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How Strategy Milling Affects Profitability
Strategy Milling provides the opportunity to offer a lower-cost restoration to your clients while increasing profitability.
To understand this concept, let's examine the traditional analog scenario of how gold restorations are created and the costs related to that process.
- Lab receives case from Dr.
- Model work is created - materials & labor
- Die is cut & trimmed - labor
- Sealer and spacer are applied - materials & labor
- Crown is hand waxed, sprued, set in ring former, invested, allowed to set, removed from ring former, heated, metal is melted, casting is made, the ring is set to cool, divesting takes place, de-spruing happens, the gold is weighed, the restoration is examined for bubbles of overextensions and fit to die, machining or "finishing" begins and ends with the polishing of the restoration - labor, materials & down time.
All of the above steps are pretty common to technicians.
Using Strategy Gold Milling?
- Steps 1, 2, 3 are the same.
- Step 4: Scan, design, and email files.
- Step 5: Receive restorations, 10 minutes of labor per unit to polish, and it's finished.
- Step 6: Sell it.
Also standard is purchasing the gold alloy, which impacts cash flow. Upon buying the alloy, it is marked up by a percentage. How much? 25%? 50%? 100%? I have seen and heard of all these percentages.
Why do we do that? We were taught this by watching our peers or listening to our mentors. Selling higher than the purchase price covers the expense of floating that much inventory from the day you purchased it to the day you sold the last bit of it. Laboratories must cover the economic cost affecting the outlay of cash. Agreed? Agreed. Lab owners became gold brokers.
Now, let's consider this question. Are you a zirconia, lithium dislocate, titanium, chrome cobalt, or wax broker? No. You do not weigh any of these materials when you use them... you figure out the cost of the puck or block divided by the average unit capacity of the material and charge your profit margin based on averages. This allows you to sell these restorations at a flat fee to your accounts, and in the end, you win. Your accounts buy these items knowing the final cost of the restoration.
You can now do this with gold. This strategy eliminates the need to be a gold broker and allows you to work off averages to sell flat-fee gold restorations to your clients and win against the averages.
How do I determine what I charge my customers? We suggest you look at your previous 6 months' gold restoration sales and see the average selling price. What was the average profit margin? Take the average and lower it by $20.00 or $25.00. What price are you looking at? Does that align with the cost/effort to perform these steps? What about your profitability? If you sell a high noble restoration on average for 325.00 a unit and are at about a 40% profit margin.
If you could:
- Lower your sale price to $300.00 per unit
- Produce it with less labor and no outlay of cash for gold
You could realize a profit margin of about 80% while lowering the client's overall cost and sell far more gold crowns.
In a conversation with a Dentist, he told me of his experience at a meeting where the question was posed: "How many of you still use gold?" He raised his hand—he was the only one. He was then asked: "How do you still sell gold?" He told them: "I'm the Dentist. My patients trust me."
From our survey, we know that the two reasons doctors don't sell more gold are cost and patient acceptance.
(This Dr. still casts his gold crowns. He controls the cost and likely doesn't have to mark up the product too much. However, he sells more because the patients trust him, and he knows it's the best material all the way around.)
It turns out that the answers to questions around cost, presented in the market research to dentists, was looked into. The Dr.’s knew gold crowns would cost more, they just didn’t know what the cost would be until the restoration was completed. That causes them a problem. How do you charge the patient the correct fee if you don’t know your final costs from the laboratory?
The dentist leads patient perceptions—see the example above. The dentist is reluctant to sell gold not because it isn't better than other choices but because the other choices have known costs associated with them.
Now, with Strategy Gold Milling, you can provide your doctors with this peace of mind. You can offer the flat fee to the doctor and sell more of something that easily integrates with other digitized products in your current lab workflow, increasing cash flow, minimizing materials and labor costs, and increasing profitability.