Cash Flow issues?

Hearing from manufacturers that Patterson is now asking for 120 day terms vs the normal net 30 with additional discounts of up to 5% if paid sooner. Also asking for a yearly "Fee" to be paid by manufacturer, in order for Patterson Reps to sell their products. Sounds like preparations for a buyout or prolonged period of cash flow issues... either way not a positive way to conduct business. Yes good for Patterson the terms but not a positive way to "partner" with our vendors...

 

Never heard anything like it, but it takes money to pay that dividend and the board))))

Regular cost cutting measures were indeed implemented.
Most branches are extremely lean, salaries are lower than competition in general.
Don't see anybody buying them at premium, too much hassle.

 

Are you naïve enough to think that other industry leading companies don't engage in these types business practices? Because they can? Schein has been doing this kind of thing for years..... at least they did when I was there. Glad Patterson caught on.

 

So yeah, this type thing is absolutely standard operating procedure in other industries. Leverage your position with vendors as hard as you can. If a publicly traded company can use it's manufacturers as an interest free source of funding for up to 4 months while simultaneously cutting payroll and charging it's individual branches a net asset charge of 1.5% monthly for items billed and not yet collected, it makes for a healthier free cash position. As stated above, Henry Schein has long operated under this model. Maybe we'll be able to extort all the manufacturers to pay for a big national sales meeting like they do every year. Fact is, there are no real partnerships left in this business. The market has demanded that rock bottom pricing trumps all period. When our customers are no longer willing to honor a value added relationship and unapologetically discard Patterson to save a buck, it's time to back up off of those mid western values a little. Special markets is a slippery slope and we're now picking up steam on the way down.

 

I agree, this is par for the course, I don't know that the person is naive just wanting to believe in doing business the old fashioned way. Well it's 2017 and money is money. The problem Patterson will have is though that they will be seen as having issueses by many. The loss of revenue due to cutting producers (Regardless of your opinion, those cut last June produced), and the need to curtail costs at every turn means Patterson is having issues. Now if Schein has been doing this and leveraging their "relationships" for years then that just shows how behind the times Patterson really is... Ok, no like thats a secret but still you get the point. The real rub is the way the bad taste the manufacturers have when Patterson comes to them and does this and again as quoted the net asset charge to the branches etc. Corporate continues to get fatter and I'm not talking about Misiaks waistline but rather their coffers. Blood from a turnip ladies and gentlemen thats the way of things these days.

 

Fire the salesman. They are dead weight and revenue negative

You're Welcome.

 

Good post. The dichotomy is Patterson wants to maintain this above board "we are the good guys" persona all the while morphing into a very Schein-esque organization. Just watch as they tell us all how much they honor and appreciate the sales people unlike the evil HSD who routinely administer pay cuts and take accounts from retail reps diverting them to special markets. One year later, PDCO doing the exact same. Plus shedding weight in the sales force. Manufacturers have long loathed how they are treated by Schein corporate and we will soon be looking and smelling just like them. Just without the cut throat resources to be successful at it.

 

Mitch and Murray asked me for a favor and I said the real favor is to follow my advice and to fire your fucking ass because a loser is a loser.

 

There's resources aplenty if the boys at corporate would stop giving each other raises and hiring more insulating layers of directors and Vp's.... but that would take leadership and an understanding of how to run a company and they don't possess the knowledge beyond running a lemonade stand....

 

"Plus shedding weight in the sales force."

That's a Good Move, up to and including getting rid of them altogether.

"Manufacturers have long loathed how they are treated by Schein corporate and we will soon be looking and smelling just like them."

You already do smell much worse than any mfg. and IF the mfg. had any balls they would already be selling direct-to-the-customer like so many other successful companies are already.

A dealer in dental products is a 19th Century concept and truly is not needed in today's business environment.

 

Selling sundries and small equipment direct / online- yes.
Capital equipment - not so much, but you won't need big boys to do that.
This has bee done in Europe for years.

 

"Capital equipment - not so much, but you won't need big boys to do that."
Nonsense. You don't need any retail-field reps for that. None. The shithead dentist-cheapskate spoiled-rotten by retail customer gets off their lazy ass and attends a convention to actually BUY something, just not a day out-of-the-office slurping down Free Coffee. IF they miss the opportunity - Too Bad. Travel to another convention or wait until next time around. Bring your credit card for a deposit doctor.

"This has bee done in Europe for years."
See. You answered your own question (with only one mis-spelled word).

When your 'career' in dental mercifully ends, maybe a job as an Editor-trainee ? You sound smart.

 

Branches have paid 1.5% on billed, not collected to corporate for many years.....thats not something new.