The Optometry Network has arrived to the market promising to supply some of the most competitively-priced goods and services in Australia. Its founder CONAN LOMAS discusses why it will put independent optometrists first and empower them in the face of corporate competition.
Under increasing pressure from corporate optometry, optometrist and businessman, Mr Conan Lomas, believes his new enterprise can help struggling independents recapture control of their businesses.
Called ‘The Optometry Network’, it is launching on 1 August vowing to generate significant savings for independent optometrists on the cost of optical lenses and shopfitting through a newly established supply chain.
The initiative, which is free to join, comes in response to the rise of corporate optometry providers that, during the past decade, have imposed themselves on a market once enjoyed by many independents.
Through his own optical business dealings and 21 years of industry experience, Lomas has encountered many Australian independents who are keen to sell up. They are in a financial predicament, worn down by expensive overheads and trying to compete with the corporates that sell low cost products imported through cleverly developed supply channels.
“When I talk to them about their financials they are at a bit of a loss as to how to improve their business without capital investment and they simply don’t have the money to pay for shopfitting and marketing,” he explains.
“They don’t really want to sell, but they realise they could actually make more money working for a big corporate group. Many are taking on the responsibility of running their own business and then paying themselves less than what they could earn elsewhere; they take all the risk but aren’t being rewarded.”
To empower independents, The Optometry Network will become Australia’s newest lens supplier, promising to offer lenses at approximately half the cost that main suppliers currently charge. It will also focus on saving tens of thousands of dollars for independents through a fit-out supply service for practices.
Lomas says the key to the venture is his knowledge of optical supply chains and knowing what optometrists and patients want. The company will source lenses from factories throughout the world that, it claims, incorporate the same optical technology as the major lens brands.
“I’ve done my homework and we will be the cheapest retailer of lenses in Australia; there is nobody who can beat us on the current price list – we are basically cutting out the middle-man,” Lomas says.
“The Optometry Network is really about changing the supply chain to make it easier for independents – and this was before COVID-19 arrived, so now we are better placed than ever.”
The Optometry Network model is said to reflect the corporate practice whereby lenses are sourced on price and quality, and not necessarily brand.
The company will hold a niche bouquet of stock lenses concentrating on products that bring added value to the patient and practice that would traditionally either not be readily available or more expensive to source.
“Essentially the same quality lenses you get from the top brands can be produced elsewhere but at a fraction of the cost. Optometrists and dispensers can place too much emphasis on the brand names of lenses when consumers are often uninterested,” Lomas explains.
For Lomas, the motivation behind the company has roots to his childhood in a poor family where every dollar was stretched to its full potential value.
He is often amazed at motorists who pay $1.50 a litre at the bowser when a fuel station a few hundred metres down the street is selling the same product for $1.
“The saving on a full tank of petrol that takes 60 litres is $30. That’s 30 Slurpees for my kids. And yet our own optical profession does that every day. Why?”
While it depends on the type of lens ordered, he says optometrists who traditionally pay $70 for one lens will pay approximately $40 with The Optometry Network.
It equates to a 40-50% saving, reducing the cost of a pair of spectacles by around $60. Meanwhile, because of the business’s streamlined structure, he says there is no need for him to add high margins like other lens suppliers who need to recoup R&D, staff, marketing and infrastructure costs.
“So the potential for an increase in profitability for independents is considerable. Optometrists will of course have the choice to offer patients a quality lens for the same price, or charge less for the same product.”
The lenses will also be available up to a minus 4 cylinder off the shelf.
“As an optometrist myself, I know there is nothing more frustrating when you’ve got one lens in stock but the other has to be surfaced because it’s overpowered. You shouldn’t have to grind a single vision lens up to that power. This automatically cuts costs by a huge amount along with time.”
For optometrists who join the network, lenses can be ordered via satellite tracing or the professional can send the frames into its laboratory.
Those using satellite tracing will be sent the ready cut lens for the professional to insert into the frame themselves, while those who send in the frames will receive a complete pair of spectacles.
By supplying lenses at a fraction of the price, Lomas is aware that some professionals may be wary.
He says he has tested the lenses extensively on staff members within his existing optometry stores who have traditionally been the most difficult to satisfy with progressives. All were happy with the product.
“The best thing for people to do is to try them as they will not be disappointed.”
Initially, he’s also aware some may be apprehensive about changing lens supplier.
“Optometrists may not jump on board 100% immediately. If you have a relationship for 10 years with a supplier you are often going to have loyalties, even if it’s to the detriment of your own business. We are starting off with baby steps.”
In future, he hopes the venture will have an impact on several fronts. Primarily, the cost savings could give independents greater control over the direction of their business. In the longer term, it could impact the pricing structure of the Australian lens market.
Further, he says Australia is an anomaly in terms of having some of the highest optometry salaries in the world, alongside some of highest set up, equipment and regulation costs.
Meanwhile, the sale price of spectacles are among the lowest, largely caused by the increasing corporate presence and aggressive pricing structures.
He uses the example of a practice he assessed that was fully booked Monday to Saturday, yet it was operating at a book loss of $26,000, while the owner optometrist was paying himself only $80,000 per annum. By using different products of the same quality, he calculated the business could save $120,000 per annum.
“That’s an incredible amount of money to save. You are then in the territory of changing your own lifestyle as the owner who can now pay themselves the rewards deserved for the risk of owning a store. Or you can put the money back into the business to increase marketing presence and improve customer service levels to ensure long term sustainability of the practice.
“Any optometrist that’s running their own business should be making more than they would working for someone else on a salary, that’s why we take the risk. The real emphasis is to make sure the optometrist and retailer, along with the customer, are the ones who win.”
While the lens-related cost savings could offer more flexibility, The Optometry Network’s is also keen to extend its services into shopfitting.
Lomas, the company founder, has set up and revamped several practices in the UK, South Africa and Australia. He believes cost- efficient refitting is a key area that can help independents better compete against the corporates.
“If you look at optometry, one of the biggest investments is the shop fit,” he says. “But if you are having to invest more in the shopfit than you are to equip your optometry rooms, it becomes very difficult to justify the cashflow to afford it. That’s why you see a lot of stores looking a bit tired.”
Through his offshore industry contacts, Lomas says, with some forward planning, he can help independents potentially save tens of thousands of dollars on their shopfitting costs.
Lomas has already done so with an optometry practice in Brisbane where he saved more than $100,000. They still used local contractors for electrical, plumbing and dry wall work, but overseas suppliers provided the finer points such as furniture and joinery.
“If you look at the corporates, they have got it right, their supply chain is so well organised that they make real profits which, in turn, gets reinvested so they can grow rapidly. The Optometry Network is there to bring that same supply chain to the independent without the headache of finding it themselves and the cost of scale required to create it.”