Dental Supplies Business - Agent Opportunity

RS1987

I have been offered a partnership with an Eastern European businessman friend of mine to act as an agent in Ireland for a well established Eastern European dental supplies company who already have successful agents in countries such as Italy, Switzerland etc..
The owner of the company is a very good friend of the guy who has offered me the partnership. There is no cash investment needed - just a lot of time.
The company are about 20% cheaper than Irish dental supplies companies. I dont know what the Commission will be like but I would imagine something like 5-10% but the turnover could be enormous even with just a few Dental practices on board as Dental supplies are usually high cost products.

The company is ISO 9001 certified and have very high quality brochures.

Does anyone have any knowledge of this industry?

Should I give it a go? (I have plenty of sales experience)

Any advice or comments are greatly appreciated,

RS1987

Romka

What kind of Dental supplies? Toothpaste? or something for dentists?

RS1987

Romka wrote: »

What kind of Dental supplies? Toothpaste? or something for dentists?

Supplies for Dental Practices both equipment e.g dental units, drills etc and everyday consumables e.g syringes, gloves etc...

tompadraig

Dentists are a great industry to sell to , as they are not allowed to purchase advertising, they are normally a pretty soft sell.

ballsymchugh

tompadraig wrote: »

Dentists are a great industry to sell to , as they are not allowed to purchase advertising, they are normally a pretty soft sell.

i wouldn't agree with that at the moment. PRSI and medical cards were cut to shreds last year and plenty of dentists are letting staff go and cutting hours. so they're going to go for a good deal, not the first person to walk through the door.

there are plenty of practices advertising all around the place. redmond molloy often advertise on boards.
there would be a good market out there for consumables alright, but the materials would really need to be a decent quality. judging by some eastern european patients that come in, the quality of the filling materials don't seem too great at all, so not sure how well you'd do on that line.
the 'tools of the trade' are practically the same the world over so you may do well there.
as for units, you should maybe check out a trade show somewhere in the uk, or check henryschein.co.uk for an idea on the quality and standard that's expected these days. i've worked in one place with a cheap(ish) chair (cost was about 7k) but moving it felt like it was about to break. obese patients made me nervous!

what's the company's name?

op, try the dental issues forum for more relevant feedback

RS1987

Hi guys,

Really appreciate all the feedback.

I should mention that all the products are typically the exact same brand products sold to dentists in Ireland therefore quality would not be an issue.

One of the issues is delivery. I can only offer 48hour delivery (at best! - I will have to talk to my contacts to get more info on the best delivery options but I think 48hr delivery is feasible).

One of the main dental supplies company in Ireland currently offer next day delivery for orders made before 4pm.

Any more advice is greatly appreciated.


Thanks,

RS1987

BarryM3

Hi RS, are the orders coming from abroad or will you be holding a stock level in Ireland?

RS1987

BarryM3 wrote: »

Hi RS, are the orders coming from abroad or will you be holding a stock level in Ireland?

BarryM3 wrote: »

Hi RS, are the orders coming from abroad or will you be holding a stock level in Ireland?

Hi Barry,

Coming from a warehouse in Romania. I reckon I can deliver in 72 hours though as I have good transport contacts in the country. But one company in Ireland offer next day delivery. Others offer 48-72 hours delivery. I will have to find out if this will be an issue for Dental practices.

For VAT reasons I would be unable to stock products in Ireland. I will be acting as an Agent/Intermediary for the Romanian Company so I will not have to charge Irish Vat. One of the reasons the products are cheaper in Romania is the 9% Vat rate versus 21% rate in Ireland. Now normally you would imagine that this would be irrelevant as businesses registered for vat can reclaim it. However Irish dentists are not registered for Vat as they are exempt from charging it.

Just to mention I have been informed that the commission we will make will actually in the region of 15% of sales. However one aspect that worries me is the fact that there will be two of us sharing this commission which means in order for the business to be viable and worthwhile we would eventually need sales of €300000-€400000 per annum. I have done some research and it seems that dental practices spend 7%-10% of turnover on supplies. Obviously sales of €350000-€400000 would be difficult to achieve in any business but I will have to look into this further.

Does anyone know what the population spends annually on dental care?

antoinolachtnai

As I understand it, the correct procedure for these dentists in dealing with this vendor would be to register for VAT if they purchase more than 40k in a year from an EU country other than Ireland.

http://www.revenue.ie/en/tax/vat/leaflets/VAT-eu-intra-community-acquisitions.html#intra-comm-acquisitions

I would be concerned about the tax situation if you are depending on it for your advantage - really, you should be charing Irish 21 percent VAT, since by engaging you two, the Romanian company has effectively established a branch here.

RS1987

Hi Antoin,

Thank you for your reply.

I wouldnt imagine that there are too many dentists who would spend more than €40,000 per annum on consumables - but I could be completely wrong. I have recieved advice that would suggest that I do not have to charge Irish VAT as I will be acting as an agent. We hope to have an online ordering system which obviously will be based in Romania. We will have to look into this in detail to see how we can avoid the Irish vat issue.

antoinolachtnai

If the revenue are happy enough that you don't have to pay Irish VAT, you will be fine, but if not, they will come a-knockin' sooner or later. If your supplier builds up any scale at this, they will have to start charging Irish VAT, even if they are in Romania.

I am not knocking the overall business idea, but don't be depending on the vat differential to give you a sustainable advantage. I would also look very carefully at stuff that the Irish distributors do or don't do in terms of information lines, etc.

georgieporgy

I'm a dentist. You say you will offer the goods for sale at approx 20% cheaper than other Irish distributers. Why not offer them for sale at the Romanian price plus an appropriate markup to cover your commission.

I bet these items are MUCH cheaper in Romania.

Your crowd are not the only ones doing this. I've received promotional material from Polish outfits,offering similar token discounts.I always toss them in the bin because I don't trust the quality. I think you will find that most Irish dentists wont pay attention to east european sources unless the discount approaches 50%. I can import guaranteed quality products from USA at significant discount to Irish prices so why would I risk my reputation with an unknown (possibly dodgy?) romanian outfit. No offence meant, just giving feedback as to how the average Irish dentist will think.

The average dentist spends 5-20,000 per annum on consumables.

RS1987

georgieporgy wrote: »

I'm a dentist. You say you will offer the goods for sale at approx 20% cheaper than other Irish distributers. Why not offer them for sale at the Romanian price plus an appropriate markup to cover your commission.

I bet these items are MUCH cheaper in Romania.

Your crowd are not the only ones doing this. I've received promotional material from Polish outfits,offering similar token discounts.I always toss them in the bin because I don't trust the quality. I think you will find that most Irish dentists wont pay attention to east european sources unless the discount approaches 50%. I can import guaranteed quality products from USA at significant discount to Irish prices so why would I risk my reputation with an unknown (possibly dodgy?) romanian outfit. No offence meant, just giving feedback as to how the average Irish dentist will think.

The average dentist spends 5-20,000 per annum on consumables.

Hi Georgie,

Great to hear from a dentist!

The products are not manufactured in Romania they are your typical internationally branded dental products i.e Voco, Kerr, 3m etc... The reason they are cheaper is because my guy in Romania buys them in massive bulk and therefore they are much cheaper than a small Irish company and also because of tax reasons they are cheaper.

If I could offer you these branded products 20% cheaper than you pay and with a 72hour delivery time what would you say to that?

Your feedback in particular would be greatly appreciated.

RS1987

btkm8unsl0w5r4

I am a dentist. My issue would be that I need basically three types of supplies

1. Urgent Supplies - Need them ASAP 3 day is too long. Often low cost iteams such as gloves etc. Improtant for my practice but low value to you.

2. Expensive non urgent supplies - Usually shop around the suppliers in Ireland, USA, UK and Internet retailers for these branded supplies because as you point out they are the same everywhere (shelf life?). You need to not only be cheaper than the irish guy but all these resellers worldwide.

3. Capital Equipment - chairs, drills etc. These are all about aftersales and reliability. I need a company that can have a technician out in 1 hours if I need it to rapairs. Also leasing of large equipment for tax reasons means that it is often the Banks buying the equipment, can you company do this will the bank be happy with this.?

My issues with a new small supply retailer are:

1. Small items no problem if they are cheaper I will buy them.

2. Large items no way - this is essential equipment and untill you have a track record I might as well buy chineese stuff on eBay at a fraction of the Polish price (talking 25k dental chair for 2k delivered - clone stuff not my cup of tea, but dentists that run a very low cost practice do purchase these) if I am entering into this type of unknown.

3. Will items have the appropriate safety marks, customs duty paid, VAT etc. And instructions in English.

4. Will you be around tomorrow.

5. Credit facilities? Most companies give 30-90 days can your cash flow sustain this

6. Leasing facilities?

7. Availability on the phone. And returns (I return many items per order as they are misshipped of misordered)

8. Quality of products, even branded products that sit on some polish shelf go off, bulk buying can cause short shelf life on products.

9. Do you know your products....it take a lot of time, effort to know all the products.

10. I can do this on ebay already for non urgent stuff, there are lots of eastern europian shops selling dental supplies.

11. The suppliers listed prices are not what an Irish dentist is paying, depending on the ammount they order 10 - 15% discounts apply, as such you would only be 5% cheaper and a lot more hastle. ( for instance the worlds largest dental supply companty gives you a scanner that you scan the catalogue and its ordered online instantly). Some larger dental poractice gett better discounts than that.

12. The price differential once you factor in the cost of business in Ireland is not that great. We see this with eastern europian dentists that set up in Ireland. They find that they have to bring their prices way up from their home counrty to make a living. I am sure they all import this stuff as well.

Its not an easy market and is a specialist market, there are supply companies going to the wall in Ireland and I dont see what you offer over me buying direct. Irish dentists are under pressure to drop prices and are already shopping around just like everyone else. You would need to be a fraction of the price to be worthwhile. I would go further than georgie and say 70 -80 % less, you cannot compete on quality, service or credit facilities so you only have price. What do you offer rather than me going to Romania once a year for the big stuff or ordering online. The economics of this are not as simple as it would appear, sorry for the down beat reply, sound to me like they want you to do the work of testing the market over here.

btkm8unsl0w5r4