The Benefits of Optical Buying Groups
SightCare is a not-for-profit membership organisation which supports the business and networking needs of independent optical practice owners and their teams, from single independent practices to small independent practice groups. For over 25 years SightCare has been providing its Members’ with a buying group called SPECS (SightCare Preferred Eye Care Suppliers) supported by over 70 suppliers of frames, lenses, contact lenses and accessories.
Many independent optometrists are time poor and the invoicing and accounts administration processes can place an unwanted strain on their team. The optician chains, multiples and mini optician groups remove this task from their franchisees and practices by centrally handling these administrative tasks. Independent practices can receive similar support by coming together in a community where the price negotiations, the administration, query handling, invoice processing and statement consolidation are all supported allowing the practice to focus on what they do best, providing differentiated quality eyecare and eyewear.
So how does it work? Well, the SightCare buying group is a non-profit making organisation, simply covering its costs and delivering the benefits back to its Members. Members will pay a small monthly membership fee by direct debit and will then be able to benefit from SightCare’s beneficial relationships with suppliers, negotiated reduced prices, possible annual dividends and consolidated invoicing administration process. The larger the number of independent practices participating in the buying group the more negotiating power and supplier interest is possible.
Practices maintain their close relationship with their preferred suppliers by ordering directly from the suppliers and delivery being direct to the practice keeping cost low and efficiency high. The SightCare buying group builds the beneficial relationships with suppliers that a single practice may struggle to achieve. Greater loyalty from suppliers who realise that they will save time, reduce costs and be able to respond to business opportunities faster as they have the tools to interact with practices more easily and effectively.
John French, SightCare CEO, said, “If a practice with a turnover of £350K paid £42 per month (£504 per year) to a buying group and was able to save just 3% on HALF the products it buys, that would represent a saving of £3,534 based on a margin of 30%. Now to me, that is worthwhile, particularly as the savings could in fact be more.”
Optical suppliers are very interested in being part of a buying group but are understandably nervous about reducing their margins, however they also appreciate the benefit of being able to attract more customers through being on a preferred suppliers list that will be issued to SightCare members. Therefore the challenge is to ensure that only independent focused suppliers are invited to participate in the SightCare scheme and agreeing a pricing and support policy that demonstrates this. Reciprocity is demonstrated to the suppliers through guaranteed payment and security as understandably suppliers only want to deal with viable professionally run businesses that operate with a minimum risk of exposure.
Being an independent practice is about having USPs and differentiating themselves from multiple opticians. Being part of a buying group will not detract from this as our suppliers are chosen by Members and must show commitment to the group with their quality and service and what the independent sector stands for. The buying group is ultimately controlled by SightCare Members’ and their needs so our Members’ views really do count. The benefits are clearly there when buying as part of a larger independent practice group, and this way independents can all keep their individuality, specialisms and uniqueness.