Executive Vice President, MidAtlantic Ortho
Here’s an interesting follow-up article by Dr. Giacobbi about Amazon’s upcoming role in the dental marketplace. With the rise of DSO’s and the potential for real savings, the smart money suggests that bottom-line savings will edge out the long-running relationship between Dentist/Supplier. With unmatched distribution infrastructure and digital tentacles touching on more and more aspects of daily life, Amazon seems like a logical entity to initiate this kind of change. It’s not a matter of if, but when, right?
Not so fast.
The future has always had a fiercely independent streak that seldom cooperates with conventional logic. So here are a few things to consider for those who are ready to cede the dentist/supplier relationship to the ruthless efficiency of an Amazon.
Think about size.
Amazon’s biggest strength, their size, is also their biggest weakness. The bigger any product/service/company becomes, the less able it is to respond nimbly to a change in the marketplace. It’s not business strategy that falls short. It’s physics, it’s mass and inertia. Consider Borders Books. It more or less owned the online marketplace for books. It was an unchallenged business model until a scrappy upstart outflanked and outmaneuvered them at their own game. That scrappy upstart? Amazon.
Think about innovation.
A company that focuses on perpetually growing will always have limited resources to devote to innovation and exploration. No matter how methodical the growth, there will always be individuals and companies who will devote more resources, more attention and new thinking to a specific area. It might be the heart of the business model, or it might be on the fringes. But it will happen. AOL owned access to the internet. They made it easy, accessible and blanketed the world with FREE AOL CDs. When they merged with Time Warner in 1999, analysts thought the world would be collapsing at their feet. Only…it didn’t. Other upstarts found a way to do what AOL did better, faster and cheaper. Today, just a few of them are (EarthLink, Comcast) are still around.
Think about the black swan event.
By its very nature, we don’t know what a black swan event will look like. We only know that we don’t know. When Blackberry was the dominant mobile telephone, there were talks of breaking the company up to encourage competition. But then Steve Jobs and the iPhone happened and it was game over for Blackberry. And for a while, the iPhone was the unchallenged leader, so dominant that nobody would challenge it. Until a search engine company designed the Android operating system.
The thing is, history is littered with unstoppable forces (Windows OS anyone) that get stopped dead in their tracks. Not just a few times, but all the time.
So back to the original question; will Amazon take over the dental market? I’ll just say that it’s going to be interesting to see how it all plays out. Personally, I think they’ll have a role. I could imagine Amazon and Patterson striking some sort of deal where Amazon distributes select divisions of Patterson products that may not need as much sales support.
How this will apply to Orthodontics is likely to be different. Orthodontists are, by nature, a more “gadgety” crowd. They simply use more gadgets on a daily basis than other dental specialists. Sure a company could throw a ton of orthodontic products up on Amazon, but it would have to include every bracket Rx, every wire arch form, every unique offering…and still you’ve only scratched the surface. It would be incredibly hard to make it a one-stop shop and incredibly difficult to configure.
At MidAtlantic Ortho, we understand the immense challenges involved with taking a brick and mortar ortho supplier online. As you can guess, we’re all for preserving the relationship between the orthodontist and the supplier in the future. But there are forces far larger than us pulling the strings. No matter what your opinion, the one thing we can agree on is that the future is unwritten.