view from the top

Is One Frame Better Than 1,000?

How you display and sell frames can mean more than how many you stock.

Gary Gerber, O.D.

Which is better, practice A, which has one frame available for all patients and sells it over and over, or practice B, which has 1,000 different frames and sells each frame once to 1,000 different patients? (Keep in mind that last year, practice A sold the same frame 1,000 times: one time each to 1,000 different patients.) If all you looked at were gross sales numbers and cost of goods, you'd come up with about the same numbers on both sides of the equation. That said, there is a definite financial benefit to being one of these practices.

Hidden profits

Looking at practice A and practice B from the perspective of generating net revenues, there are several “hidden” profit segments practice A enjoys that are not available to practice B.

First, with fewer frames (999 less), patients aren't at risk of becoming overwhelmed with frame selection, and the process of moving patients through the sales procedure is, therefore, easier and more efficient.

Second, the frame seller will unquestionably become an expert on why this one frame is perfect for every patient. He/she will present the benefits of the frame to each patient from a position of believable strength and knowledge and speak about it with utmost confidence: “You'll love this frame. All of our patients get it, and they love it too!”

In practice B, the patient is besieged with 1,000 choices. The selection process takes longer and if it's not carefully guided by the frame seller, the patient will leave frustrated without buying anything. Of course, it's nearly impossible for the seller to be an expert on 1,000 different frames.

The next hidden profit plus for practice A relates to the concept of “inventory carry cost,” which has a couple branches on its' tree.

First, there is the financial impact of the lost opportunity cost of the 999 frames that are on the board that, if not consigned, have all been paid for. This means that if each frame had an average cost of $50, there is about $50,000 not available to practice B to be used for something else. That something else could be: Capital equipment that could generate extra professional fees, another staff person, a marketing campaign, a contact lens inventory that moves much quicker, etc. The overriding concept being the money has been spent and can't be reused.

Next, there is less staff time involved in working with a single frame vs. 1,000 (e.g. less stocking, opening boxes, tracking invoices, returns, etc). Also, with only one frame, the odds of theft are much less and should it happen, the impact is less dramatic.

When bigger isn't better

Unfortunately, I've never heard of that one magical frame. I doubt you could meet that goal with two or even 10 frames. But I question, as is often written, if “bigger is better” when it comes to optical inventory. I've found that the way toward a higher net is rarely to add to your inventory in the hopes you'll sell more glasses. Instead, buying the right mix of frames and displaying them properly is the most effective way to achieve maximum sales and inventory returns.

The success of your optical dispensary isn't contingent on how many frames you have. It's based on which ones you have, how you display them and how you sell them that matters. OM