Optometrists often ask me about frame board management (FBM). I get the feeling they would like a very short answer that would completely solve all aspects of this task. I think they might really love an app on their iPhone that would take care of it for them. While I don’t have a super-short answer or an app, I will make FBM fairly easy for you in this article. I urge doctors and their key optical staff members to give this task more personal attention. I believe your frame inventory is important enough to warrant your best personal judgment on an ongoing basis.
I think the best approach to frame board management is for the OD/owner to meet with the optician, frame buyer or optical manager on a quarterly basis and review and rebalance the inventory. I like having a frame board committee because I want input from several people on what frame styles, brands and price points the practice needs. It might be tempting to delegate all of this to the staff, but I highly recommend the OD owner become involved. Optical dispensing may not be high on your priority list as an optometrist, but as CEO of the practice, it should be. The frame selection you have on display is extremely important to the success of your optical and there is a great deal of profit riding on that.
Before you meet with your frame committee, I would like someone to prepare what I call an FBM worksheet. The only way to make smart decisions and design a good plan going forward is to have data about your current frame inventory: Make up a document template with places to insert the following items:
List all parent frame companies that you carry.
Below each parent company, list all frame brands sold by that company that you carry.
Put the sales rep’s name after each brand.
Show the current number of frames you have on display after each brand. This is easier than a true inventory. Just count the frames in each brand and show the total.
After each frame brand, show the range of prices for that brand. I’d like to see a range for the Frames Data wholesale prices and your current retail prices. Also, make a note of the discount you receive on this brand.
Add up all the frames-on-hand quantities to give a grand total of frames on display.
If you have frame understock, count them and show that total.
You may have an inventory module in your practice management software that will provide some or all of this data, which would be great, but doing it manually once per quarter is not very difficult. We want accurate numbers. Be sure to date and save all these FBM worksheets so you can review the changes you make over time.
Once the frame inventory data has been collected, set up a meeting to review the worksheet with your key staff members and have an open discussion of frame buying. I recommend setting aside at least one hour. The first meeting may take longer than subsequent meetings because you should review all aspects or frame buying and pricing. Many good side topics may branch off from this discussion, including how to display frames, what mark-up formula is used, how to reorder fast-selling frames and how much understock is needed.
The goal is to make decisions about the frame inventory and to develop a plan for buying frames in the future. As you review the list of frame brands, consider these points:
How is this line selling? Is the brand perceived well by the public?
Does this brand look similar to other brands? Is it repetitious?
Does this brand fill an important niche demographic?
How does this brand fit into the desired mix of retail price points?
Do we like working with this company, the rep, the discounts and the service?
Do we have the correct number of frames within each brand? Should we increase or decrease?
Are there some brands we should drop completely?
Are there any new brands we should consider adding?
Active frame board management requires judgment that only the practice owner and staff possess. You know your market and patient base better than anyone. It is perfectly normal for some frame lines to sell down quickly while others take longer. It is quite possible to overbuy in some brands. The quarterly FBM meeting is designed to adjust the numbers of frames in each brand in the coming months to reflect the current goal.
As you review the FBM worksheet, do some calculations to determine the percentage of the total frame inventory in various price ranges. You want a nice representation at the low end and the high end. What is the lowest price point you should offer? What percentage of frames are currently in the following retail price points:
$150 to $250
$250 to $350
$350 to $450
$450 to $600
Once you have your current mix, talk to your staff about what it should be. Consider your local market and income levels. Consider your eyeglass Rx retention rate.
A popular idea is to assign a specific number of spaces on the frame boards for each brand and let the sales rep manage those spaces as he/she sees fit. The theory being that the rep is incentivized to provide the best frame models at all times to maximize sales. I think it is smart to work closely with frame reps and rely on their advice, but it is important for the practice to monitor and coordinate the big picture of diversity of frame styles and price points. I want to retain the ability to change the number of frame board spaces allotted to a brand at any time.