ProVision has announced that eyewear wholesaler Sunshades Australia will become the central warehousing facility for many of the group’s 19 eyewear suppliers.
As a result, ProVision members will be given access to a single online portal where orders can be placed for over 1,000 of the group’s best selling frames. Sunshades will hold stock on behalf of other wholesalers and send ordered frames to the optometrist or their laboratory of choice for lens fitting. Optometrists will continue to be invoiced by the originating wholesaler.
The reaction to the announcement has been mixed, with many ProVision frame suppliers expressing surprise and concern over the need to send their best sellers to customers via the competition.
Steven Johnston, CEO at Provision said, “some suppliers have expressed reservations, and some have said overtly, ‘it’s not for me – I am not going to give my product to a competitor – they’ll find out which are our best sellers, copy them and so on’, but in reality, they can get that information easily anyway – they just need a couple of friendly retailers to talk to.
“I respect (those concerns) – they feel they’re putting their intellectual property at risk by putting it into the hands of the competition… it takes a leap of faith and we have a sufficient number of suppliers that have the willingness to do this.”
Mr. Johnston said he is confident that eight of the group’s 19 suppliers will make their brands available through the Sunshades distribution facility, although they are yet to sign on the dotted line.
As a result, he anticipates the Sunshades distribution facility will become a “one-stop shop for a significant proportion of purchases”, those being “the best selling bread and butter products” as opposed to the “left of field” frames.
“Sunshades won’t stock every product that every optometrist wants – but it will distribute between 1,200 – 1,500 of the 24,000 products we currently make available to members.”
Mr. Johnston said these orders would account for anywhere between 20 – 80 per cent of a practice’s orders depending on the type of stock they typically carry.
12 Months Down the Track
According to Mr. Johnston, the original idea for a centralised distribution model “germinated” in January last year when the group identified that the current supply chain wasn’t working.
“We have many, many customers dealing with many, many suppliers – there’s no economies of scale, no aggregation of demand for independents… and meanwhile big companies are leveraging on their size and scale.
“Hopefully this (new distribution system) will work really well for our ProVision members and once it’s rolled out, we will make it available to other independents in Australia as well.
He said the Sunshades agreement will create efficiencies for independent optometrists and help them maintain stock of the best selling products. He said while many wholesalers enable optometrists to stock a sample frame and order on an as needs basis, few optoms take advantage of this because the process is too cumbersome.
“Right now, we have 19 preferred suppliers of frames, and each one will argue they have a terrific online ordering system – the problem is that it becomes the practice owner or employee’s task to know each of those 19 different systems, passwords and protocols, so they can place orders.”
As a consequence, he said optoms often sell a frame, trace it, order and fit the lenses then hand the completed product on to the customer without re-ordering. The frame is taken off display and potential sales are missed.
“Taking the time to access one of 19 different online portals to replace stock takes discipline. We can make the whole process much easier and more efficient by bringing all of those supply systems together.”
Suppliers to Benefit
He said the new distribution model will deliver benefits for Provision suppliers too. “It’s hard (as an Association) to go to a preferred supplier and say ‘here’s a way I can help you grow your business through a membership’. Until now, all we’ve been able to offer them is centralised billing and access to members via trade shows… there has been no tangible way to drive business through our suppliers’ doors.
“Our centralised distribution service is a way to do that – to leverage on one single delivery system and to keep our suppliers’ best sellers on the shelves in practices.”
He said an independent consultant was engaged to help ProVision determine the best distribution model going forward. That consultant recommended ProVision “partner with a business that understands the product we are working with”. He said having looked at the options, the consultant recommended Sunshades because of its superior warehousing set up and cost structure.
Sales Reps Nervous
Mr. Johnston conceded that sales representatives are nervous about the decision, which could impact the way they operate, but believes they should take the opportunity to adapt a fresh approach which will benefit the entire profession.
“They need to be out there having conversations (with practice managers) about why the practice should sell their brands – not out there with eight black suitcases, each loaded with 50 frames, asking ‘what products do you want?’. So it’s about taking on an education role rather than an order taking role – about focusing on best sellers making recommendations according to the practice needs and preparing people in practice to hold conversations with the consumer about why they should pay the appropriate price to get the best quality, materials and so on.
He said ultimately the transaction will still happen with the original supplier – and the representative will receive the appropriate remuneration, it’s just that the order will be fulfilled through Sunshades.
“So nothing is changing except that the representative is not taking the order,” concluded Mr. Johnston.