Understanding the math

Question from a client this morning:

“My lab fees are 14% of sales and I’m pretty sure I am his biggest customer – should I be asking for a discount?”

My response:

Your overall net profit before tax is 37% (by the way – this a bloody good result).

So, for every £1000 of dentistry you deliver, the lab makes £140 and your business makes £370.

Call a meeting with your technician.

Tell him you want a 5% discount for volume and loyalty.

  • he is stressed and completely pissed off
  • his lab fee is now £133 per thousand
  • assume he has a 20% net profit margin
  • his net profit is down from £28 to £26.60 per thousand
  • he is taking a 5% reduction in net profit – his life
  • you are now making £377 per thousand
  • your net profit is up 1.89%

Big deal for him – small deal for you.

Wouldn’t you rather have a technician who loves you, does his best work and jumps every time the phone rings from your practice?

Maybe a conversation that agrees a target for production OVER which you enjoy a reduced price – that way, your technician doesn’t see his income dropping – he sees an opportunity for extra business.


Understand the math.


Published by

Chris Barrow

Chris Barrow has been active as a consultant, trainer and coach to the UK dental profession for over 20 years. As a writer, his blog enjoys a strong following and he is a regular contributor to the dental press. Naturally direct, assertive and determined, he has the ability to reach conclusions quickly, as well as the sharp reflexes and lightness of touch to innovate, change tack and push boundaries. In 2014 he appeared as a “castaway” in the first season of the popular reality TV show “The Island with Bear Grylls”. His main professional focus is as Coach Barrow, providing coaching and mentorship to independent dentistry.