vendor in your paper or digital file so you can reference it anytime. 

Don’t think you have to get this done all at once! Establish a reasonable goal completion date. Set up a spreadsheet or binder where you keep all of this data and collect it at your convenience when reps come in for their regularly scheduled visit or when you call to place an order. You may have a few accounts you have to make an effort to contact, but the majority of the work will be done. See how much you can uncover!