Supply Chain Has Stabilized. Margins Are Going to Pressure Again.

Supply Chain Has Stabilized. Margins Are Going to Pressure Again.

Dental supply shortages that plagued 2021-2023 are over. Patterson, Henry Schein, and Benco all report normalized inventory levels. No more three-week waits for composite or burs. Orders arrive in 3-5 days.

That sounds like good news. It's not. Normalized supply means competitive pricing. When supply is tight, vendors have margin power. When supply is abundant, dentists have margin power. Guess which we have now.

Expect your supply costs to hold flat or decline slightly through 2025. That's good. The catch: Your volume discount expectations will increase. Vendors will push tiered pricing. Patterson will offer you a deal if you consolidate spend. Henry Schein will call with better terms if you move more volume to them.

The competitive pressure on supplies eases. The competitive pressure on services gets fiercer because everyone has access to the same equipment and materials at similar costs.

This is actually good for well-run independents. You can't compete on supply cost against DSOs. You compete on execution and patient experience. When everyone can get burs and composite in five days, your only differentiator is your team and your cases.

Leverage it.