The Optical Vision Site

Behind The Scenes At An Optical Buying Group-Vision West

Kristi- Billing Manager with a clean desk for once! Avid snowboarder and water skier

We are very fortunate to have in our backyard one of the few optical buying groups Vision West. Vision West was also our very first sponsor and we are eternally grateful to them for their support in our blogging endeavors. Shirley and I decided to take a field trip and give you the inside track on what happens at an optical buying group and the importance to the eyecare industry.

An optical buying group negotiates volume discounts from vendors and they pass them on to their members/customers. In turn they charge a small admin fee or hold back some of the vendor discount to cover their administration costs. The admin fees/discount held back range from  3-5% of the total net sales depending on the vendor.  If a buying group tells you they have no admin fee, it’s not true- how else can they run their business if they don’t have some type of fee?

With such small margins, buying groups have to run a pretty tight ship.

Nancy:The Holiday Queen and Decorator Wonderwoman!

Vision West does it a little differently: They pass on the full discount of 20% and then charge an admin fee  (1.5%-5%) based upon monthly volume purchases. (I like the fact, they are upfront about admin fees)Not a bad gig for members and with over 200 vendors to choose from, it can be quite a monthly money saver.

The advantages of a buying group to the eyecare provider: 1.) They are not locked into making major purchases to maintain volume discount. 2.) They can receive a discount no matter how much they buy. 3.) They write only one check rather than a whole bunch of checks, saving even more money and time. 4.) Access to vendor discounts even though they don’t normally use a particular vendor. 5.) Best of all it’s FREE TO JOIN! 6.) Vision West accepts all dated vendor billing programs.

Optical buying groups are very important to the eyecare industry, I estimate they run about $500 Million in total billing, sales reps rely on them, because once an account is billed through the buying group, they don’t have to worry about getting paid, and many smaller vendors do not want to carry their own paper, so an optical buying group assures they will get paid and it helps them with cash flow and keep expenses under control- they can focus on growing their business rather than collecting money!

Jolinda (CS and AR Manager) with Chris- Jolinda is a master quilter!

I think hardest part about working at a buying group is dealing with a very sensitive subject- MONEY. Money, the root of all evil, one of the top reasons for divorces and what makes businesses prosper. The next hardest thing, the many things that a buying group has no control over: like frame returns, if you return frames on the 28th of the month and expect to have it credited against your buying group bill- IT WILL NOT SHOW UP on the bill. This is not due to the buying group, it is due to time-post office-and the vendor, but the buying group many times gets blamed.

Vision West has 4 main areas, Billing, Customer Service and Administration (IT, Controller, President, HR, Marketing) and Field Reps. All have to work together as a team and pick up the slack to get everything done in a timely manner.

Billing Team: Patty, Ruben, Claudia- A fun group and always ready for a trip to Starbucks!

The Billing Team: (Kristi- Manager) Julie (Special Projects) Ruben, Claudia, Patty.  You have to give anyone who works in front of spreadsheets all day alot of credit. All month long, invoices are emailed and mailed into Vision West. The rush comes from the 26th of the month on, where 1,000’s of invoices come into the office and must be data input, downloaded, reconciled and ready to go by the 2nd or 3rd of the month. After the last invoice is reconciled, then it’s a rush to sort, stuff, lick and  stamp and get to the post office by 1:00 pm to get out in the mail in time, so members can pay their bills timely!

Customer Service: Charis, Jennifer, Markiska (not shown) I call this area "Laugh Central"

Customer Service Team (Jolinda, Manager) Markisha, Charis and Jennifer: – From the minute that invoices are done (input) you can view your statement online at Vision West. The phone starts to ring off the hook! Where is my credit, I paid this, we shouldn’t have a bill, I asked my rep for 30, 60, 90 day billing, I told my buyer not to buy anything, what invoice is this?  (Just a few of the questions) Customer Service then goes back to the vendor and waits for a fax confirmation. Lots and Lots of faxes and phone calls to vendors. They are busy- taking up to 400 phone calls a day! The Billing Team steps in and picks up any slack.

It’s still not over- because Josh and Nancy have to hustle to pay the vendors on time so they can get the discount. If they didn’t pay on time they could be out hundreds of thousands of dollars- That means in a very short time,they have to reconcile, download and write over 200 checks!

Field Reps (Gayle and Linda) work in California, attend local society meetings, assist members in saving money, provide training and more.

Joe Mallinger, OD (CEO) and Josh Mesirow (CFO)

Admin Team: Dr. Mallinger (CEO) Josh (Controller) John (IT-Marketing) Laura (HR, Marketing, Liaison), Nancy (Bill Payer and organizer and decorator) Chris (AR) are a part of everything that is done everyday. It’s a lot of work! In between they are in constant communication with over 200 vendors on marketing, billing, promotions…..

Reusable Bag From Vision West

This part gives my treehugging soul a major lift: Vision West was the first to introduce Reusable Bags as a special promotion, They were among the first to take an Energy Challenge, and consistently work on reducing their carbon footprint (energy), you can view and pay everything online (and hopefully eliminate paper) – Their new website is up and running to give members more information and easy access to view and pay online.

As a rep for many years in San Diego, I consistently recommended Vision West as a buying group, they were great to work with!

Interview with Dr. Joseph C. Mallinger CEO Vision West

We are doing a series of interviews with leaders in Optical. Some are with people from small or large companies and others with their own individual practice but all have a unique perspective that we can learn from. Our first was with Sherrie Rogerson, VP of Strategic Marketing for Doctors Vision Center . For our second we are interviewing Joseph C. Mallinger, OD, MBA, FAAO – President/CEO of Vision West, Inc. Here it is:

Background:

For over 20 years, Vision West has helped to service and support the independent ophthalmic practice. The company is endorsed by state associations and eye care groups nationwide, Vision West services over 5000 members across the country. It provides discounts, savings programs, vendor selection and is a comprehensive resource for practice management. The concept of Vision West grew from volunteer members of the California Optometric Association (COA) striving to bring into reality a vision of a revenue stream capable of sustaining the success of the Independent Eye Care Provider well into the future. Over $7 million has flowed from Vision West into State Associations. No other ophthalmic buying group has come close to this ongoing commitment to the success of the independent eye care provider.

Questions and Answers from Vision West Interview with Dr. Joseph C. Mallinger, OD, MBA, FAAO – President/CEO

Joseph C. Mallinger OD

1. How long have you been with Vision West and tell us a little bit about your career progression there and before?

I owned an optometric practice in Carlsbad from 1976-1996. During this time I was on the Board of the San Diego County Optometric Society (SDCOS). I eventually became President of SDCOS. Following a short time away from volunteering my time to organized optometry, I ran for the position of Trustee of the California Optometric Association (COA) Board of Trustees. Moving through the chairs – including becoming Secretary/Treasurer of the COA, I was eventually elected to the office of President of the COA.  Health reasons forced me to give up my practice in 1996. I returned to business school using an Executive MBA program while being hired to work in the position of Business Development at  Vision West. I completed the MBA program and went on to become  Senior Vice President/Chief Operating Officer of Vision West. In February of the year 2000 the Board of Directors of Vision West selected me to become the President and CEO of Vision West.

2. What exactly does Vision West do and what differentiates it from other buying groups?

Vision West provides many more services than a buying group. Our Mission Statement includes a primary goal of giving back to profession. In fact Vision West is  best described as the only National Co-op Purchasing and Practice Management Group with a history of giving back over $7M to State Associations, IPAs, and other independent eye care provider groups to help promote the role of the independent eye care provider in the U.S. Vision West lists over 240 vendors, the largest selection of vendors within the ophthalmic buying group segment of our industry and a variety of practice management opportunities, online courses with the Southern College of Optometry (SCCO), and the opportunity to attend practice management including other value added courses for Vision West members only.

I say we are a National company because although 65% of Vision West members are from California the other 35% come from of all the States within the U.S. and we are endorsed by many State Associations, IPAs and other independent eye care organizations in many different States. Vision West helps independent eye care providers improve their business skills, e.g. learn how to analyze their purchases and inventory turns to make more informed purchase decisions. For example, Vision West has the ability to track top selling frames by region and zip code. This information is available on our website for Vision West members only. This data is very useful information for the individual making the frame purchasing decisions for the office. We are currently sponsoring four different, low cost ($79) seminars about how to become a medically based practice and staying current with billable medical services. These seminars are available to Vision West members only, we firmly believe in providing these highly valued programs and added services to loyal Vision West members!

4. What do you think are the major obstacles facing optical practices right now?

I see three major obstacles:

i) The current depressed economy.

ii) Not staying current with the billable medical services optometrists are now providing to patients on a routine basis, while not billing for the delivery of these very valuable professional skills.

iii) Poor management of the ophthalmic frame inventory, including the turn-rate and the costs associated with poor purchasing and the resulting high return rate associated with the ophthalmic frame products not designed to suit the needs of the demographics of the patient base serviced by the independent eye care provider.

Vision West continually addresses these obstacles with the promotional programs, marketing resources and the educational opportunities discussed above.

5. If you could change one thing about our industry in general, what might that be?

I would like to change the U.S. consumers’ perception about eye care so that they would have a better understanding and awareness of what professional services the independent eye care provider delivers on a daily basis. The entire ophthalmic product industry must do a better job informing the general public of the need for routine eye-health examinations. Knowing optometry is a primary entry point into the health care system within the U.S. is a vital message not being delivered on a consistent basis.

6. Anything else you would like to say?

I would like to quote from my mentor Dr. Richard Hopping, OD, DOS, FAAO.  His mantra is “If it is not right for the profession don’t do it” . Remembering this helps me make clear decisions and is applicable to all of us within the independent eye care provider segment of the medical community.

Buying Groups 101 By Vision West

We just got our first sponsor- Vision West (VWI)! Vision West is an optical buying group located in Oceanside, California. I want to extend a special Thanks to them for supporting the ECP, education and us!.

So I got to thinking- many ECP’s probably don’t know what a buying group it. So thought I would answer some FAQ’s.

What is a buying Group?

Since volume is the key to better efficiency, product selection and pricing, buying group negotiate best pricing and pass it on to their members.  Buying Groups are the connection between members and the best manufacturers and suppliers in the industry. This relationship helps to reduce the marketing costs for the vendors and generates volume buying savings for members.

How much does it Cost to Join a Buying Group?

In the optical profession, most buying groups do not charge a fee to join. There is a small administrative fee that is usually based upon a percentage of sales.

What are the Advantages of Using Buying Groups:

• Access to Large amount of Suppliers
• Discount available
• One bill (statement) every month for simplified book keeping
• Often special promotions and incentives are available
• Usually (depends on the company) no minimum orders

What About Reps?

Representitives will continue to service you as they have always done. All they have to do is write in the Bill to Column the Buying Group Name.

How do they handle Returns

Returns are handled through the rep or the vendor. The Vendor credits the returns to the buying, who basically credits them back to the Member.

What about Dated Billing Programs?

Most buying groups accept a 30-60 dated billing program. Some, such as Vision West accept up to 12 months. You should always double check with your Buying Group to see what they accept.

How many buying Groups can you be a member of?

Many offices are members of more than one buying group or even a networking group. Some BG’s work with more vendors than others. Even if your office is a member of ‘Networking’ group such as Vision Source, you can still be a member of a Buying Group.

What’s the Catch? Nothing is for free!

There is not a catch- you can take advantage of volume discount programs without making the volume purchases, and you have have to pay your bills by the date set by the buying group.

If you have any other questions, please give Vision West a call and they will be able to answer any of your questions in more depth.