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    5 steps to maximize your optical profit

    Keep your net on target by paying attention to cost of goods

    Industry benchmarks suggest that product sales (eyewear and contact lenses) account for 61 percent of an optometric practice’s gross revenue; eyewear sales alone are 43 percent. What’s more, median gross profit margin on eyewear sales is 61 percent.1

    With these statistics in mind, ODs must pay attention to acquisition costs of goods to have a healthy optical profit margin. No matter how much ODs want to leave buying and selling optical goods to their staffs, ODs must be active participants in the optical to maximize profits. ODs are busy managing their practices and seeing patients, but abandoning optical frame buying to a staffer might be a huge financial mistake.

    Consider that delegating frame buying to a team member means spending thousands of your dollars to purchase an inventory based on what frame sales representatives are telling your buyer you need. Remember, frame reps have a job—to sell you frames—and they make sales commissions based on how much you buy. Frames reps bring value to the equation to be sure, but forgetting that ultimately they are there to sell you as much product as they can is naiveté.

    Related: Glasses and contact lenses: Have they become a commodity?

    Remember that your buyer will typically receive a free frame or spiff from the frame rep for placing the several thousand-dollar order. It’s a win-win for the frame rep and your buyer…but is it a win for you, the OD?

    If the doctor is not an active participant in her own optical, how will she know which frames sell the best? The “number-one selling frame in the country,” which usually means large markets such as California or New York, might be a loser in your practice.

    Use the frame-buying strategies below to help amplify net profit from eyewear sales.

    1. Know demographics of your practice patient base

    ODs must be familiar with the fashion and optical needs of their patient base and ensure the optical inventories frames that are appropriate for the type of patients they have in their practice. Know if your patient base likes outdoor sports, high-end designers, or the latest trends. This information will drive your frame purchases.

    The doctor needs to take the time to talk to patients, asking what kind of frames they are looking for (zyl, metal, rimless, drilled, lots of color, more conservative, avant garde, etc.) and then ensure these types of frames are available in the optical.

    Consider this: If your optician leaves the practice for another job, you will know what types of frames your patients want, what types of frames sell well in your practice, and where to purchase those frames, but only if you are actively involved.

    Now that you know what your patients want, it’s time to go shopping. One strategy to buying frames is stocking up at optical trade shows, such as Vison Expo. This is my preferred way of shopping.

    2. Concentrate your frame-buying dollars with only a few vendors

    Such a move will make your account stand out because of higher sales volume. In other words, if you are willing to spend a lot in one order, you can negotiate deeper discounts with frame manufacturers beyond their normal discounts. For your money to make the biggest impression with frame vendors, concentrate optical purchases with only a few, select frame vendors.

    For this strategy to work, be willing to spend $15,000+ in a single order and know that it is acceptable on bigger orders to demand deeper discounts than what is being offered.

    Ask for more favorable payment terms, such as 30-60-90-120 days. Sometimes a vendor will offer a discount, such as 50 percent off list price, without payment terms. Other times, 180-day terms are offered with a lesser discount, such as 30 percent. Successful negotiators have forged relationships with regional sales managers of frame manufacturers, and this will help obtain the best deal possible.

    Related: 6 steps for an optimal optical inventory

    Buying in bulk requires several hours with a frame vendor, so it is best to schedule these appointments in advance of the trade show. Your local frame rep should be able to put you in touch with the right person.

    Regional sales managers usually attend trade shows, and I find more success working directly with them in placing bulk orders. Bulk buying does not occur on the exhibit hall floor; instead, sales take place in designated suites on- or off-site. Arrive prepared to spend money, and don’t be afraid to ask for deeper discounts and terms than what is offered.

    No one will care more than you about saving the last dollar on the order. Every dollar saved on frame acquisition costs will translate into a higher profit margin on optical sales.

    Don’t forget small, independent eyewear manufacturers when considering frame selections for your optical. Many times smaller, independent vendors have high quality and fashion designs at much lower prices.  

    Nazanin Galehdari, OD
    Dr. Galehdari is in practice with her husband. She is a 1998 graduate of Southern California College of Optometry. In her free time, she ...


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