How to take your cosmetics- dispensing program to a new level
A esthetic plastic surgery patients often find themselves lost in a sea of confusion at a cosmetics counter in a department store or boutique. They worry that they may purchase the wrong products from commissioned salespeople.
Successful aesthetic surgery practices today are offering patients the education they need to keep their skin healthy and youthful, and are providing preventive as well as corrective care. Think of skin care as an adjunct to your existing practice and a convenient service for your patients that enhances the treatments and procedures you already offer. Patients will enjoy the convenience of one-stop shopping and having a physician or professional skin-care expert explain how to use the products at home.
Skin-care-product buyers are becoming more sophisticated and knowledgeable about the physiology of the skin, and they are demanding exceptional performance from all types of personal-care products. This development is not limited to major metropolitan areas. The Internet has created a new generation of online skin-care-product buyers who use it to shop for their supplies as well as to replenish them.
Cosmeceuticals represent the fastest-growing segment of the personal-care industry, and it is one of the best-performing segments of department stores’ skin-care businesses, according to the NPD Group, a marketing consulting firm headquartered in Port Washington, NY. Distribution channels are also highly diversified: Cosmeceuticals can be purchased from mass-market and direct-market retailers, prestige retailers, specialty stores, spas, salons, and gyms, as well as from plastic surgeons and dermatologists.
Your ethical standing as a physician depends, in part, on whether patients feel that they are getting reputable products that are safe and effective, and that offer value for the price.
According to Rhoda Narins, MD, president of the American Society for Dermatologic Surgery, “Dermatologists who dispense in their office should do so in a manner with the best interest of their patient as their highest priority. Quality patient care should override financial incentives as the primary concern in every medical office.”
Marketing and Promotion
Although the factors of space, staffing, storage, and product selection can seem overwhelming, adding skin care to your practice is much easier and less expensive than you might think. The startup costs are relatively low compared to adding a $100,000 laser device.
If you are just starting out, stick with established skin-care companies that offer turnkey programs that include on-site staff training, patient literature, signage, testers, samples, and ongoing support. Recognizable brand names give patients a sense of comfort and confidence with the products you are recommending and enhance your credibility. Many niche brands have become popular among beauty consumers because of the media attention they have generated.
You will need a cabinet or display case in patient areas to maintain an attractive product assortment. This selection should be changed frequently as new products are introduced to maintain patients’ interest. Testers enable patients to see how a product feels on their skin, and to check its fragrance and degree of cosmetic elegance. The testers should be kept clean and neat, and should be placed in an easily monitored location.
If your vendors offer samples, either as part of your order or for a small additional charge, consider placing them in designated locations for patients to take home and try. Consider giving out a sample of a new product with each purchase to give patients an opportunity to become familiar with the products you offer.
It is helpful to have personalized collateral materials, in the form of cards, books, booklets, or brochures, that explain your skin-care philosophy to your patients. Creating an order form with your entire product assortment can increase sales and make replenishment easier for the patient.
Elaine Linker, cofounder of Doctors Dermatologic Formula, a skin-care-products company in Yonkers, NY, says, “Select products for therapeutic value, individualize your skin-care regimen for each patient to achieve optimal results, and give patients detailed printed instructions so they know how to follow the regimen you are prescribing. Product education is not only helpful for the patient, but it makes it easier for your staff to sell skin care as well.”
Finally, adding a shopping-cart feature to your practice Web site, or designing it as a link to a microsite, will increase your sales potential. If you are planning to ship products from your Web site or from an order form, you will need to establish reasonable shipping and handling fees.
Product Selection
To succeed, you must first identify your customers’ needs in the market and link them directly to product attributes. Look for product lines that address your patients’ specific concerns. Acne, anti-aging, and hyperpigmentation products are the most common. For example, an older patient population may be most concerned with lines, wrinkles, sags, and blotches. Younger patients will most likely be more interested in acne therapies.
| Key Cosmetics Categories |
| Basic Skin Care • Cleansers • Moisturizers (face and eye) • Sunscreens • Anti-aging products Advanced Treatments Additional Product Types |
Your criteria for choosing a product mix should be:
• patient population;
• demographics;
• psychographics;
• skin concerns;
• other services you offer;
• price point; and
• patient requests.
Although it is common today for physicians to offer multiple lines, stocking overlapping or similar products can confuse patients. If patients are shown too many products, they may become overwhelmed. Start a patient on one or two products from a particular line and expand on these as they become acquainted with the line and its benefits.
You do not need to invest in a complete line immediately. Most vendors will allow you to “cherry-pick” the specific products you like that work best for your practice. Once your staff and patients become comfortable with the line, and your volume grows, you can add more items.
Keep it simple by starting with four basic categories of products: cleansers, moisturizers, sunscreens, and anti-aging products (see box above). To break these categories down even further, you may want to have a gentle all-purpose cleanser, a creamy formula for dry skin, and a purifying or gel-type cleanser for oily skin. Pads are another big seller in medical offices; they are a convenient and user-friendly addition to any skin-care regimen.
Moisturizers should similarly reflect the most common choices: a lotion, a cream, and a product that contains a sunscreen for daily use. The anti-aging category may include an alpha-hydroxy acid, an antioxidant, a peptide, and a retinoid, for example.
Begin with the basics of general skin care and sun protection for a full range of skin types. Every patient you see will need a sunscreen and a moisturizer. Later, you can add specialty treatment products such as acne preparations and pigment lighteners. The best indicator of what products are missing from your current selection is your patients.
Once you have built up your skin-care business, you can also consider adding hand-, nail-, and body-care products. Makeup presents new challenges in that you will need to carry a variety of foundation and concealer shades. Certain color-cosmetics ranges may also be a worthwhile addition, but only if you have a dedicated person on staff (an aesthetician or makeup artist) to manage it. Unlike foundations and concealers, trends in color cosmetics tend to change by the season—akin to fashions—and will need to be constantly updated.
Private-Label Products
Another option for the experienced dispensing physician is to work with a contract manufacturer to customize a product assortment for your practice. Dispensing your own product line while carrying other brands is by no means mutually exclusive. It has become commonplace to integrate both selling philosophies into a practice.
Private-label skin-care products enable you to personalize a product line for your practice affordably. Each product will have a custom label with your practice name, your name, or the name of the line, along with your logo or other identifying graphics. The profit margins can be substantial, with markups that can range from 100% to as much as 800% in some cases. Every laboratory will have a minimum initial order requirement for each product, and many physicians start with a limited number of key products.
“You as the physician have to believe in your dispensing program and integrate discussion of your products at the appropriate time in the course of your patient’s visit. It’s not about what we can sell this patient; it’s about how the patient can benefit from what we sell,” according to Neal Schultz, MD, clinical medical director of Dermato-logic Cosmetic Laboratories in East Haven, Conn.
You may also wish to develop your own unique formula, but the startup costs are substantial—$30,000 or more per product. To investigate this option, you can consult with a contract manufacturer who can handle the entire project for you or hire an independent cosmetic chemist. Protecting your own formula may require a full-scale patent search to rule out any potential patent-infringement lawsuits.
Inventory Management
To dispense products in your practice, you must obtain a business license and sales tax number in complicance with the laws of your state. If you are doing business as a corporation, you already have a tax identification number. Consult with your accountant or billing software about how to calculate taxes on products sold. State and city sales tax, if applicable, can be filed on a quarterly or annual basis. For more information, visit http://[removed]www.aicpa.org/yellow/[/removed] yptstax.htm.
As you expand your skin-care practice, you will need to allocate space for secure product storage. Products left out in treatment rooms, restrooms, and patient areas may disappear. Storage spaces should be enclosed to protect your wares from dust, dirt, and light; they should be somewhat climate controlled to preserve product consistency and limit spoilage. It is wise to allow only one or two key staff members access to the supply to prevent pilferage.
Numerous computer programs are available for inventory control, including dedicated tabletop checkout systems that will keep track of exactly what has been sold and what is in stock. More products today have bar codes incorporated into the packaging or box that simplify this task.
Consistent inventory management will also help you avoid running out of products. No outdated, damaged, unwanted, or unsaleable inventory should be kept. Check with vendors in advance about their return policies for products that are not selling or have passed a reasonable expiration date.
Staff Involvement
Because your staff will be responsible for marketing your skin-care business and selling products, it is essential to have them on board with product selection from the outset. You and your staff need to stay current on product trends and innovations. Your staff should also become knowledgeable about all of the products you offer—their benefits, their key ingredients, and how they work—to be able to answer questions about their usage, possible irritants, fragrance, and pH. The more involved and familiar your staff becomes with the products, the more interested they will be in talking with patients about them.
Consider bringing in an aesthetician on a part-time basis or identifying a medical assistant or nurse on staff who may be interested in learning to do treatments or discuss skin care. Some nurses may feel very comfortable discussing products with patients, while others will resist it. Aestheticians will usually require a payment plan that has a built-in bonus or incentive program.
“Despite the fact that this is commonplace in the day-spa and aesthetician world, in the nursing field it is sometimes considered demeaning to work to sell products for a bonus,” according to Joel Schlessinger, MD, president of Lovelyskin.com.
Keys to Success
To grow your product-dispensing business, you have to take it seriously and devote the required time, money, and effort to set it up in a professional manner from the outset. A haphazard approach to dispensing skin-care products is destined to fail.
“Start small, and make sure your staff feels comfortable with your product selection. It is a good idea to test every product you want to carry on your staff and your patients to avoid making costly mistakes,” says Schlessinger. “Developing a skin-care center can be a great benefit to your practice and a boost to patient satisfaction.” PSP
Wendy Lewis is an international consultant, author of America’s Cosmetic Doctors (Castle Connolly), and editorial director for MDPublish.com, a medical marketing and publishing group.
