The top three priorities for every optical dispensary are always to be as profitable as possible, have the right selection for your patient base, and to have the fastest turnaround time to deliver a complete pair of glasses.
What if I told you there is a way to ensure that those goals are being met using a system called board management?
Board management is an inventory system designed to lower the overhead cost and decrease the number of frames in understock by keeping the frames on the board and drop shipping to your lab of choice. Board management also eliminates time spent buying every quarter with 20+ sales consultants, freeing up more of your opticians’ bandwidth for them to focus on servicing your patients.
To begin the process of setting up board management in your optical, you will need to determine the turn rate of every brand. Most optical dispensaries have far too many brands. By using turn rate to streamline into fewer brands from less companies, your practice should earn higher rebates and deeper discounts with your lines which increases your profitability while still having the right selection for your patients.
Using an inventory management system, you’ll want to look at how many frames from each line you have sold in twelve months and divide that by how many board spots you are going to give that brand. The ideal turn rate is anywhere from 2.8 to 3.0; anything less than 2.8 means you need to reevaluate the line and the real estate it takes up in your office, and anything beyond 3.0 needs more representation in your office.
Example: My optical sold 150 units of Brand A in 12 months and I want to give them 35 board spaces; that gives me a turn rate of 4.3. The solution would be to increase Brand A to about 50 board spaces to reach that “sweet spot”.
Working with your sales consultants is going to be crucial on deciding which frames, colors, and sizes to put into your office to curate the ideal assortment. Allowing an inventory check every eight to ten weeks will help ensure that you have the right assortment on your boards and that they are paying their rent. Remember, your success is their success.
The last step in an effective board management system is integrating drop shipping to the lab of your choice. Once you begin this, you’ll notice that the turnaround time is much faster and less expensive. You are eliminating the cost of the frame being shipped to your office*, and then paying again to ship it to the lab. Because the frames are staying on the board, you will always have your best sellers on hand, ensuring that you never lose a sale for not having the right product in your office!
In summary, board management eliminates cost, increases profitability, and frees up time for your opticians!
*Shipping policies vary per vendor.
article written by Lindsay Romah
4 thoughts on “Board Management: How to Know if Your Vendors are Paying Their Rent”
Thank you so much for this incredibly informative article.
Another great analysis: Look at the number of frames you sell each month by price point and how much is your profit on each frame sale? Look at total frames sold and then divide each by number of frames sold at each price point. You can then determine where your business is coming from.
Are you supporting those reps that can make your optical more profitable?
Great information to share with both sales consultants and accounts! Better profitability and more time for the opticians- a win-win for everyone! Thank you for sharing!