There is a lot of buzz in the dental industry surrounding Amazon and their possible entrance into the dental supply market. Recently the Academy of General Dentistry (AGD) partnered with Amazon and published a webinar to help dentists understand how Amazon can help our dental practices.
Amazon is a marketplace where sole proprietors and big businesses can list and sell their products. Much of what is sold on Amazon is not owned and shipped by the company anymore – http://fortune.com/2016/11/17/amazon-third-party-sellers-holiday/
Amazon listing dental supplies will likely be a good thing for dentists as the marketplace traditionally drives down prices as vendors compete with one another on price. As downward pressure on dental fees continues as highlighted in Massachusetts recently, dental practice owners will be required to re-evaluate their supply costs and there is the potential that Amazon may play a key role in reducing the costs associated with providing quality care.
There are grey market concerns, but a grey market is a short-term problem as Amazon could easily implement a program to screen their sellers which could be as simple as additional requirements to gain authorization to sell a product intended for use during patient care. Furthermore, it is not uncommon for Amazon to kick an unrepeatable seller off their platform. If Amazon suspects that a product is counterfeit, they can request that the seller provide proof of purchase from the manufacturer or authorized distributor of the product in question.
Late last year there were rumors that there was a deal in the making between Patterson and Amazon (this was reflected in a brief rally in share price for PDCO, followed by a drop to a 52 week low when the expected deal was not announced last November). With Amazon, it’s just a rumor until it’s not, and I would expect Amazon to eventually make a deal with one of the larger distributors of dental supplies. I don’t think Amazon will begin selling the supplies on their own anytime soon because a lot of dental products are temperature sensitive and Amazon’s warehouses are notoriously hot (I am not sure if they’ve fixed this yet, but Amazon will not be responsible for housing items that cannot be stored between 50 and 100 degrees and many dental materials require storage in a stable, narrow temperature range).
