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CEREC / Sirona - Future Open Distribution

Quote

Anonymous

Guest
Baird Analyst Day - Patterson 10/2/14

Baird

We still believe likelihood of SIRO moving to a non-exclusive
arrangement on CEREC post the FY'17 expiration of PDCO's 10-year
exclusive is ~50/50 and PDCO management acknowledged yesterday that a
non-exclusive arrangement on this product might help drive faster CAD/CAM
(and CEREC-specific) penetration overall. Either way, though, PDCO doesn't
expect to pay additional fees even if it can work out an exclusive extension
beyond FY'17.

With regards to management’s expectations for its SIRO relationship following the 2017
expiration of the 10-year CEREC exclusive distribution agreement:

We thought management’s message was a bit mixed, although that’s likely explained by uncertainty
that still exists with regards to a potential extension of this agreement. Specifically, CEO Scott
Anderson first noted that he believes opening up CEREC distribution in North America to others
beyond 2017 might help drive accelerating uptake of in-office CAD/CAM in general, which he stated
“would be good for everyone involved, including PDCO.” Anderson also noted that a change to
non-exclusive CEREC distribution in North American would also potentially allow PDCO to sell
other competitive systems if others were to close the competitive gap with CEREC over coming
years.

Our sense initially was that these comments were almost a tacit acknowledgment of the rumors
we’ve increasingly heard that SIRO isn’t 100% satisfied with PDCO currently and may be looking to
open distribution of CEREC and other products to other distributors beyond 2017.

However, Anderson also reminded investors during his presentation that PDCO has certain
performance targets written in to its exclusive distribution agreement with SIRO that, if hit, would
allow PDCO to extend its exclusivity on SIRO products beyond 2017 at its own (PDCO’s own)
choosing.

We frankly hadn’t realized this latter point and believe it throws a wrinkle into the discussion about
whether SIRO will ultimately open up to other North American distributors beyond 2017. Our gut
(and checks with SIRO and other industry sources) suggest that an opening up of CEREC and
other product distribution to HSIC and others is the most likely scenario beyond 2017
 








What does the link have to do with CAd/cam dentistry? Still can't design and mill a restoration in one visit. Shade taking who really caress doesn't save the dentist time or money. Intraoral camera every dentist every dentist has one already. Digital impressions - can't do Invisalign, doesn't save any time and doesn't save any money. Pretty funny if you think this product even matters. Ceres doesn't make its money on digital impression systems - no residual revenue stream. Knock yourself out selling a $26,000 product with 23% margin in it and then live with the customer who can't figure out how to use it for the next two years u tip he returns it.

Good luck.
 




"Knock yourself out selling a $26,000 product with 23% margin in it and then live with the customer who can't figure out how to use it for the next two years u tip he returns it. "

Good Summation.

You're Waaay too smart for dental. Seriously.

The dental dealer numbskulls will not be able to understand that plain logic. They love to give their time away for free and kill themselves to give free lifetime service on something that didn't make them much cash and is a supreme long-term nuisance.

In other words, most of them are stupid.
 




In business many times it's just better to pass on certain products and customers selling a dentist a digital Impressin system is an example that. No renewalable sale after the capital sale, low margin, huge customer satisfaction issues and a return rate approaching 40%. "dr I would just keep using your regular Impergum, works pretty good" should be the advice.
 




""dr I would just keep using your regular Impergum, works pretty good" should be the advice."

OR

Impregum has been around almost as long as electric lights, no matter how it is packaged, dispensed, etc. and is not an easy material to use genrally. In other words, it takes talent to use for outstanding results - so that leaves about 80% of dentists and their dim-bulb staff out of the equation, right out-of-the gate. You should have been around to watch them try and spatulate it on a mix pad - a real Laugh Riot.

Personally, I'd find a mediocre -somewhat pricey - easy-to-use/idiot/dentist proof C&B /general use material, bring the Factory Rep in for a 'wow' factor (and to buy me breakfast and lunch), and switch the bored dental office to something 'new' that is less likely to cause me long-term grief but a few pennies in residual commission until they go catalog shopping after they get used to it. It would be a Bonus if the box and packaging has multi-colors and some happy, smiling people on the front. . . Maybe even a give away, like Buy $10k worth and send in your box ends to get a free box of color-coded paperclips, etc. They like that too.

Initially I'd bury then in a 'meeting special' bulk purchase or some such thing to try and keep them committed to it. Find out their C&B lab - make sure the new goo actually works OK and then use that strategy in the rest of the territory when these clowns get bored with the goop they are shoving into a patient. Maybe even have the C&B lab send out a mailing (on their dime - I'll provide literature through the wholesale man) with my contact name on it - something.

Thus endeth the Lesson.
 












Anonymous said:
""dr I would just keep using your regular Impergum, works pretty good" should be the advice."

OR

Impregum has been around almost as long as electric lights, no matter how it is packaged, dispensed, etc. and is not an easy material to use genrally. In other words, it takes talent to use for outstanding results - so that leaves about 80% of dentists and their dim-bulb staff out of the equation, right out-of-the gate. You should have been around to watch them try and spatulate it on a mix pad - a real Laugh Riot.

Personally, I'd find a mediocre -somewhat pricey - easy-to-use/idiot/dentist proof C&B /general use material, bring the Factory Rep in for a 'wow' factor (and to buy me breakfast and lunch), and switch the bored dental office to something 'new' that is less likely to cause me long-term grief but a few pennies in residual commission until they go catalog shopping after they get used to it. It would be a Bonus if the box and packaging has multi-colors and some happy, smiling people on the front. . . Maybe even a give away, like Buy $10k worth and send in your box ends to get a free box of color-coded paperclips, etc. They like that too.

Initially I'd bury then in a 'meeting special' bulk purchase or some such thing to try and keep them committed to it. Find out their C&B lab - make sure the new goo actually works OK and then use that strategy in the rest of the territory when these clowns get bored with the goop they are shoving into a patient. Maybe even have the C&B lab send out a mailing (on their dime - I'll provide literature through the wholesale man) with my contact name on it - something.

Thus endeth the Lesson.
Click to expand...
 




This guy knows dental and how to deal with these twerps. In the year since his post, I bet his business has doubled. Either that or he is now sitting at the head of the Patterson table.
 




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