As a dental scrap refiner, we keep a close eye on the latest trends in the dental industry. LMT recently published their 2016 Fee Survey Report. The report highlighted the challenging conditions that dental labs are facing in 2016.
It’s a Race to the Bottom
The industry is still entrenched in a deflationary spiral caused by intense competition from other labs, a slow economy, commoditization of finished products, and price competition from offshore labs. Crown & Bridge labs, in particular, are struggling with tight profit margins.
How to Boost your Profit Margin
As sighted in the article, LMT® offered some strategies to cope with the challenging environment:
- Offer a variety of products that fall into different price tiers. Your dentists will be happy to have the options and will be less likely to switch to other labs based on the needs of their patients.
- Offer stellar customer service. This was always considered a good business practice, but it is also a powerful way to differentiate your lab from the competition. Your client will remember that you went the extra mile for them and it helps to generate brand loyalty.
- Position yourself as an authority by use of blogging or speaking engagements. You will be able to charge a premium for your knowledge and experience.
- Network or find collaborative industry groups. Networking groups can help generate referrals and educate the general public about what dental labs do (many people don’t know). Collaborative groups typically can negotiate better rates from manufacturers and share knowledge and opportunities as well. (This last strategy was not cited in the article, but helpful nonetheless).
Taking one or a few of these steps can have a significant impact on your bottom line. They’re not easy and they take time, but the payoff in the end may make it all worth it. There continues to be plenty of opportunities for growth in the industry, but it will likely require a little out-of-the-box thinking to take advantage of it.
And remember that your refining returns also contribute to your lab’s profit margin. If you send in your precious metal scrap in on a regular basis, you can have an additional revenue stream to help boost your bottom line.