Something that used to irk David Buelna, DVM, co-owner of Circle B Veterinary Hospital in Katy, Texas, was recommending a brand-name product to pet owners and then seeing them bypass him and purchase the item online or at a superstore. He decided that something needed to be done. He found the solution with private labeling.
“Now they leave here with my custom products and when they need them again, they come back to me,” Dr. Buelna said. “Going to custom labeling has been a practice-changing experience.”
Dr. Buelna also utilizes private labeling to market his practice to new clients.
“When they see our name on many of the labels in our lobby, it helps build credibility,” he said. “Owners who find a practice that has taken the time to do the small things will certainly take the time to care for their pets. In our community, branding through constant exposure of our name is our ally in helping spread the word.”
100 SKUs
Custom labeling, or what’s more commonly referred to in 2018 as clinic-branded labeling, is the process of veterinary hospitals promoting their own brand of products — items a client will find nowhere else because the labels are unique to the practice.
A custom label program provided by Stratford Pharmaceuticals of Oldsmar, Florida, allows a clinic to take any Stratford product and make it the hospital’s own. The company has over 100 SKUs in the key categories of dermatology, otic, dental, well-being and joint health.
Given the explosion of online pharmacies, Amazon and retailers such as Chewy.com, all veterinarians should look at ways to keep business in-house and persuade pet owners to come back to reorder, Stratford CEO Brian Nugent said.
“Chewy.com didn’t exist five years ago,” Nugent said. “The majority of their customers came from pet owners who were originally introduced to companion animal health products by their veterinarian.
“These savvy-shopping pet owners found they could purchase the same products online,” he said. “This is a serious problem that veterinarians have to contend with today. If these veterinarians had participated in clinic-branded labeling, they would drastically improve their chances of retaining their business as the clinic-branded products are only bought and sold in their practice.”
To help the practitioner, Stratford also offers customized and clinic-branded marketing materials such as posters, window clings and client literature. All this helps a hospital promote, market and sell its own products.
“A clinic can send us their logo and we generate a label proof via email for them to approve,” Nugent said. “Once the label has been approved, the product is prepared for shipment to the clinic.”
A Little History
The catalyst for custom labeling, Nugent said, was the growth of internet pharmacies like Drs. Fosters & Smith (now owned by Petco), PetMed Express and Chewy.com (now owned by PetSmart).
“Private labeling has been going on for years in many industries,” Nugent said. “Even in the vet industry, large companies like Banfield have been private labeling their house brand for years. The reason they were able to do so was because they had nearly 1,000 locations and they were able to spread out the cost and meet manufacturing minimums.
“The individual veterinary hospital didn’t have the ability, buying power or storage facilities to handle this. Until now.”
Stratford’s program allows an individual hospital to private-label as little as one case at a time.
“Veterinary medicine is regarded as one of the most trusted professions in America, and the pet owner believes the brand approved by their veterinarian is going to help the overall health and well-being of their precious pet,” Nugent said. “This also leads to referrals from friends and family, additional appointments booked, and overall more customer contacts for the clinic.”
Custom Labeling in Action
What typically happens today, Nugent said, is a pet owner brings a dog or cat into the clinic, the veterinarian makes a diagnosis, and the doctor dispenses a brand-name product from the clinic pharmacy.
“After 30 days, or when that bottle is empty, the pet owner has a decision,” he said. “They can either A) go back to the clinic and get a new bottle, or B) they can search online and find the exact same product and order it delivered to their house.
“Under scenario B, the vet gets cut out of the equation.”
With a clinic-branded label, the pet owner doesn’t find the label online and the chances rise of the pet owner returning to the clinic.
Marty Goldstein, DVM, of Smith Ridge Veterinary Clinic in South Salem, New York, said custom labeling would best be used with health care products, nutraceuticals and food.
“Private-labeling medications, unless common over-the-counter products, pose some risks with the overshadowing of the higher governmental agencies,” he said.
He carries clinic-branded products under the “Dr. Marty” name. The move, he said, boosted the level of trust with his clients.
“On a financial level, there are also a few advantages making private labeling worthwhile,” Dr. Goldstein said. “Your clients will have a tendency to choose a product with their own veterinarian’s label on it, and there’s a good chance, especially if order numbers increase, that you can strike a deal with the manufacturer to get an even better wholesale price.”
Mitsie Vargas, DVM, of Orchid Springs Animal Hospital in Winter Haven, Florida, has used private labeling to sell over-the-counter products and provide a less expensive alternative.
“If you want to prosper in this era of Chewy.com and the other multitude of internet pet outlets, you must offer a unique option that still allows us to get enough profit while remaining competitively priced,” Dr. Vargas said. “Personalized products can look as expensive as major brand ones but have a boutique feel, and they are appealing to choosy owners. The advantage is that they cannot be completely matched and they make you stand out in a crowded marketplace.”
Building Loyalty
Circle B Veterinary Hospital uses a rewards program in conjunction with its branded products, a strategy designed to build client loyalty.
“People choose to continue to purchase from us because they are rewarded with every dollar spent, which in turn increases our exposure in the community,” Dr. Buelna said. “People recognize the name, and if they recognize the name, that’s already a victory.”
Dr. Vargas likes the control that custom labeling offers, as she can be as creative as she wants. She can even rename the product.
“Putting your logo and number on it is a great way to advertise your business,” she said. “It also offers an easier way for that client to reorder when you put your name or website on it.”
Money Matters
Due to its enrollment in programs through MWI Animal Health, Circle B Veterinary Hospital got custom-labeled products below the cost of competitor products.
“Essentially, it did not cost us any extra to use our own labeled products as opposed to other branded products,” Dr. Buelna said.
Orchid Springs Animal Hospital began purchasing Stratford’s clinic-branded products in 2012. Since the introduction of a custom product line in Dr. Vargas’ clinic, she has seen sales increase from $6,000 annually to over $40,000.
Is It for Every Practice?
Victor Oppenheimer, DVM, the veterinary director at Hospital de Animales Perla del Sur in Ponce, Puerto Rico, said custom labels could be useful in building a reputation and increasing earnings. However, he sees some risk involved.
“If a private-labeled product were to lead to an allergic reaction or other adverse effects, it could put my name or hospital in a lousy position,” Dr. Oppenheimer said. “The ethical ramifications of producing a custom label are a significant consideration. Personally, I don’t feel comfortable taking credit for a product that I didn’t personally produce. Still, I think that starting a custom label could be a very lucrative move for veterinarians.”
Clinic-branded products build great rapport between the clinic owner, practice manager and staff, Nugent said.
“The entire team gets excited about how great their clinic-branded label looks and about the opportunity to promote their clinic through a quality animal health product line,” he said.