Outsourcing hitting hard for small Aussie dental labs

[rachib73]

We are a small lab is Queensland, Australia. In the last six months we lost two of our biggest clients to outsourcing labs. It has been financially tough for us as we are not able to compete with their low prices. We have had to reduce our prices just to have a look in. I was reading one post from someone in China from one of these labs, and I just wanted to say your labs are not good for the Australian economy, stay away. Surely you have enough of a market in your own country without deliberately undercutting our country's prices just so you can
monopolise.

 

[stt672]

It's sad but this seems to be the norm. Labs selling restorations for as low as they can go. What I find kind of funny now is the dentist are starting to experience this also. When a doctor is selling his crowns for $1200 and then finding out his competition on the next corner is charging his patients $600. Nobody is going to be able to make a living at this. Who knows where this will go or stop. Until we can get this nations and the world economy's going again I'm afraid this is going to be the norm.

 

[Tom Moore]

If someone does a job with a very high labor content in the finished product and it can be easily outsourced it probably will be.

In this country we liked the idea that we could make good money and spend it on imported goods to make that money go farther and farther. When it was textile industry we said little and did nothing, when it was steel industry and many others we did the same, but when it came to our little industry the voices became high and shrill, save us from the evil ones.

I see the incongruity of our state lab association selling "Proudly e in Texas" stickers to the members to put on their work so the assistants have something to read and remove but when I look at the bottom of the logoed coffee cup I bought from them its "e in China."

The idea of the competition doing less so their competition can survive is not in any book on capitalism I've ever read. This country does need to do some work on trade balance but when you owe the other country a ton of money our bargaining power is not very strong.

I've sold imported lab work going on 10 years now and it is now part of the marketplace here. My advice is you need to train to do the things in the industry imports can't service very well and charge more than you do now for those type services. Then you get back the money offshore took and work less for what you get. That is happening here is some domestic labs are doing very well but we are also losing a lot of labs that would not or could not make the changes necessary.

 

[CatamountRob]

In this country we liked the idea that we could make good money and spend it on imported goods to make that money go farther and farther. When it was textile industry we said little and did nothing, when it was steel industry and many others we did the same, but when it came to our little industry the voices became high and shrill, save us from the evil ones.

I think it would be safe to say that those within both the textile and steel industries were screaming "save us from the evil ones" just like the lab industry is now, but it fell on deaf ears just as it is now. Low price is a powerful motivator. Tom is absolutely right that any labor intensive product is going to migrate to where labor is cheap. I think that the only way to compete is to increase productivity through the use of technology and attempt to service your accounts in a way that offshore can't.

 

[paulg100]

"My advice is you need to train to do the things in the industry imports can't service very well and charge more than you do now for those type services. Then you get back the money offshore took and work less for what you get."

great advice, its working exactly like that for me.

Unfortunately that kind of work is the small peice of the pie, so lots of labs will still be going under.

The techs that could see this coming and starting working towards servicing that side of the market were training for it many years ago and are already establishing them selves. Whilst these guys were training they had the bread and butter volume to keep things going in the mean time.

I also think the part of the market requiring those more specialized services is less transient. You dont just chuck out flyers with cheaper prices to get the account, its not what those clients are looking for. By the nature of that kind of work and the communication involved, you end up building stronger relationships and it takes a lot for them to move labs.

Those who have done nothing may be leaving it to late.

 

[martintay]

I would be interested to know which part of the market you mean paulg , as i have friends who are producing very high end work . They to are losing clients to cheaper labs in the UK ! Thankyou.

 

[paulg100]

"I would be interested to know which part of the market you mean"

the part which requires the specialized services that off shore outsourcing cant provide.

Was price the only reason the clients changed labs? were your friends charging a reasonable fee?

I wont mention names but i see some crazy high pricing from some labs published fees, for work that in some cases is nothing special. we ARE still in recession which means charging competitive fee's.

in order to lower my fee's id have to cut corners which means quality goes down. Labs doing this kinda work for lower than market fee's ARE cutting corners which will show in the work sooner or later.

 

[martintay]

Thanks for the reply , they do very high end work at a prety high price in my opinion. The niche is where its at but as you said that is a small portion of the pie . Saying that i feel their work is good value if the dentist and patient want to pay for that time and quality !

 

[paulg100]

well i wasn't really referring to the high end niche stuff Martin, More specialist stuff like large multi unit implant work, smile design work, occlusual rehabilitation etc.

I know the off shore labs offer this stuff but you need to work closely and have excellent communication to do this work at a consistent high standard and i dont think the off shore guys can offer that.

 

[Flipperlady]

"I would be interested to know which part of the market you mean"

the part which requires the specialized services that off shore outsourcing cant provide.

Was price the only reason the clients changed labs? were your friends charging a reasonable fee?

I wont mention names but i see some crazy high pricing from some labs published fees, for work that in some cases is nothing special. we ARE still in recession which means charging competitive fee's.

in order to lower my fee's id have to cut corners which means quality goes down. Labs doing this kinda work for lower than market fee's ARE cutting corners which will show in the work sooner or later.

I've taken a few business and marketing classes in the past and they teach you to study your target. There is a reason you see lots of
pretty "girls" in the dental magazines, they have studied their market as to what will help sell dental items. That's saying the biggest (but changing) part of the market is a middle aged man who wants the stability of a good marriage but likes to look around I'd play up on the
stability part and be a good wife and look the other way while they fool around

 

[JohnWilson]

I've taken a few business and marketing classes in the past and they teach you to study your target. There is a reason you see lots of
pretty "girls" in the dental magazines, they have studied their market as to what will help sell dental items. That's saying the biggest (but changing) part of the market is a middle aged man who wants the stability of a good marriage but likes to look around I'd play up on the
stability part and be a good wife and look the other way while they fool around

What the hell are you talking about?

 

[Flipperlady]

I'm saying that the docs are going to try other labs That's just the way it is. They'll always come back to the one that offers the best service and consistency. I wouldn't panic if a long term doc goes to another lab because of lower price for awhile, they usually come back (unless they don't
I was trying to talk in your language John!

 

[JohnWilson]

No you were talking in "I am a beaten down female tech that hates men and has no clue about business language" Thats why I couldn't understand you.

We all know why clients stray, if you really think that they are leaving because they found someone sexier, you have lots of other issues.

Lets stay on topic here, I won't call you out on any other of your very obvious hang ups and how about you stop stereotyping me.

 

[Flipperlady]

Cheaper. John, cheaper. If I were going to stereotype you, I would need to know if you were the wife or the other woman?

 

[CatamountRob]

I've taken a few business and marketing classes in the past and they teach you to study your target. There is a reason you see lots of
pretty "girls" in the dental magazines, they have studied their market as to what will help sell dental items. That's saying the biggest (but changing) part of the market is a middle aged man who wants the stability of a good marriage but likes to look around I'd play up on the
stability part and be a good wife and look the other way while they fool around

You've been reading too many of Tom Moore's posts. It's starting to rub off on you.

 

[Flipperlady]

Nah, I'm just joking around. John can delete them if he wants.I'm not a very serious person most of the time, but then sometimes i am. I did mean the main point though for the original poster not to be too worried.

 

[Tom Moore]

There was a time when the cheap offshore labs could barley deliver fit, form and function. Then domestic labs could care less.

There are labs offshore now that have spent years bringing in trainers from most of the big material suppliers and guru techs for all over the world to train them in aesthetics. They are not going away and they are getting better every day.

The same water floats all boats. We all effect each other and price pulls down stronger that it pulls up. The lab in the UK is pushed by their competition to look at you and use price as a way to inter your market.

As the offshore labs doing more of the work domestic labs were doing they are forced to do work that offshore labs can't do well right now. We have (guessing) 5000 small labs in this country. Is there enough of the work described on this thread to keep them all busy? I think we are going to see another round of labs closing the techs going into other professions.

knock,Penny,knock,Penney,knock,Penny. Half the graduates from dental schools here are now female. We work for lots of them. Most selling is done with females even to females.

I'm not sure males fool around near as often when they are treated well at home. I never have, not because I have not been tempted but because of the pain it would cause my best friend in this world that always has my back.

 

[Tom Moore]

You've been reeding too many of Tom Moore's posts. It's starting to rub off on you.

Why you, You need to be thankful to the powers that be if I had not had a learning disability and dyslexia I would have attained a position to have you jailed for those remarks.

 

[rkm rdt]

Living that close to Quebec is punishment enough!

 

[k2 Ceramic Studio]

"

The techs that could see this coming and starting working towards servicing that side of the market were training for it many years ago and are already establishing them selves. Whilst these guys were training they had the bread and butter volume to keep things going in the mean time.

I also think the part of the market requiring those more specialized services is less transient. You dont just chuck out flyers with cheaper prices to get the account, its not what those clients are looking for. By the nature of that kind of work and the communication involved, you end up building stronger relationships and it takes a lot for them to move labs.

Those who have done nothing may be leaving it to late.

Well said Paul, surgeons need to know that you can communicate with them when doing high level work, that you are able to get a case to them asap for a try in, even better to be there in person and see if it is working and how you can tweak it, I did a full arch implant try in/ verification jig last week and the fit was great but the incisal level was to short, the surgeon thought it was fine and the patient was over the moon because he could see a full arch and not a denture but I could tell that the incisal height was lower than his old denture and smile line, You need input from all three people not just a faceless dentist churning out work. Like you said, know what your doing and build stronger relationships.