How One Lab Owner Tackles Challenges in the DSO Market
Posted Oct 14, 2022 in Management
Jay Collins, Owner of 75-person Cornerstone Dental Lab in Bristol, PA, has been working in the DSO market for the last 15 years. He now has a dozen DSO contracts servicing about 250 dentists and representing 60% of his lab’s total revenue.
While this market provides an opportunity for high volume, it also comes with an extremely tight profit margin: typically, 6 to 8% for DSO clients compared to 18 to 20% for his private practice clients. Further adding to the challenge: many of Collins’ DSO contracts are one-sided, meaning he has to guarantee pricing and turnaround time while the DSO doesn’t guarantee a certain volume of work, although during negotiations it will often provide a range of expected volume as well as an idea of what it’s currently paying.
Consequently, he takes a very strategic approach to formulating his contracts, service offerings and pricing in order to maximize profits. For instance, during negotiations with a...
