Contact Lenses

How We Realized 20% Savings on CL COGS & Created $40K+ in Increased Profits

A contact-lens technician works with a patient in Dr. Cargo's office. Dr. Cargo says a few key actions have changed patient service and profitability in the contact-lens area of his practice.

A contact-lens technician works with a patient in Dr. Cargo’s office. Dr. Cargo says a few key actions have changed patient service and profitability in the contact-lens area of his practice.

Taking a deliberate approach to prescribing & selling contact lenses.

By Jonathan Cargo, OD

Oct. 11, 2023

Contact lenses significantly improve many patients’ quality of life. These products should also be contributing substantially to your bottom line. Here are changes we implemented that made contact lenses even more of a winner for our patients and practice.

Implementing a Prescribing Strategy

When I first started my private practice, I’d meet with all of the representatives for the four major contact-lens manufacturers and would use each of their products. Sometimes my usage would be influenced by the previous product the patient wore, the newest product released, or the most recent rep I met with.

I believe that all the major contact-lens vendors make quality products that serve our patients’ needs, however, by not having a prescribing strategy I was not able to maximize our practice’s opportunity to increase profit margins through volume purchasing, growth and rebate programs. Not having a strategy also adversely affected our capture rate and contact-lens sales because our team didn’t have familiarity with all the products and rebates.

I looked at the different manufacturers’ portfolio of products and determined which ones best met the needs of my patients and our practice. We evaluate if they are the best clinical products, affordable to our patients and profitable to our practice. If they meet these three criteria, then we consider them as our manufacturer of choice.

Educate Your Team

We then educate our team on the entire portfolio of products and the rebates, so they can easily discuss the features of the contact lenses and the value of purchasing them through our office. The manufacturer rebates often give us an advantage so that we’re priced hundreds of dollars less than other retailers. We found that usually one manufacturer will fulfill our needs most of the time, but we usually have a second option.

Reducing Cost of Goods

We reduced our costs of goods considerably by maximizing growth and rebate programs. By simplifying our portfolio, our team produced a much better capture rate because of better understanding of the products and pricing. As we became comfortable with this strategy, we were able to retire unused fitting sets and regain valuable space within the office.

Since we aligned with one manufacturer, we are often the first to get new products released to the market, and we get enhanced patient rebates to create even greater value.

A focused approach by all providers in the office is critical for the success of building a contact-lens strategy.

Impact on profitability: By focusing our efforts, we have aligned 80 percent of our contact-lens sales with one manufacturer. This allowed us to realize a 20 percent savings on our contact-lens costs of goods, creating more than $40,000 per year in increased profits.

We used this same focused approach to grow our daily disposable category to more than 80 percent of our sales. We also get great support from our representative if we need to make any returns or exchanges.

Jonathan Cargo, OD, is the owner of Cargo Eye Care, a Vision Source practice in Irving, Texas. To contact him: 

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