00:00:04:06 – 00:01:35:01
Welcome to Shorr Solutions: the podcast. I’m your host, Jay Shorr. I’m the CEO and founder of Shorr Solutions, a national and award-winning consulting firm, assisting aesthetic and surgical practices with their operational, administrative and financial success. I have an amazing team of practice management experts and clients across the U.S. and as an industry expert with firsthand experience owning a multimillion dollar cosmetic dermatology and plastic surgery practice.
Listen in as I’ll lend you my expertise and best tips to successfully manage and grow your aesthetic practice. I will also be bringing in guests along the way, so get ready to be equipped to operate your aesthetic practice strategically and profitably. Welcome to Shorr Solutions: The Podcast.
Greetings, everyone, and welcome to episode number 83 of Shorr Solutions: The Podcast. My name is Jay Shorr and I’m going to be your host today.
And the subject matter for today’s podcast is skin care in your aesthetic Practice. Why? And how should you do it? One of the main questions that we always have from everybody asking us when they are getting into the aesthetic, cosmetic practice business or they have an already existing practice, is why should we even be in the retail skin care business?
00:01:35:02 – 00:02:13:18
That is such a very easy question to answer, and that’s because it is passive revenue. It is revenue that you can achieve without even having to do any productive work other than order the product, sell the product, have people pay cash for it, and without you having to do procedures, it can be a continual revenue stream.
The bottom line to why you should be in the business merely is for revenue and profitability.
00:02:13:19 – 00:03:36:09
So what margins can I expect from selling retail skincare? Very simply put, there is a formula and an equation and the margins that you can achieve are probably 50% at its best. Now, how did I come up with that number? Well, you buy a product for X and you sell it for a Y.
In our case, you buy it for a dollar, sell it for $2. You have a 100% markup with a 50% net margin. Now, people think, well, if I sell it for 50
and I mark it up 50, isn’t that 100%? The answer is no, because the profit is only 50, $0.50 on that dollar. That’s a 100% markup. If you buy it for a dollar, you sell it for $2.
That’s 100% markup. But you’ve made a dollar on the $2 retail sell, and that is a 50% net margin. That’s really not bad. If you sell it for more than a double markup, then naturally your margin, your net margin, the profit, what you can put in the bank, that’s going to be even higher. My next question should I carry inventory or should I go through a third party?
Should I Carry Inventory or Should I Go Through a Third Party Who's Going to Handle All of the Warehousing and the Shipping
00:03:36:15 – 00:05:04:03
Who’s going to handle all of the warehousing and the shipping? Well, in our world, if you have a large enough facility, a store, a medical practice or an office, and you have a display counter somewhere where you can actually show people the wonderful products that you’re selling them, I by all means would do that. However, there is an expense on your end.
You’ve got to purchase minimums that might be a dozen, two dozen of a particular SKU and therefore is going to take up space and it’s going to help increase the amount of expenditure of capital, dollars, resources, financial resources that you’re going to have to spend. But if you do it on an online store and you don’t actually ever physically touch the product because you may end up having a third party do it and they ship it out and they do all of the auto shipping, then you’re not going to make as much profit because that third party has to be involved.
But yet you never, ever have to carry the product. You don’t have to receive it, you don’t have to warehouse it, you don’t have to store it, and you don’t have to spend the money that’s associated with that. Well, how do I know what products to carry when there’s so many to choose from?
00:05:04:04 – 00:08:09:24
Oh, yes, there are so many to choose from. So now let’s talk about the type of a practice that you are. Are you a facial and a body? Are you a facial plastic surgeon? Are you a body plastic surgeon? Are you a med spa? Are you a day spa? Contingent upon the demographics of your client base? Male, female, age… and geographic, meaning where you are practicing, may very well promote the type of products that you need to carry.
If you’re a predominantly female practice, then a blender and a foundation and a toner and an SPF. Is it oily skin? Is a greasy skin? Is it dry skin? Are you allergic? Do I need non-comedogenic products meaning for allergy? These are all different types of products and what sells the most for you? Do you want a private label skin care product?
We’ll get to that in a minute. Or do you want to name brand product because your competitor is going to sell? And who are your competitors? Your competitors are really not just other medspas and medical practices, dermatology, plastic surgery practice. You know, some of your biggest competitors are? CVS, Walgreens, Neiman’s, Bloomingdales, Saks. The beautiful women in the white coats and the bright lights in the glass counters.
You know, they are doing it… Sephora. All right. They do an incredible amount of retail products. So they are your competitor. Do you want medical grade skincare or do you want just regular commercial grade skincare that you can buy anywhere? So when you’re thinking about what product I want to carry, who is it that you want to service? that will determine what type of product and so what SKU you want?
Well, how do I even compete with all of the dermatologists, plastic surgeons and medicines in my community? Very simply put, it is not any different than how you compete with the dermaplaning and the neuromodulators, and the the dermal fillers, and all of the other lasers. You are in a very competitive market. So you have to compete against them in the same identical way that you would compete against them, not just for products but for procedures.
And you really have to be the resident expert. If you have aestheticians in your practice, by far they’re the best because they’re the treatment provider of all these aesthetic services. And your doctors, your PAs your NPs, those who treat the patient and are working on the patient’s face and body are the ones who are going to determine what is it that you really need. So don’t worry about competition. You really in this business competing against yourself
00:08:09:25 – 00:09:51:12
Yes. We’re going to take a quick break and a slight intermission, because what kind of business would we be if we didn’t tell you about our own services? I’d like to take a moment to tell you about our conversion cascade online course. We want you to be trained to convert more patients and boost revenue in your aesthetic practice.
So with our conversion cascade online course, you and your team will be able to master two key important things to growing your practice and becoming successful, converting and retaining new patients. So as a step by step sales funnel, the course is designed to help you and your team attract more patients, convert calls to consults, convert consults to treatments and procedures, and keep patients coming back for more.
Not only will our conversion cascade Online course help strengthen and develop your team’s phone and sales skills in order to acquire, convert and retain loyal patients, but will also serve as a valuable onboarding training tool for every new team member. Plus, in this course, you’ll receive downloadable marketing checklists, phone scripts, conversion tracking tools and more. Sign up for the course to get started on increasing your revenue and converting more patients.
Today, it only takes less than 4 hours to complete the course. You can finish it at your own pace and you’ll have lifetime access. And it’s a special thank you. For our podcast listeners, we’re giving you a 20% off discount. Just enter the Code PODCAST to start saving. Click the link in our show notes to sign up for the conversion Cascade Online course and convert more patients now.
00:09:52:17 – 00:11:48:23
So should I sell well-known name brand merchandise or should I have a private label? Age old question. Look, should I sell in a supermarket? The store brand cookies and store brand new paper Good items? Or should I sell the name brand of the store? The private label? There is a market for everywhere and for everyone. What’s the main difference?
The name brand items are going to have a higher retail cost, so they have a higher wholesale cost. And when you mark that up, it’s going to have a higher retail cost. But those same types of products can be sold in every medspa and every store. So everyone’s buying the same thing. But if you have a private label, who does it promote? It promotes you.
Isn’t that the most important? You want to provide services that promote you? You want to sell products that promote you, sell travel sizes that have your name on it, sell the regular standard sizes that have your name on it, your logo, your website, your phone number that sits on the patient’s counter, their bathroom counter. So when they go to sleep at night, they’re going to put on all these products.
When they wake up in the morning, they’re going to put on all these products. When they travel, they’re going to put on all these products. You can sell travel sizes very, very profitable. But I think you should have a mixture of the SKUs. Name brands, because people love Coca-Cola, Pepsi-Cola, 7UP. All right. They want name brand. However, when you go somewhere and you see different types of products that are generic and they’re kind of like for like and I would say promote the generic products, so that you can get your name out there.
00:11:50:07 – 00:13:39:13
Well, how do I even market retail products when I’m in the patient service business? Yeah, you are in the patient service business, big time, because everybody that comes into your office, 95% of the time is coming in for a service, a procedure. Yes, they may come back after the upsell of products when they’re running out of product. But, for the most part, you’re in the service business, the procedure business.
So how do you market retail product? Oh, that is very simple. If you’re in the surgical business, then you’re going to have add ons for garments, scar gel, you’re doing facelifts. So you want to minimize the scarring. You’re doing breast augmentations, whether it’s rear or for mammary. All right. You want to put it on that scar? If it’s on the tummy tuck, you want to put it on that horizontal scar?
All right. I had knee surgery. When I had the knee replacement. I put it on this scar. It it helps. It’s the siliconized scar gel. Now, you’re in the patient service business, but yet when a patient comes in and they’re going to have a procedure on their face, their skin is going to be erratic. But you have the magic lotion and potion to hydrate that skin, to cleanse the skin.
If you’re in that business, why not sell the product that can help the texture of the skin that makes it with that beautiful glow and it takes away, you know, the services that you’re providing for the pores and the products and the services that you’re going to sell to help with that.
00:13:41:04 – 00:14:47:23
Should I be in the autoship business? There’s mixed comments about that. So let me explain. What is the autoship business? and autoship business is when somebody buys something and every month, they’re going to get that product again. Now you need to know, do you go through it in 30 days? 60 days? It’s like prescriptions that have refills. It’s going to be autoship. So you can either send it out or if you’re on a third party service, it goes to them every 30 or 60 days, however long you feel that the patient goes through.
And what does that do? It guarantees you passive revenue. All right. So you automatically ship that product to the patient, and if they no longer want it, they’ll let you know. I always believe in the autoship business. Now, what does it do to hinder your business? Well, if you’re in the autoship business, it doesn’t allow your patient to come back into your office knowing all of the other wonderful, beautiful services that you do and having the availability to speak to somebody in your practice.
00:14:48:19 – 00:15:50:23
So who should be responsible for the sales process? Everybody, Everybody. Rarely from the very beginning, when a patient walks in, if you are marketing that product, have signs, have posters, if it’s a new product that you’re marketing, let people know. Put it up on the beautiful TVs that you have in the reception area, have on the monitors that you may have in the patient’s rooms, show them that you’re in the skin care business, that you’re in the retail business.
There’s nothing worse than having them go somewhere else for the product. When you sell it right there and they are your captured audience, it should be the aesthetician. When she’s speaking to the patient and performing that procedure, the PA, the NP, even the doctor and your medical assistant. Don’t let people out of your door without having some type of a retail sale because it’s a 100% sale, it’s a 100% markup and a 50% margin.
00:15:51:06 – 00:18:06:16
And lastly, how should I incentivize my staff for selling skin care products many, many different ways. Let me give you three. First, you can have an aggregate pool, which means that whatever the profit margin is in the overall monthly quarterly sales goes and actually is split between all of your staff members because it’s a collective thing for everybody.
Front desk director of Impressions as dietitian, medical assistant provider, all of the people that are in your practice that are helping to sell should have some kind of a skin in the game. Now, second person, an aesthetician who is performing the service that day, if a patient purchased it in combination with that treatment that the intention did, then they should be able to be commissionable at a certain percent.
And then lastly, maybe you have individual people who are incentivized from it that might be running your online store. The online store is a wonderful thing. You can get it by a third party or have your website people do it and you have your own store because if you are, it’s going to mirror and look like your website.
People aren’t really going to know. And there are many different platforms that you can get from third parties that allow that shipping process and you can go to different payment processing, whether it’s cherry, whether it’s Stripe, whether it’s Zelle, Venmo, PayPal, all those different types of payment processing terms or you can have it through your credit card merchant processing system.
I’m not going to name just one, but everybody should have some type of skin in the game because people love the idea of making money.
Ladies and gentlemen, quick tidbits on how and why we should sell skin care in our business. Until next time, we wish you the best. Good luck and God bless.
00:18:06:16 – 00:19:41:21
So that wraps up today’s episode of Shorr Solutions: The podcast. If we mentioned any website links, you can find them in our show notes to work directly with me and our award-winning team of consultants to increase efficiency, increase revenue and decrease costs in your esthetic practice. Schedule a free consult with us today. We will help you establish and refine your aesthetic practices, protocols for maximum efficiency and productivity, decrease your expenses and increase your profitability with an expert financial analysis of your business.
Attract more patients, convert calls to consults, convert consults to treatments, and keep patients coming back for more. With our sales training, coaching and complimentary access to our conversion cascade online course recruit, hire and train new team members and manage any staff turnover with our human resource expertise plus more, head over to our show notes and click on the link to schedule a free 30 minute console with us today.]
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