“Deliver the goods” – VFC Featured in Today’s Veterinary Business
Veterinary practices can fulfill client needs — and reduce inventory costs — by working with a vendor to ship drugs and food directly to the pet’s home.
Today’s veterinary clients can easily go online or stop at a human pharmacy to purchase their pets’ pharmaceuticals. From their perspective, what could be simpler than filling a personal prescription and a pet’s prescription at the same time? Unfortunately, it means in-clinic veterinary sales suffer.
Some practice managers looking for ways to bring lost pharmacy dollars back in-house are partnering with prescription-fulfillment companies to offer clients an online shopping experience customized to the individual clinic. Providers set up a personalized website for the clinic through which clients can order pet medications and even therapeutic pet food. A clinic veterinarian approves all drug orders before they are shipped. “Our online stores allow veterinary practices to reduce overhead and expand product availability, without the need to physically stock every item,” said Christy Fox, online store coordinator for Midwest Veterinary Supply in Lakeville, Minnesota. “Each practice’s online store is unique, as the clinic chooses which products to offer and is able to customize the pricing for those items, so they’re fully in control of their profit margins. “Items that are sold through distribution are sold through the online stores at that same wholesale price. This allows practices to keep more profit per item.”
Why Clients Go Elsewhere
In general, cost and convenience are the two main reasons that clients shop outside the clinic. Many clients get product recommendations from their veterinarian, walk out the door and buy the pet medications elsewhere. “Historically, some veterinarians were marking up products two to three times their cost in order to cover their inventory and handling costs,” said Patricia Panaia, vice president of B2B sales and marketing at Portland, Maine-based Vets First Choice, which provides home delivery on behalf of clinics. “When the internet came along, all businesses now were subject to price transparency, so pet owners could shop and see that they had choices. Because veterinarians were not really thinking about being competitive on the price for popular products, pet owners decided to take advantage of other places.” A veterinary professional might think that all clients buy elsewhere strictly for the cost savings, but that assessment isn’t necessarily true. Many clients value convenience just as much as price. They are used to shopping online for everything from clothes to electronics. They don’t have to drive to the store, park and shop. The items show up at their door within a few days at most. “Price can sometimes sway a client to make a purchase, but it’s really convenience that drives that behavior,” said Kristin Dance, VMD, senior key account manager at Portland, Oregon-based Vetsource, which offers online pharmacy and home-delivery services for veterinary hospitals. “Many of us have Amazon Prime accounts, many of us are shopping online very frequently, whether it’s monthly or weekly or multiple times a week,” Dr. Dance said. “Some clients are always going to want to come into the hospital to purchase products because they really like the social aspect of that. However, other clients are looking for more convenient options.”
The Benefits of Home Delivery
Home-delivery services allow clinics to streamline their on-hand inventory and offer more variety. Practice manager Stephanie Goss helped transition two Washington State clinics — Chimacum Valley Veterinary Hospital and Pet Townsend Veterinary Clinic — to home delivery through Vetsource. “When I started here, we were one of those clinics that literally had everything,” Goss said. “We had Revolution and Heartgard and Frontline and Comfortis and Trifexis, and our inventory process was huge. We had five DVMs, and they were all recommending one thing, and yet we had everything on the shelf.” Transitioning to home delivery allowed the clinics to reduce their costs of goods. “We’ve scaled down to just one recommended product in the clinic [for parasiticides] and then for diet we’re only carrying small bags of critical-care products for patients that would need it right away,” Goss said. “For everything else, it’s just so easy to say, ‘Hey, we can sign you up for home delivery, we can put in your order today, and they’ll ship it out tomorrow and it should be on your door step in three to five days.’ Most clients think that’s fantastic.” Home delivery can be an appealing option with therapeutic diets, especially food packaged in heavy bags or multiple cans. “We have a large elderly and geriatric population in our area and the senior citizen clients love the fact that they don’t have to carry it from the car,” Goss said. “We’ll carry it out to their car for them, but then what do they do when they get home? I’ve also worked in clinics that had home delivery in an urban area and clients were really happy to not have to carry it home on their bike or the bus.” Then there are the clients who forget to buy or refill a pet’s medications. Not only does the clinic lose the revenue, but the pet’s health can be put at risk. Many homedelivery services set up automatic refills, which increases compliance without the need for the client to remember to order the drugs. Midwest Veterinary Supply takes the concept one step further with a monthly service called Easy Dose It. “Easy Dose It allows dog and cat owners to get monthly single doses of their pet’s heartworm, flea and tick preventives shipped free right to their door, right on time,” Fox said. “This tool helps improve client compliance by eliminating forgotten doses and provides an easily budgeted alternative to purchasing a full sixor 12-dose card.” Midwest Veterinary Supply offers several online platforms for practices: MyVetStoreOnline for companion animals, MyEquineStoreOnline for horses and MyPharmStoreOnline for food animals. Another way to increase compliance while keeping spending at the clinic is to capture the business when the veterinarian recommends a product or writes a script. Vetsource’s mobile app makes it easy for clinic staff to use a tablet computer to enroll clients in home delivery when they are in the exam room or at checkout. “The biggest opportunity that we see is a proactive approach, being able to bring that topic up to your clients before you know that they’re going online,” Dr. Dance said. “Hospital members can complete part of that setup process, save it and then come back to it when it’s the appropriate time within that customer’s visit as they make their way through the hospital.” Providers of home-delivery services typically offer more benefits than simply filling pharmacy orders. For instance, the Vets First Choice platform also helps clinics manage prescriptions and identify missed opportunities. “We provide a sophisticated platform that automates refill reminders and notifies veterinarians of expired prescriptions,” Panaia said. “The platform includes powerful analytics that help veterinarians identify gaps in care and take action to improve not only health outcomes for the patient, but their relationship and engagement with clients.”
Effect on Revenue
Although additional costs are associated with using a home-delivery website, practices can see a reduction in pharmacy expenses, including the need to pay someone to track, order and unpack the inventory and stock it on the shelves. “According to several practice management consultants, practices can expect to pay anywhere from 28 to 40 percent of the product cost on managing the inventory itself,” Panaia said. “[With home delivery], practices have access to a hugely expanded inventory — basically any product — without having to carry the inventory.” Deciding how much to charge for a drug or diet is made easier with templates, which reveal the average online price of popular products. “The goal is not necessarily to convert customers to your online store if they’re already purchasing with you in-house,” Midwest’s Fox said. “The online store is a tool to capture business you may not currently be getting because the client is purchasing that product elsewhere.” Goss, who has used Vetsource at three clinics, said home delivery had a positive impact each time. “You’re able to cut the cost that’s sitting on your shelves and you’re able to address, to some degree, that lost revenue,” she said. “Even though you’re paying the cost associated with having Vetsource fill the order, it’s still money that you would have never had in the door in the first place because those are clients who are shopping on 1-800-PetMeds or Drs. Foster and Smith. It really is a win-win for the clinic.”