FRAMEBUYER | Buyers Forum

A Different Sort of Board

How the consignment model can impact your inventory, and your business

One of the biggest investments in any optical is inventory. Selecting and buying the right frames and sunwear is a challenge for every dispenser, and most opt for the traditional format: buying inventory that is then owned by the dispensary.

But the consignment model is a different way to add to your boards. According to the Small Business Association, inventory is owned by the manufacturer and the dispensary sells them. “When an item sells, you earn a commission on the sale and the consignor keeps the rest of the payment,” the SBA notes. “If you do not sell the item by the agreed sales deadline, you must return it to the consignor or negotiate a new contract with the consignor.”

EB spoke with Altair president Steve Wright about the company’s consignment model and how it can impact the frame-buying business.

Altair president Steve Wright; bebe styles BB5071 and BB5074 from Altair

WHAT DOES IT MEAN TO HAVE A CONSIGNMENT-BASED INVENTORY?

SW: We profile consumers in a dispensary’s region to identify the best products for each account; then, we provide board samples of the most proven, productive styles at no cost. The agreement to maintain a productive inventory allows the practice the ability to add and remove styles as it makes sense for their business.

HOW MUCH INVENTORY SHOULD BE CONSIGNMENT?

SW: There is no magic number. Account executives are trained to assist the customer in what makes the most sense for their practice considering variables like size of the dispensary and patient demographic. On average, our products will appeal to 80% of eyewear consumers, so with that number in mind, larger practices [can] maximize the benefit of our no-cost frame board management program.

IN THE FIELD

Genevieve Roman, account executive for Altair, also spoke about the consignment model.

WHAT IS FRAME BUYING IN THE CONSIGNMENT MODEL? WHAT’S IT LIKE IN PRACTICE?

GR: [Frame buyers] know their practice, they know their patients, they know what will sell and not sell. We invest in the practice so the doctor is not responsible for the product up front, but the buyer still selects product. One difference is that frame board management goes from three- to four-month buying like traditional [cycles] to a monthly habit.

Oakland Optometry in Rochester Hills, MI, is a single-doctor practice and the optician, Stephanie, was also new to the practice. She was a little hesitant, but she tried [consignent] because it was no-risk to the practice. In two years, there’s been a 56% growth rate.

Oakland’s inventory isn’t strictly consignment, they also round out their offerings with other product. A handful of offices have 100% Altair, but for the most part, we might be the majority in some offices, but they have other brands.

Want to talk about what gives your frame buying flair? Please email executive editor Amy Spiezio, Amy.Spiezio@PentaVisionMedia.com