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.
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!
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.
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 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.
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…..
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!