Non-sequitor

[kcount]

Just throwing an idea out here.

Lux, VSP, Essilor, Safilo and all the big boys are all fighting each other for greater market share. The result has been that LC has now gone into a layoff and retraction of stores, Essilor is alienating themselves from their market base with the purchase of framesdirect, VSP is having to bring in software and frame manufacturers to increase their bottom line and expand through acquisition, and finally Safilo is in bankruptcy negotiations. All these companies are facing smaller returns on their product's and services as they continue to fight for the same market. instead of one company winning they are in fact all losing.

So I ask this question:
What happens if we, as ECP's, stop looking for greater Market Share and start looking for greater profitability?

What effect will this have on ourselves and the industry as a whole?

I look forward to everyones responses.


I can here Johns and Fezz now

[Audiyoda]

↑↑↑↑ Grabs popcorn, Milkduds, a cold one, and a comfy chair for this one.

[FVCCHRIS]

Superbowls over....I'm also waiting for the OB wizards to chime in! ;) waiting.....waiting.....

BTW, kcount, you make an excellent point with your post. I couldn't agree more and it is confusing. Chris.

[YrahG]

Since many of these large companies are moving into the retail sector and competeing with their current clients in order to turn a buck, what's stoppign anyone from importing direct from China and cutting them out of the supply chain all together?

[Chris Ryser]

Since many of these large companies are moving into the retail sector and competeing with their current clients in order to turn a buck, what's stoppign anyone from importing direct from China and cutting them out of the supply chain all together?

That is one way to go, but that is one way that can not be done alone. In order to do that you have to be group of same minded retailers that will have to fund the venture, as the China supplier will not sell their products one by one.

Then you will also have to study the on-line competition where the major 8 players sell between 3 and 5 thousand pairs of glasses per day and their sales are going up. The labwork is done overseas by people that make a fraction of the salaries paid on this continent. And they work with the most modern equipment.

This market segment is not going away soon. The major corporations will give them all the support as they are major customers an individual optical can not compete with.

However they have a vacuum at the end of the rope..............no service to adjust the glasses and few opticians that are ready to service them.

There are about 30,000 pais of glasses deliverd per day that need adjustments and service.
You should find a solution to make some money by servicing these products on which you are making nothing right now and that are selling anyhow.

[lind2020]

If you stop looking to capture more of your market, eventually your profit margin will no longer matter. It's simple math, you can either consistently grow or consistently shrink, somebody will service the market.

Sure you'll be able to retain your loyal patients, and perhaps their immediate family and the odd referral. If you're content with what you have and want to focus inwards on maintaining the status quo, by all means do so, enjoy your early retirement.

New patients and new and better ways to service them should be the ultimate goal of every day of operation in a practice. Finding out what makes the 2010 patient tick and what the trend in eyewear/care is this year is vastly important. Translating that into small, unique tweaks to your business is essential to growing and profiting.

[drk]

Since many of these large companies are moving into the retail sector and competeing with their current clients in order to turn a buck, what's stoppign anyone from importing direct from China and cutting them out of the supply chain all together?

It can and would and will happen.

Consider VisionSource! , or Diversified Ophthalmics or any of a number of buying groups. I can easily see ODs, at least, going to a FezzJohns'/Doc-in-China Oriental Importers, Inc. website and ordering the "Staff Picks" (hopefully done without a dartboard).

If it gets nasty, and these big boys think their brand licenses are that big a deal, they're crazy. It's not that big a deal to create an eyewear brand. All it needs is a credible name, like Oliver Peebles or Vuare or Paul Smythe or Emilio Vespucci, and some stark, crude POP from some 19-yo art student. (Every heard of "Eye Think"?)

There's opportunity waiting in the wings, always.

[Jacqui]

However they have a vacuum at the end of the rope..............no service to adjust the glasses and few opticians that are ready to service them.

There are about 30,000 pais of glasses deliverd per day that need adjustments and service.
You should find a solution to make some money by servicing these products on which you are making nothing right now and that are selling anyhow.

I still say that if someone were smart enough to fit, service, etc. the online purchases that they would be making money without hurting any of the other businesses. Think about it. Rather than grumbling, make a buck or two.

[drk]

Yeah! And then when "your client" runs over a kid at a school crossing because "your client" selected their own Rx from a drop-down list, I guarantee the prosecuting attorneys will say "Hey, she was only trying to make a buck or two, let's not indict her". Nor will Dewey, Cheatham, and Howe name you in their product liability civil suit.

:)!

[kcount]

If you stop looking to capture more of your market, eventually your profit margin will no longer matter. It's simple math, you can either consistently grow or consistently shrink, somebody will service the market.

Sure you'll be able to retain your loyal patients, and perhaps their immediate family and the odd referral. If you're content with what you have and want to focus inwards on maintaining the status quo, by all means do so, enjoy your early retirement.

New patients and new and better ways to service them should be the ultimate goal of every day of operation in a practice. Finding out what makes the 2010 patient tick and what the trend in eyewear/care is this year is vastly important. Translating that into small, unique tweaks to your business is essential to growing and profiting.

Your actually arguing my point. But I'll ask you, which is more important to a business, Marketshare or Profitability? You cant always have both and all of us will probably never see one. So, whats important?

[DoubleD]

Basic buisness: #1 define your market
Business should be completed as you detail in your business plan (we all update/follow this don't we?)
Define your market
Define what you WANT to do
What makes you unique
Do it better than your competitor
The customer will tell you if that works.
Modify your plan accordingly

[Barry Santini]

What happens if we, as ECP's, stop looking for greater Market Share and start looking for greater profitability?
I can here Johns and Fezz now

The internet will squash all attempts at this. Sure, you may find, at least initially for a period of time, that a new product (or even service) can be very profitable. But if it "catches on", the easy, "pulling back of the curtain" that the internet enables will reduce your profits.

Everything...EVERYTHING now has a lifecycle of profitability...just like fashion items.

The public will get used to this, both for its good and its bad.

MHO

Barry

[kcount]

The internet will squash all attempts at this. Sure, you may find, at least initially for a period of time, that a new product (or even service) can be very profitable. But if it "catches on", the easy, "pulling back of the curtain" that the internet enables will reduce your profits.

Everything...EVERYTHING now has a lifecycle of profitability...just like fashion items.

The public will get used to this, both for its good and its bad.

MHO

Barry

Than Barry your position is that market share is the road to salvation?

Lenscrafters has great marketshare yet they're laying off people, Wal-Mart has market share yet they're closing stores and laying off people.
Microsoft and Sony dominate the electronic games market, yet neither has found the path to sustained profitability in the market. Nintendo is far behind yet are posting substantial profits. ($1B in in 2007 and $5B in reserves due to years of profit. source New Yorker Magazine 12-4-2006 James Surowiecki)

Is Marketshare simply the thing we have been taught to seek out? Is Marketshare the 'Red Herring'?

[SharonB]

I am sooooooooooooooo glad I am retired! This industry has become a total "red-light district." I was trained as an optician; you know - geometric optics, ophthalmic optics, lens materials, lens usage, good recommendations, pathology, end-use, etc. But now it's become a commercial wasteland. I am so disgusted! I work one day a week, and spend most of my time figuring out insurance plans and warranties. If I hear one more time "I don't know what insurance I have - Don't you know?" I think I'll puke.

[LandLord]

For most businesses, market share means nothing. Profitability is everything.

You can't feed your kids with marketshare.

[kcount]

For most businesses, market share means nothing. Profitability is everything.

You can't feed your kids with marketshare.

Look into "The Winners Dilemma" its when you have finally won out over your competition, you own the market, but your margins are so low the business can no longer sustain itself.

Is this happening today with any large businesses?

[optigrrl]

I still say that if someone were smart enough to fit, service, etc. the online purchases that they would be making money without hurting any of the other businesses. Think about it. Rather than grumbling, make a buck or two.

And just how much do you think (E_____*) insert internet company here is willing to pay you for this "service"?

How much chair time goes in to fitting and servicing a PAL sold on a 'guestimated' measurement?

- Fitting
- Verifying/layout
- Troubleshooting
- Adjusting
- Marking up
- ETc.....

$10 ???

$15 ???

What is your time worth to service a "Lifetime" internet customer? If you think you can just name your price, think again sistah!

That internet giant will have a list of approved vendors willing to accept the "dispensing fee" offered by the insurance plan connected to it.

Who do you think will be willing to pay more if they can get it covered as a "co-pay"?

What % of the population pay out of pocket for eyewear anyway?

How much do you think you can charge to compete with what is on the horizon?

[Jubilee]

You can't feed your kids on Market Share

However you can't continue to keep profitability without people walking in your door.

It takes a balance of both.

The people at the extremes eventually lose. Either you cut so much that while you have tons of people coming in the door, you aren't making a profit due to price/expenses etc. Or you have to few coming in that you still can't pay the bills.

There are a lot of places thriving in the middle.

[Aaron N]

Lenscrafters has great marketshare yet they're laying off people, Wal-Mart has market share yet they're closing stores and laying off people.

Is Marketshare simply the thing we have been taught to seek out? Is Marketshare the 'Red Herring'?

LC Is laying off upper level dead weight and some LC central Lab people. Essilor is adding labs. I think you may see an attempt for a more substantial partnership in the US in the future.

I think market share is what any business would want. What gets lost is how to get it. I think of it like a roast in the oven. If you rush it (high heat, quick time) the outside is done but the middle is under cooked, under developed if you will. However is you cook it low and slow the whole roast is consistent, long lasting and pleasant.

I think the best example of low and slow would be Apple. They don't have huge market share, but against a company that has the market dominated, are making huge profits. They do not compromise quality for quantity and keep things fairly small to control their product.

LC and the like have their fingers in so many pies they have no idea what is going on. In order to make one decision it takes months of VPs and all their entourages to make a decision. By the time it gets implemented, the VPs have changed and are already working on new decisions.

Market share is good, building it on a foundation of sand is not.

[Jubilee]

Maybe. .it depends ultimately what do the owners want?

The doc I work for wants more $$$. He believes this would be best done through increasing more market share. However, he doesn't want to work anymore days or hours, nor is he ready to bring in another associate.

With this in mind, increasing market share won't work. However there is room to grow by decreases costs and increasing profitability. There is also promoting multiple pair purchases and premium lens sales. The whole work smarter.. not harder attitude.

Many consider the insurance industry evil for their "warehouse" mentality. The average practitioner be they medical or optometric have to see more and more patients a day to break even, cause profit on each particular patient is less and less..

When you take on this model of high volume/little profit yes you better have market share in order to survive..

[kcount]

When you take on this model of high volume/little profit yes you better have market share in order to survive..

I tend to look for Low volume, High Profit.

[Jubilee]

There are a lot that do. As long as you get enough in the doors so you can pay the bills.. and make what you want.. its a good life.