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Thread: New Office

  1. #1
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    New Office

    Hello Everyone. I am looking to open my own office. I am wondering if I should join a buying group? If so, which one? I have looked at Eye Recommend and OSI. What are the pros and cons of each? Please advise...

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    Blue Jumper Bying group owners are also in business ............

    Bying group owners are also in business and work out the best method to show good profit at the end of the year.

    Frames and lenses in the wholesale business these days have some hefty additional charges over their original cost by the manufacturer.

    The charges cover for warranties of unconditional rights, to return frames for whatever reason. The better these warranties, the more you overpay for the product.

    Before you join any any group for whatever reason you should find out how you can purchase the same or similar products at far better pricing than offered by the sales reps, if you carry your own return warranty cost and definition.

    In the new age of online sales you have all the information at your fingertips. Do a websearch at what price these companies sell the same or similar frames or lenses on the web and at which warranties the offer.

    As as a new OD you could also look into a totally different way of charging a similar way the online opticals can not compete with. That would be by charging a price close to cost, plus charging separately for professional services, you can itemize and which online services can not offer.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    I know there are some frame manufacturers that we get a better discount just going through them and not through a buying group. Sometimes that depends on volume too.

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    Volume is always one of the biggest factors to get price reductions in any domaine of commerce.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    OptiBoard Apprentice McAnerin's Avatar
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    Our office is using Eye Recommend. The upside is that it's convenient to have a single bill for everything, however we end up paying slightly more than if we went directly to the manufacturer. And that's because we get additional warranties and less return policy hoops to jump through.

    In the end, it's up to you. We pay a bit more for the convenience and ease, and we're okay with that.
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    Like poly, you can trust me about 40% of the time.

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    Wow, I always thought we got such great price using a buying group. Our purchases are the same quality as going to the manufacture directly - as in the lenses being the same ones as offered to the non buying group. Just much better pricing from what we can see. Our frame prices are better than those shown on the websites the companies use for wholesale/optical(non consumer) sales. We are a small higher end boutique, using only top end frames and lenses so maybe that is why we get such good prices? I know we would never be in a buying group if they were over-charging us to use them! Who would?

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    Quote Originally Posted by Opti girl View Post
    Wow, I always thought we got such great price using a buying group. Our purchases are the same quality as going to the manufacture directly - as in the lenses being the same ones as offered to the non buying group. Just much better pricing from what we can see. Our frame prices are better than those shown on the websites the companies use for wholesale/optical(non consumer) sales. We are a small higher end boutique, using only top end frames and lenses so maybe that is why we get such good prices? I know we would never be in a buying group if they were over-charging us to use them! Who would?
    Factual food for thought:

    1. Any practice can negotiate decent discounts direct with manufacturers now a days.
    2. Buying groups take 3-5% of your monthly spend to survive, which otherwise would be yours.
    3. Eye Recommend takes the highest percentage from their members of all the buying groups out there. But hey, you get a rep visit and group hug once per year.

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    Master OptiBoarder rbaker's Avatar
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    Quote Originally Posted by Opti girl View Post
    I know we would never be in a buying group if they were over-charging us to use them! Who would?
    They are not overcharging" you. They are charging you a fee for the service they are providing you. Everyone in your supply chain is entitled to make a profit for their services.

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    Blue Jumper Dick is right ....................


    Originally Posted by Opti girl
    I know we would never be in a buying group if they were over-charging us to use them! Who would?

    Dick is right ....................

    Buying Groups have to make some money by being the middleman between the original supplier and you, the customer.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    I know its different for each area, but I know for a fact that our lenses are 33.3% cheaper in the buying group. So even with the 3-5% its worth it. At least for us it is.

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    When looking at a buying group you should first decide what lenses/ frame manufacturers you are going to go with. There is no point in picking Eye Recommend or OSI if they do not do discounts with whatever labs you are going to primarily use. As other people have said in this thread aswell it may be worth it just to go directly to the manufacturers. Some manufacturers will even give you a stipend towards building your optical if you agree to carry x amount of their frames

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    Quote Originally Posted by jc17777 View Post

    Some manufacturers will even give you a stipend towards building your optical if you agree to carry x amount of their frames

    Never, ever take money or equivalent from a supplier of any sort. It might cost you dearly at a later date.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    Quote Originally Posted by Chris Ryser View Post
    Never, ever take money or equivalent from a supplier of any sort. It might cost you dearly at a later date.
    Depends on the deal that you make. If you take that deal and have in the contract that you only have to stock x number of frames from them for a 1-2 year period that may be worth it. But if its a lifetime optical thing than yes i would agree that it would be stupid to take that deal

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    What I like about any buying group is the one bill for all suppliers. Check your invoices and statements for a year. No mistakes. Just pay each month with your travel visa and enjoy the reduced paperwork and go on a trip.

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    Can someone please explain how OSI funds its operations? There is no membership fees? But they keep around 2 percent of group's total revenue??? TIA

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    They charge, or take discounts from the suppliers as well as the customers.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

  17. #17
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    There are many advantages to buying an existing practice. What province are you thinking of?

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    Redhot Jumper The main advantage is that you are taking over the stock of present customers........

    Quote Originally Posted by haliopt View Post

    There are many advantages to buying an existing practice. What province are you thinking of?

    The main advantage is that you are taking over the stock of present customers, for which you pay extra, but you also take over the material stock and equipment which may be old.

    Customers will only stay with you if you are as good as the previous owner or better, all the equipment and goods might have to be replaced earlier than when brand new.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    Quote Originally Posted by Chris Ryser View Post
    The main advantage is that you are taking over the stock of present customers, for which you pay extra, but you also take over the material stock and equipment which may be old.

    Customers will only stay with you if you are as good as the previous owner or better, all the equipment and goods might have to be replaced earlier than when brand new.
    Chris......please explain how you be paying extra by taking over the stock of a going concern operation.

    Many thanks,
    Golfnorth

  20. #20
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    Blue Jumper Chris......please explain .......................

    Quote Originally Posted by Golfnorth View Post

    Chris......please explain how you be paying extra by taking over the stock of a going concern operation.

    In any takeover of a business there are 3 main items with their subsections included :

    Name

    Assets

    Inventory

    ........and the buyer will say I want this and I do not want that. Which lets the seller decide which is the best offer.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    Quote Originally Posted by Chris Ryser View Post
    In any takeover of a business there are 3 main items with their subsections included :

    Name

    Assets

    Inventory

    ........and the buyer will say I want this and I do not want that. Which lets the seller decide which is the best offer.
    Chris......and please advise how a purchaser would be paying extra by taking over the stock of a going concern. Maybe it's me but I'm not getting an answer to my question in your response.

    Regards,
    Golfnorth

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    Redhot Jumper advise how a purchaser would be paying extra ........................................

    Quote Originally Posted by Golfnorth View Post

    Chris......and please advise how a purchaser would be paying extra by taking over the stock of a going concern. Maybe it's me but I'm not getting an answer to my question in your response.

    In today's business it is not paying more, but paying less than the seller wants,
    unless he owns a goldmine.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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    I had an incident where our buy group stood up to a luxury frame supplier who was giving us the run around, I assume because we are "small fish" to them. After that incident I felt like I was getting my money's worth and don't go for the extra 3% or so I could get negotiating on my own. Obviously this is not going to be the case for all buying groups - but it was amazing how quickly a problem I was dealing with for a month got solved in 24 hours once our buy group flexed their muscle.

    Food for thought anyway.

  24. #24
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    Quote Originally Posted by Golfnorth View Post
    Chris......and please advise how a purchaser would be paying extra by taking over the stock of a going concern. Maybe it's me but I'm not getting an answer to my question in your response.

    Regards,
    Golfnorth
    I feel that he means the tangible benefit of years of kissing bu!! that the seller has done in order to create a cash flow that can support a purchase price that is greater than the physical assets. Goodwill. A very real thing that most owners disregard as nothing. The lights are on and the phone is ringing. Location is great, the lease is fair, and employees are trained. Why do you think companies buy established businesses for a premium? Like Essilor, Google, Sun Life etc....
    I have personally have opened 4 optical offices from scratch. If I was to do it again I would buy an existing business. I would research and do due diligence and say no if it didn't fit my lifestyle, budget or gut feeling.
    Today, optical offices are selling cheap. It's because owners do not retain a business broker that focuses on our industry. The dentist and veterinarian office regularly use business brokers to market and sell their practices. Goodness. Putting an ad in a trade magazine is a race to the bottom. And then you have to deal with all the tire kickers and dead ends. A broker will do an appraisal that can be used to market and highlight the practices strengthens and weaknesses. The appraisal can also secure financing from banks at 100% to qualified Optometrists provided the appraisal is done by a brokerage that is on the approved list of business brokers. TD has just become the first bank to provide 100% financing for O.D. office/optician with attending optometrist purchases by an Optometrist and also 100% of the real estate! This is finally the same bank financing that dentists have enjoyed for years.
    I sold my previous offices to employees. A great way to go. I should have had an appraisal 1st. I sold cheap not knowing really what the businesses were worth. I was kinda happy with the amount and the buyers were very happy.
    A bunch of us are nearing retirement. Why can't we retire profitably and with dignity like dentists and veterinarians?
    A great website is ROI corp. You can see dental, veterinary and optometrist offices for sale with gross sales, appraised values, asking price and cash flow.
    Why do we retain a realtor to sell your house but think you can appraise, market and sell your own business?

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    Blue Jumper I feel that he means the tangible benefit of years of kissing bu!! ..................

    Quote Originally Posted by haliopt View Post

    I feel that he means the tangible benefit of years of kissing bu!! that the seller has done in order to create a cash flow that can support a purchase price that is greater than the physical assets. Goodwill. A very real thing that most owners disregard as nothing.

    haliopt.....................thank you for the well done explanation which makes sense all the way.
    Chris Ryser
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    http://optochemicals.com............................. http://arcoatings.com

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