SMALL BUSINESSES MUST find ways to squeeze every dollar of profitability out of sales and opticals are no exception. The compounding pressure of maintaining competitive pricing, making money while “in-network,” and cutting unnecessary expenses makes it a balancing act to remain profitable. We get so fixated on eliminating the small expenses that it actually hinders our ability to make money. Dr. Brianna Rhue put it best, “In optometry we are unknowingly tripping over dollars to pick up pennies.”
As the creator of FrameTurn, I help hundreds of opticals optimize their inventories. It is common to sell a frame off the board to speed up the process in making glasses for the patient. The optical will then wait until there are multiple frames that need to be ordered from one manufacturer before reordering, to save on shipping. In the meantime the frame can’t sell because it’s not on display. You simply cannot sell what you do not have!
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One of the biggest “dollar trippers” is waiting to reorder frames with the intent to save on shipping. Shipping adds up, but consider the opportunities missed in the meantime. How many times have you missed selling that frame just because you didn’t have it to show a patient?
Here are four adaptations you can implement in your inventory management to keep from tripping over dollars.
1. Identify your A-Styles. Every optical has A-Styles and B-Styles. A-Styles sell well, while B-Styles move slower. What might be an A-Style at one office could be a B-Style at another. Take a look at your inventory sales and identify how often each style has sold in the past year. Specifically select frame styles within each brand, not just hot selling brands. Identify the top sellers as your A-Styles.
2. Deepen A-styles. Backstocking is often mismanaged, so I rarely recommend it. Rather, go two to three colors deep in your A-Styles on your frame displays to make sure you are never without that style because of shipping.
3. Set a reorder day. If a frame was sold yesterday evening and another sold by the same manufacturer earlier today, it would be silly to place two separate reorders and accumulate the $8+ shipping on each. But waiting until there are X number of frames by a manufacturer before placing a reorder is equally as silly because the timeline is unknown. Instead set a day of the week and place all your reorders that day. This will allow for a consistent timeline for reorders while reducing some shipping costs.
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4. Avoid waiting for the sales rep. If your A-Styles have sold, they need to get back in there right away. Your rep wants you to reorder the A-Styles because the chances of it selling before they even visit is very high. Follow the QR code for a deeper breakdown on mishandling of A-Styles, B-Styles and New-Styles.
Don’t let the fixation of small expenses hinder sales in your optical. Reflect on how you have always done things and rethink the process to maximize your profitability.