Casey and Jarrod invite 4Q's National Sales Representative John Malone to discuss ways to leverage your dental supply rep that can benefit your practice. John has over 10 years experience as a former sales rep for a dental supplier.
Announcer:
Hello, everyone. Welcome to the Millionaire Dentist podcast brought to you by four quadrants advisory. On this podcast, we break down the world of dentistry, finances, and business practices. To help you become the millionaire dentist you deserve to be. Please be advised. We do speak with an honest tongue and may not be safe for work.
Casey Hiers:
Hello and welcome. This is Casey Hiers back on the billionaire dentist podcast. Our co-host Jarrod Bridgeman is with us today and we also have special guest John Malone. John is helping us out with talking to practice owners around the country to help them understand how Four Quadrants can help. He's also had a lot of experience on the other side of the curtain as a dental supply rep. And so the title today is, leveraging your dental supply rep to benefit your practice. Jarrod, what comes to mind when you think about that topic?
Jarrod Bridgeman:
Coming from a background of not having dental, my first thought is like dental supplies? Are we talking two toothbrushes? Are we talking a teeth brush?
Casey Hiers:
John, you're going to need to tell Jarrod what that means.
Jarrod Bridgeman:
So yes, John, please tell me what all entails now. I know a lot of listeners are going to be more familiar with this than I am, but let's get that baseline out there and out of the way.
John Malone:
Okay. Yeah. So when you say dental supplies, since it's pretty broad spectrum, but I would define it as anything from the cotton ball or from the floorboards, the cotton balls in the dental office and anything in between, anything in your operations, anything that you use on a patient would be considered dental supplies.
Casey Hiers:
How many would a practice owner typically have? Do they have one? Do they have three? Do they have five? What's that look like John?
John Malone:
In terms of suppliers? You mean?
Casey Hiers:
Yeah, how many different people?
John Malone:
I would say on average physical dental supply reps that I came across. I mean, I did this for just under a decade. So I have a little bit of experience on that end of things, but let's say three to four physical dental supply reps that they would see on a pretty regular basis.
Casey Hiers:
Does each practice owner have a pretty good relationship with all of them or that they typically have one or two that are their go-to?
John Malone:
That's all dependent. Sometimes practices have one dental supply rep that's they're go-to person. And then some practices like to spread it out a little bit and use all of their dental supply reps. But it's honestly on an office to office basis.
Jarrod Bridgeman:
Why would, in your opinion, what would be the benefit of having and using multiple reps as in like, so each rep would be from a different company, correct?
John Malone:
Yeah, well, I mean, that's probably the wrong person to ask about that just for the simple fact that I don't think there is too much of a benefit for a practice for using multiple supplier reps. I always preferred and try to work towards consolidating to... if they were working with three or four, consolidating to one or two.
Jarrod Bridgeman:
So when you consolidate that down. What would be, why would you recommend that towards somebody? What would be the benefit of going from three to four plus, down to one or two?
John Malone:
Streamline efficiencies when it comes to that aspect of ordering and supplying your practice, the supply reps, or if you'd have one go-to supply rep that can come in and help manage your inventory, they can tag your office. They can do a lot of things that they wouldn't be able to do to streamline your ordering process. If there were multiple hands in the pot per second.
Jarrod Bridgeman:
That makes sense, I get that a hundred percent.
Casey Hiers:
Yeah, here's one question that we got for you, John. Any practice owner I've spoken to around the country, they all think they are getting the absolute best deal. Whether that's their spouse that's in the front office, an office manager, a hygienist that orders. I've never heard anybody say that they're not getting the best deal ever. And so talk to that a little bit.
John Malone:
Well, I would question I would have for the office manager, whoever, if I was their supply rep, I would just ask them, how do they know they're getting the best deal?
Casey Hiers:
Mm hmm (affirmative).
John Malone:
But like you said, everybody's getting the best deal. Everybody's all along those lines, but it's how do they know? I mean, do you, there's no strict definition or anything along the lines of this is what it means to get the best deal. So I would actually like to, and I have in the past when I was a supply rep, I would always ask them "How do you know?" and they say, "We are". Well, how do you know we are?
Casey Hiers:
Well that's a great, sorry to cut you off. That's a great question to simplify it. Because I was talking to one of our executives here and here it's five and a half, 6% of gross production. That should be your supply costs, but that's hard to figure out sometimes because if you have sloppy accounting and sloppy chart of accounts, that can be skewed and you actually never know, but that's the number, which is great. A lot of practice owners know that number, but to find their true number. They don't even know. Sometimes.
John Malone:
I, 100% agree. And a lot of the times what I did run into is when I did ask, back in the day, when I asked the office manager and the person doing the ordering, what their overhead costs are, their staff doesn't really know what their overhead is when it comes to supplies and merchandise that dentists typically do. But staff very rarely does. There might be one or two, but they're not the ones that are doing the ordering, but even when they don't know their overhead, they still think they're getting the best deal.
Jarrod Bridgeman:
So John, for practice owners out there who potentially buying clubs, group, purchasing organizations, entities that can purchase a whole bunch of different products from different manufacturers, from your perspective, what's your take on that? What are they gaining? And what are they may be missing out on?
John Malone:
So I definitely... back in the day, I didn't have too much experience with procurement companies as they weren't as popular as they are at least, I assume they are, nowadays. But when it comes to procurement companies like that, from my experience, you pay a procurement company, X amount of dollars, and they give you a list of companies and products that you are able to purchase. And they're saying, they're going to save you X amount of dollars throughout the whole entire year. If, I mean, from the nominal fee that they've already renegotiated the pricing for you, but where I always found a discord with that was they only allow you to buy a select number of products. And some of those products are clinical products that are technique sensitive. And if you prefer X composite over the composite that they say you need to buy in order for you to save the money that we said we're going to save you. That's when dentists have to think and practice owners have to think, what do they value more, their technique sensitive procedures, or saving a couple of dollars on a less quality.
Jarrod Bridgeman:
Makes sense.
John Malone:
product. And given it's not always less quality, but that's just from my experience that I had.
Casey Hiers:
A little bit limited.
Jarrod Bridgeman:
You're already spending the $2,500 whatever $3,000 nominal fee to this company. And then you're spending even more to get the actual stuff you need that they don't provide.
John Malone:
Exactly. And again, I might be a little biased because I come from the actual dental supply rep world. So that might [crosstalk 00:07:52]
Casey Hiers:
They were the bad guys, right? They were the bad guys and listen, you know, us for some practice owners, we don't want to scoff it at, if you can save 10 or 15,000 bucks, that's good. I mean, for a lot of practices, they want to use what they get they want to use and they're crushing it. And so that's the [crosstalk 00:08:07]
Jarrod Bridgeman:
Yeah I want to say we're not going either way on this. This is not a recommendation by any means to our clients out there. People are listening. If what works for you works for you, keep going at it.
Casey Hiers:
John, I want to bring up another little curve ball here, section 179, typically in the fall, people hear that as an excuse to buy things. On the supply world, on that side of dental. What do you know about section 179?
John Malone:
Well, that's a good question. Being a dental supply rep, majority of the time at, towards the end of the year, when I know that dentists are typically meeting with accountants and blah, blah, blah, and all that kind of good stuff, I would talk to the practice owners and dentists and say, "Well, have you thought about section 179?" And it's like, Oh yeah, we've heard about, I was like, "Well, if you can buy X amount of dollars in equipment, you can get accelerated depreciation. And basically don't need to pay Uncle Sam money in taxes". But now that I am a little bit more versed on it, I wish I never said some of that stuff because it doesn't make much sense.
Casey Hiers:
I cover this in our, in our presentation if we present continuing CE round. But, but yeah, you and I were discussing that where all too often, that section 179 gets thrown out as a great rationale for buying a six digit piece of equipment. And our comment is always, unless somebody is looking at a practice owners profit and loss statement, balance sheet taxes, and has a real good understanding of the complete financial picture. They really have no business throwing out section 179 and if you need that to offset taxes, your CPA and your accountant has dropped the ball somewhere along the line, if you need to do that. There are some instances where it makes sense, I'd say eight out of 10 don't, but I wanted to get your take on that.
Jarrod Bridgeman:
As someone who's not a finance guy or a tax guy... again, I'm marketing and videographer person... is I feel like that is something I'd be very easily. I know if there was the right word, but duped into feeling that I personally know, will buy my own camera equipment and things like that and write it off on my taxes. Now, of course, I'm talking a couple thousand versus a hundred thousand dollars piece of machinery, but I, again, it feels that is a very almost like Indiana Jones and Brady's lost Ark. We got that golden monkey thing and you're like, Ooh, should I take it or not? And he grabs it and here comes the ball, rolling down.
John Malone:
100%. And to boil it down very simplistically, back then, all I knew was section 179 accelerated depreciation. That will the two terms that I knew. And I knew nothing about them.
Casey Hiers:
John, I feel validated because, I felt like that was the case. But yeah, that is, that is a very short-sighted way to buy equipment, but makes you feel good, I guess. Right?
John Malone:
Yeah. Checked it off the box. [inaudible 00:11:11] and you know what I'm talking about.
Jarrod Bridgeman:
It's that retail therapy.
Casey Hiers:
So let's jump into this. This was very memorable. I was at a law school graduation, Pepperdine on a cliff over Malibu, overlooking the ocean, beautiful scene, a bunch of attorneys. And the speaker basically said, "Listen, there's a lot of lawyers and attorneys in this country, and there's a lot of bad ones choose to be a good one".
Casey Hiers:
So let's drill that down. There's a lot of reps. There's a lot of reps out there. Some are just order takers. Some are using different tricks in the book to try to get you to buy things. But there's also a lot of good ones out there that actually want to be helpful and use their regional knowledge to help the practice right? So John, maybe break that down a little bit. What to look for in a good rep or how to know when to maybe invest in somebody who wants to be a helper.
John Malone:
Well, that's a great question. Thank you for asking that. So when I started as a supply rep, I started right out of college and I had a rough territory. I mean, they'd give a list of names and you'd have to call them and none of them were buying from our company. So I spent the first couple of years trying to prove myself and get in with these dental offices to at least give me the chance to show them what I can do and how I can do it differently. It's a little, it's pretty close in my heart when it comes to offices and their loyalties. I respect loyalty above bar none, but I would always suggest if you haven't already, having a conversation with the other supply rep, the one that you're not using and just not saying, give them your supply business and stuff like that, but just seeing what they can offer.
John Malone:
Because all too many times, I came around offices and they're very close to company X. They'd been with this rep for 20 some years, and he's really nice guy, and we all love him. And, but you have to sit back and think, are they invested in your practice? Do they truly care? And do they want to partner with you? On the other hand, are they just somebody that comes in every other week has a good rapport with the office, gives everybody a high five, takes the order and comes back two weeks later. So you have to balance that, but my suggestion would be to have a conversation with a supply rep that you're not currently having a conversation with, just to see what they have to say.
Jarrod Bridgeman:
Yeah. That totally makes sense. Working here at four quadrants, I've learned how we are a large umbrella that has all the CPAs, financial planners and everything under one roof. And so what I'm trying to compare it to is, is how there are certain people who've had the same CPA for 25 years. Because it's my cousin, my wife's cousin or something along those lines and they're maybe trying their best, but they're not dental specific. Or they just keep trudging along what they think they know. And they're not doing what's best for you. They're doing what's best for them to make their money.
John Malone:
Exactly. And I actually, I appreciate that outlook on that topic, but I'm going to take a step back and along the lines of what you're saying, a lot of people say they have, and they work with, the best CPA. Just like they say that they're getting the best deal. And like I said before, when you have to ask is how do you know you're working with the best CPA? How do you know your CPA is great because nine times out of 10, you can't really answer to that. And it's something that I think you should be open to exploring, at least hearing other avenues and other companies and going on that route.
Jarrod Bridgeman:
And I agree the tough part is, and this is companies, this is in personal relationships. People are afraid of change. And that's a big part of it. I feel I maybe stayed married a couple of years longer than I shut up, but because I was like, ah, what am I going to do? But that's when you think about it, like people are just afraid to see other options. I shouldn't have called my ex wife an option, but you know what I'm getting at with this?
Casey Hiers:
Well, and, and John, to your point, even if you have a great relationship and you lik them maybe meeting with another company's rep, you're either going to confirm that you are indeed getting a good deal and you're in the right place, or you're going to learn something and you're potentially going to going to be better.
Jarrod Bridgeman:
And if you're already getting that good deal, then props to you. That's a little ego boost right there.
John Malone:
Yeah. I mean, there's, there's no reason why they shouldn't meet or have their options open because the worst thing that can come out of it is confirmation that they are getting the best deal, they are working with the best firms, are working with the best CPA. That's the worst thing that can come out of it. The best thing that can come out of it is we come to the realization that maybe this person or company that you're currently working with is not the best. And you may benefit financially and personally everything, having further conversations with that other person or company.
Jarrod Bridgeman:
Still with the keeping the options open. So let's say I'm already, as far as I know, I'm already getting a really awesome deal. I've already confirmed this, but then I start looking outwards in terms of online shopping, what would you say towards that? If someone decides to take it on their own and visit different sites that offer these product?
John Malone:
That is a really great question. Thank you for asking that again. I might be a little bit more bias coming from being a physical, on the ground supply rep all those years, but in my personal opinion, if you know that you're getting a great deal and you go online and you're finding a better deal, I feel like you may be doing your practice, a disservice for the simple fact that if it seems too good to be true, it probably is. And there's a lot of online companies out there that are technically not authorized dealers for some of the products and manufacturers that they're selling. So my advice is to be careful and keep your guard up when doing something like that.
Casey Hiers:
I have found random products online, that I'm excited because they're much less expensive. And then the expiration date is much more accelerated or there's a reason why John, to your point, I appreciate you pointing that out for the listener.
Jarrod Bridgeman:
One of the things I can tie that into is last year, I found this really cool stabilizer for my camera. And it was $300 - $400. But then I found a site that was like, Hey, ours is on the super special right now for 50 bucks. And I was like, Oh, heck yeah, I'm going to do that. So I ordered it, took two months to get in and it broke literally the day I used it.
John Malone:
Oh yes. And I mean, coming from my personal experience back then, I had a lot of offices that felt the need that they would go online and find a better deal. And I'll refer back to if it seems too good to be true, it probably is. And if they've ordered something, it would come in weeks later, it might not even come in at all. It could be the complete wrong product. It could be. For example, there was Cavaside. I had an office order Cavaside, which is a disinfectant, from an online company and it came to the office probably two weeks after that. And it was a bottle of Lysol with a Cavaside sticker on it.
Casey Hiers:
Oh wow. And when things like that happen, it's then upon the office staff or the dentist themselves to make a return or track down and figure out how to get that money back versus having a rep who may or may not have made an honest mistake, but they will take care of it for you.
John Malone:
Exactly. And I mean, good luck trying to return something that is incorrect or you get X amount of days later, another positive actually having a physical rep on the ground is I'd be very hard pressed to think of any company out there, any distributor or supplier, or anything along those lines that are authorized suppliers for the products you're buying, that they do not get to your practice within two business days. Outside of like holidays, seasons, and Christmas and stuff like that because FedEx and UPS are kind of backed up. But any normal times, you will typically get your products that you order within two business days.
Casey Hiers:
Well, John, that's some good insight and I appreciate you sharing that with us. Obviously our listeners have representatives and the good, bad and ugly, but I would say talk to your representatives, talk to other representatives, see how they can help you with they can help you with, if you think you're getting the best deal, challenge it. But Jarrod, thank you, John, appreciate it.
Jarrod Bridgeman:
Thank you.
John Malone:
Of course, anytime
Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you. The listener for tuning in the Millionaire Dentist Podcast is brought to you by four quadrants advisory to see if they might be a good fit for you and your practice. Go on over to fourquadrantsdvisory.com and see why year after year, they retain over 95% of their clients. Thank you again for joining us and we'll see you next time.
