Steer clear of discount clubs
Now cometh the much-vaunted discount clubs. These organizations offer new clients to you if you play by their rules. Here's
Discount Club ABC, mandates a 15 percent discount and one free office visit for its members' clients. The club makes you sign
an exclusive contract forbidding you from joining any other pet consumer group.
Another, Discount Group XYZ, mandates you offer clients an impossible 30 percent discount with a 50 percent remission of a
$99 to $119 membership fee. The bottom line is, elective procedures and the competitive marketplace already force too many
discounted shopped services on the practitioner. The last thing we need are organized mandated discounts. They are unaffordable
Some pet clubs offer discounts on airfare, hotels and other travel needs to veterinarians. That would be great if any of us
had the time to take as much vacation annually as a private in the army (30 days).
A veterinarian offers discounts from drug distributors who operate with lean margins. Drug distributors today whose stock
is rapidly rising in value operate on a 20 percent to 25 percent markup. To discount meaningfully (at least 15 percent) would
require losing 60 percent to 75 percent of their profits. They can't afford that and neither can we.
If you discount an item, you have to sell more of that item to generate the same profit you would've made without a discount.
(See "Table 2" above.) And don't forget that each additional sale you require to produce the same profit carries with it an
overhead factor in receptionist and computer time.
Table2 Discounts' dangerous effects
Nobody gets rich by cutting prices unless they buy directly from the manufacturer who shared in the price reduction. Wal-Mart
and Sears can do it. But even big-box stores have trouble maintaining a profit margin from time to time. Trust me: Veterinary
practices can't discount.
Dr. Snyder, a well-known consultant, publishes Veterinary Productivity, a newsletter for practice productivity. He can be reached at 112 Harmon Cove Towers Secaucus, NJ 07094; (800) 292-7995;
fax: (866) 908-6986.
For a complete list of articles by Dr. Snyder, visit