By Ken Krivacic, OD, MBA
March 18, 2015
Ordering contact lenses by batch saves small amounts that add up to big profits.
ENHANCE PROFITABILITY. Save in shipping costs, potentially adding up to $8,000 annually.
CREATE ORDERING SYSTEM. Place orders once or twice a day rather than piecemeal.
WORK WITH VENDORS. All four major CL companies offer batch ordering; it’s easier and more profitable for them, too.
Contact lenses are an important part of my practice, so finding ways to make this area of our practice more profitable is a priority. I have discovered that sending orders for contact lenses to vendors in bulk, or in “batch,” is the most profitable way to order. Rather than placing orders to vendors piecemeal throughout the day, we wait until the end of each day, and then place all, or most, of the orders at one time.
We have a relatively large contact lens practice. Between two full-time doctors, we average just over 200 contact lenses patients per month, or over 2,400 contact lens patients per year. Of that number, approximately 10 percent are gas permeable patients, which we usually don’t batch due to the smaller volume. The rest of our contact lens patients are exclusively disposable wearers. Of that number, approximately 60 percent are single vision, 25 percent toric and 15 percent multifocals. Any of these types of disposable lenses can be ordered and batched.
In our practice, as in most, there usually is a shipping charge associated with each order that is sent to our office. Those orders generally run in the vicinity of $8 per order. If you have five orders per day, and placed each one separately, the total shipping for the day would be $40. If you batched all five orders into one order, and they were all shipped together, the shipping then becomes $8 and you have saved $32 for that day in shipping costs. Multiply that cost by 260 working days in a year and you have just saved yourself $8,320. Amazing how a small savings per order can lead to large results over the year. One caveat to this formula is that most vendors require a minimum in order to take advantage of batching. That minimum is usually in the range of $250.
Pass On Cost Savings to Patients
We do not change the price of our contact lenses based on whether we batch an order. Yet we do pass on savings to patients that the vendors pass on to us based on the size of the order. Most manufacturers will provide free shipping on a six-month supply of a daily replacement lens and a one-year supply of either a two-week replacement lenses or a monthly replacement contact lenses. The offer is usually reserved for the direct shipments to patients. This helps the patient and the practice to save money in shipping fees. It’s also a practice builder in that it encourages patients to purchase annual supplies of contacts, allowing the practice to capture all of a patient’s contact lens purchases for the year.
Create System to Order in Batches
Batching would be easy if we only ordered from one contact lens company. I have talked to a few doctors who limit themselves to one or two contact lens vendors. If you are more like our office–we order from everyone–then batching is not quite that simple. Most vendors allow you to batch through them either by phone or internet, yet if you buy from the big four contact lens manufacturers, then you will have to batch four times a day. This is still much better than placing individual orders. At our office, we have reduced cost even more by using a contact lens distributor to minimize the amount of batching that needs to be done for the day.
We also reduce costs and time by batching at the end of each day, rather than twice daily.
Batching is a good idea for any size practice that orders more than the minimum that vendors require for batching. Even if you only order two jobs per day, batching would cut your shipping cost in half. Per day that may not seem like much, but $8 per day is still $2,080 per year. That would even be a substantial savings for an office that is not a large volume contact lens practice.
Work with CL Vendors
All contact lens vendors seem receptive to batch ordering because it streamlines their process. Rather than sending out six separate boxes for six orders, they can cut time and reduce waste by putting all six orders in one shipment. It’s a win-win: Better for vendors, and better for the practice.