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Renegotiate contracts
By Stuart Oberman, Esq.
April 2, 2025
As the global economy continues to shift, tariffs—especially those imposed by the U.S. government on imports from China—are expected to have a considerable impact on various industries, including the optical industry. That may require you to renegotiate contracts.
Many products that are utilized in optometry practices, such as eyewear frames, lenses, and even advanced optical equipment, are manufactured and imported from China. With increased tariffs, the costs of eyewear and industry-related products and equipment are expected to rise.
For optometry practice owners facing higher costs due to tariffs, attempting to renegotiate existing contracts with vendors and suppliers can be an effective way to minimize the financial strain.
Below is a summary of how optometry practice owners can attempt to renegotiate contracts with their vendors and suppliers if tariffs lead to higher prices.
Understand the Impact of Tariffs on Your Costs & Possible Need to Renegotiate Contracts
Before initiating any contract renegotiation, it is crucial for practice owners to clearly understand how the tariffs are affecting the cost of their products. The areas that will be affected by the tariffs include:
- Eyewear Frames & Lenses: Many optical goods are manufactured in China, and tariffs may raise the cost of these items. This increase can affect both retail prices and supply chain stability.
- Optical Equipment: Some diagnostic tools or automated refraction machines may also be imported from China, meaning their costs could rise as well.
To successfully negotiate any type of price increase imposed by vendors and suppliers as a result of tariffs, practice owners must completely analyze and understand their practice financial information.
Initiate Discussions with Vendors and Suppliers Early to Renegotiate Contracts
The first step in renegotiating your contracts is to open an honest and open dialogue with your vendors and suppliers. Clearly explain to your vendors and suppliers how the tariffs are affecting your operational costs. Key topics of discussion should include:
- Price Increases: Discuss the impact of tariffs on the pricing of goods or services and ask if there are any price adjustments that can be made to offset these costs.
- Volume Discounts or Special Offers: If you are purchasing products in bulk, see if you can secure better rates or exclusive discounts. Vendors and suppliers may be willing to offer special pricing to maintain your business during uncertain times.
- Long-Term Agreements: Vendors and suppliers may be open to renegotiating terms in exchange for committing to longer-term contracts or larger orders. This may be able to provide all parties involved with stability in uncertain market conditions.
Look for Alternative Suppliers or Manufacturers to Avoid Need to Renegotiate Contracts
Tariffs may not only increase costs, but could also disrupt supply chains, leading to delays or shortages. If your current vendor or supplier cannot offer competitive pricing due to tariffs, it may be worthwhile to explore alternative vendors or manufacturers. Consider:
- Domestic Suppliers: If available, domestic suppliers may be less impacted by tariffs, allowing you to bypass price hikes on imported goods.
- International Vendors: Vendors and suppliers in countries other than China may provide similar products at more competitive prices.
Negotiate Payment Terms
If the increased cost of goods is unavoidable, consider renegotiating payment terms with your vendor and supplier to help with cash flow. Some options include:
- Extended Payment Periods: Negotiate longer payment terms to give your practice more time to cover the increased costs without affecting daily operations.
- Payment Flexibility: Ask for flexible payment options, such as the ability to pay in installments, to reduce the financial strain from larger-than-usual orders.
When You Renegotiate Contract, Lock in Prices for Future Orders
To protect your practice from future price increases, consider locking in prices for future orders, especially if the tariffs’ impact is expected to persist. By agreeing to long-term contracts with fixed pricing, you can insulate your practice from unpredictable cost fluctuations due to tariffs.
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Explore Alternative Products
With increased tariffs potentially raising prices on certain optical products, it might be worth exploring alternative brands or materials that may be more competitively priced. This could include switching to different types of lenses, eyewear frames or equipment that may not be as heavily affected by tariffs.
Communicate with Your Patients
Renegotiating contracts with your vendors and suppliers can help mitigate some of the cost increases as a result of the tariffs, but it is also important to keep your patients informed.
In the event that you need to raise prices due to higher product costs, transparent patient communication is key. Explain the reasons behind the price hikes and highlight the efforts you are making to keep costs manageable.
Monitor the Market and Adapt
Finally, the situation surrounding tariffs and international trade is constantly evolving. It is essential that practice owners stay informed about changes in tariffs and international trade policies. Practice owners should regularly review their contracts and reassess their vendor and supplier relationships to ensure they are getting the best possible deal
Conclusion: Initiate Discussions Early to Renegotiate Contracts
With tariffs potentially driving up the cost of eyewear, lenses and optical equipment, practice owners may need to renegotiate contracts with vendors and suppliers to avoid a significant financial strain on their practice.
When practice owners fully understand the financial impact of tariffs on their practice, they should initiate price reduction discussions with vendors and suppliers, thereby negotiating flexible terms if possible, and explore alternative suppliers, in an attempt to minimize the negative effects of rising costs and ensure the continued success of their practice.
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Stuart Oberman, Esq., is the founder and president of Oberman Law Firm in Cumming, Ga. To contact him: stuart@obermanlaw.com.
