Its Official! Vision Source is owned by Essilor!

[Jubilee]

https://vimeo.com/134883173

Essilor is no longer just a partner, they are the owner...

[MikeAurelius]

I dunno...Chris hasn't posted on this yet, so it can't be considered "official".

[drk]

I'm getting this news on another website.

Essilor purchased 80%, I'm hearing.

[Craig]

Chris,
How did you miss this first?

What happens now? Will Vision Source become it's own VSP and compete directly as a 3rd party? Does this mean that group of OD's will become direct employees of E? I guess it does and this means the future of VSP will be changing; they will open more direct doors and eventually drop any VC doc's. This is setting up to be a financial war between E, VSP and who ever else is still around waiting to bought out in the meantime.

This is like a partner lab with E; they only own a % but tell you what to do. Do the VC offices now get punished like the partner labs for not using the correct E products? It will not start out that way but will change over 2 years to complete E offerings.

I was just telling my AC guy to sell his business to Trane or Rheem; the manufacturers in all industries are just buying a new and direct distribution model.

I am glad to be an independent who's only mission is to take cash and sell the best products for the money and not be dependent on someone else to bring me my customers for the small price of my soul!

Vision Source docs sold their business to to get help running the business and now it has been sold underneath them with no net but E.

[drk]

You still have a soul, Craig? Amazing.

There's a small distinction to make (one I initially failed to see). Vision Source (the "E" is now for Essilor) asks for 5% of the practice's (net I believe) for membership dues.

There is some kind of contract that says something scary, like "We are 5% owners of your practice", IF I RECALL CORRECTLY. I hope to be corrected on this, although it's probably kind of a secretive thing.

So you pay Essilor, say, $5,000 a year to get all these great deals from essilor labs. Of course, that's your private pay patients, I guess, if you have a few of those. The rest are part of EyeMed or VSP.

Oh, and they market for you. That "Vision Source" brand that's on everyone's lips, you know.

http://visionsource.com/

[Chris Ryser]

I dunno...Chris hasn't posted on this yet, so it can't be considered "official".

I have not followed this one, because it is only on a video which I do not watch for a habit so I missed it.

However I think that I found a much more important one on the international scene where it is now official that Essilor will be fully owning the largest optical company in India within a couple of weeks, and made a separate post on it.

It is only one further step in the field of world wide domination by one corporation.

[Chris Ryser]

Founded in 1991, Vision Source is North America’s largest service network of independent optometrists consisting of nearly 4,000 members. The clinicians in the Vision Source network enjoy access to newly evolving patient channels, including an expanding list of leading medical groups and integrated health systems with whom Vision Source optometrists collaborate.

..........will they now also add the Essilor owned on-line opticals for supplying Prescriptions ?

[sharpstick777]

Essilor’s purchase of Vision Source could be hugely detrimentalto VS practices in the long run, even if there appears to be gains the first 2years. Essilor must recoup what must bean enormous purchase price and the Partner ODs are the only way to do that, andsince they can’t easily raise the % of gross they will eventually raise supplierpricing. VS had already achieved maximumbuying power for its size, so the idea that will lower your COGS throughimproved buying power is impossible. Since they will eventually eliminate everythingbut Essilor products (first by raisingnon-Essilor pricing) lowered costs after 2 years is a vain hope (I am sure inthe short run VS will lower Essilor pricing to placate fears). In fact the largest reason Essilor has inpurchasing VS is to reduce downward price pressure and reduce market competition.
You would think that Essilor’s VS would be incentivized toyour success, but they make their money on your practice GROSS, not yourprofits. You couldlose money and VS still makes their profits just fine. They have incentive to push your retail priceshigher as well. If they can raiseprices only $1 per patient, its about $4 million a year extra in profits for VSso. $10 = $40 million.
Essilor will leave everything as it is for a few years,sure. Business as usual. What you will see first is that new productsfrom non-Essilor vendors will not be introduced. Secondly, Essilor will launch new line of VSbranded “exclusive” lenses, ala VSP. Kodakis one huge branding possibility since Essilor controls that name, or a tagline “by Varlilux at the bottom in another. Thirdly, look for non-Essilorvendor pricing to creep up. Fourth, Essilorhas long stated they want to get back into the frame side of the business inthe US, so look for a purchase of a major frame company coming soon (itsprobably already in the works). Ofcourse these frames will be heavily pushed to VS Docs. There are many vulnerable frame companiesthat fit this bill including Safilo, Marcolin, REM etc. VS would give Essilor huge control of theframe market in the US and Canada. Theywill use that for sure. Marchon eyewearwill soon disappear from VS shops as well, unlike ODs, Essilor is smart enoughthey won’t feed its competition.
Also, United Healthcare is shopping itself around for amerger or purchase. Their Spectera divisionwould probably go up for sale as a result. Essilor would be the logical purchaser, and it would fit perfectly inthe new VS model. Essilor could expandSpectera through VS exponentially, and it would keep Drs in the chain whootherwise might jump. Coercion is farcheaper than incentivation.
Of course the advertising will pick up, Essiloris a terrific marketing company, but look for your marketing surcharge to payfor that. But in the end they will ownand control more of your practice revenue and income, by a tighter control onyour products and revenue. After about 7 years VS will force a rewrite of your VS contract Iam sure, and it won’t favor you. Essilor has

[spacedoc]

Essilor’s purchase of Vision Source could be hugely detrimentalto VS practices in the long run, even if there appears to be gains the first 2years. Essilor must recoup what must bean enormous purchase price and the Partner ODs are the only way to do that, andsince they can’t easily raise the % of gross they will eventually raise supplierpricing. VS had already achieved maximumbuying power for its size, so the idea that will lower your COGS throughimproved buying power is impossible. Since they will eventually eliminate everythingbut Essilor products (first by raisingnon-Essilor pricing) lowered costs after 2 years is a vain hope (I am sure inthe short run VS will lower Essilor pricing to placate fears). In fact the largest reason Essilor has inpurchasing VS is to reduce downward price pressure and reduce market competition.
You would think that Essilor’s VS would be incentivized toyour success, but they make their money on your practice GROSS, not yourprofits. You couldlose money and VS still makes their profits just fine. They have incentive to push your retail priceshigher as well. If they can raiseprices only $1 per patient, its about $4 million a year extra in profits for VSso. $10 = $40 million.
Essilor will leave everything as it is for a few years,sure. Business as usual. What you will see first is that new productsfrom non-Essilor vendors will not be introduced. Secondly, Essilor will launch new line of VSbranded “exclusive” lenses, ala VSP. Kodakis one huge branding possibility since Essilor controls that name, or a tagline “by Varlilux at the bottom in another. Thirdly, look for non-Essilorvendor pricing to creep up. Fourth, Essilorhas long stated they want to get back into the frame side of the business inthe US, so look for a purchase of a major frame company coming soon (itsprobably already in the works). Ofcourse these frames will be heavily pushed to VS Docs. There are many vulnerable frame companiesthat fit this bill including Safilo, Marcolin, REM etc. VS would give Essilor huge control of theframe market in the US and Canada. Theywill use that for sure. Marchon eyewearwill soon disappear from VS shops as well, unlike ODs, Essilor is smart enoughthey won’t feed its competition.
Also, United Healthcare is shopping itself around for amerger or purchase. Their Spectera divisionwould probably go up for sale as a result. Essilor would be the logical purchaser, and it would fit perfectly inthe new VS model. Essilor could expandSpectera through VS exponentially, and it would keep Drs in the chain whootherwise might jump. Coercion is farcheaper than incentivation.
Of course the advertising will pick up, Essiloris a terrific marketing company, but look for your marketing surcharge to payfor that. But in the end they will ownand control more of your practice revenue and income, by a tighter control onyour products and revenue. After about 7 years VS will force a rewrite of your VS contract Iam sure, and it won’t favor you. Essilor has

Great analysis: Better to be an IDOC member

[Craig]

You still have a soul, Craig? Amazing.

There's a small distinction to make (one I initially failed to see). Vision Source (the "E" is now for Essilor) asks for 5% of the practice's (net I believe) for membership dues.

There is some kind of contract that says something scary, like "We are 5% owners of your practice", IF I RECALL CORRECTLY. I hope to be corrected on this, although it's probably kind of a secretive thing.

So you pay Essilor, say, $5,000 a year to get all these great deals from essilor labs. Of course, that's your private pay patients, I guess, if you have a few of those. The rest are part of EyeMed or VSP.

Oh, and they market for you. That "Vision Source" brand that's on everyone's lips, you know.

http://visionsource.com/

They take the money off the top line and not the bottom. The more you sell the more they make no matter what. Like a super sale from corporate that franchises have to match and loose money on every sale.

[sharpstick777]

Yup, esp if Essilor has a bad quarter, they will squeeze those they have the most control over first.

They take the money off the top line and not the bottom. The more you sell the more they make no matter what. Like a super sale from corporate that franchises have to match and loose money on every sale.