Tips for cutting costs on dental supplies
It’s no secret that the rising cost of dental supplies can hurt profits.
Here are some practical strategies you can use to cut dental supply costs without taking a hit on quality.
Figure out how much you’re spending
If you’re not currently tracking dental supply expenditure, you should be. How will you know if you’ve reduced this cost category in the future if you don’t know what you’re spending today? It can take three to four months to get an accurate number, depending on the size of your practice, how often you order new supplies and how much you buy in bulk.
Compare your findings against gross revenue
Total dental supply costs should typically sit somewhere between five and eight percent of revenue. If your percentage is significantly higher, you should take action.
Take baby steps toward lowering supply costs. Even if you find your percentage at 15 or more, don’t try to fix the problem overnight. Instead, set a goal to drop supply costs as a function of revenue by one or two percent each month.
It’s usually best to refrain from seeking out just one solution to the problem, as drastic changes in your dental supply chain can lead to a drop in quality. Look for different opportunities to save rather than using one way to save a lot.
Cost saving strategies
- Shop around for distributors. Sometimes, dental practices get in the habit of using the same company they always have, out of convenience.
- Discuss lower prices with salespeople or ask for advice on how you might be able to cut costs. Most suppliers value your business and may have buying strategies to offer that can save you money. For example, there could be alternate bulk prices you’re not aware of.
- Effective inventory management leads to purchasing power and leverage. The better you track your supply usage and know exactly what you need and when, the greater your leverage during negotiations.
- Be sure to renegotiate contracts with your distributors when they are up for renewal.
- Track prices annually and get quotes from competitors even if you’re mostly happy with your current prices. The best vendor for a given supply in the past may no longer have the lowest prices on the market today.
- Ask for samples and try before you buy. Using a new supply first is a great way to see if it’s something you’d truly need.
- Dental supply cost management software is available if you need help tracking expenditures and looking for opportunities.
Monitor and adjust
Getting your dental supply costs under control is not a reason to stop tracking. As a significant portion of your practice’s overhead, you should be aware of exactly how much is being spent on supplies and how that figure relates to the revenue of your office.