February 10, 2011
Thrift commerce meets veterinary medicine in GroupDVM
Company uses 'power in numbers' to leverage deals for veterinarians
By: Jennifer Fiala
For The VIN News Service
A new online buying group is targeting the veterinary profession, offering DVMs big deals on products if enough users opt in to buy.
GroupDVM functions a lot like Groupon — the king of online thrift commerce, offering users cut-rate deals on everything from wine and restaurants to photography and yoga classes. The difference is that GroupDVM provides savings on animal health-specific items such as sharps and therapeutic pet foods, with plans to soon go beyond consumable products to include deals on equipment.
Another distinction relates to confidence. As Groupon carves a place in America’s collective consciousness, some veterinarians are wary of GroupDVM, which came online in January. Members of the Veterinary Information Network (VIN), an online community for the profession, have been sharing GroupDVM e-mail solicitations with questions about the company’s legitimacy.
“I don't know how they can make the promises they are suggesting of getting a BIG discount off things. That makes me leery,” writes Dr. Lisa Bennett, owner of Beaver Lake Animal Hospital in Issaquah, Wash., in a VIN discussion.
Founder Daryl Schraad says the idea behind GroupDVM is simple: The company gets a line on discounted goods direct from manufacturers and authorized distributors, and passes it along to members. For most deals, a certain number of GroupDVM users must commit to purchasing the deal to activate it, meeting a threshold known in the industry as the “tipping point.” No one is charged until the deal goes through, with most offers live from three days to a week. Recent deals include:
• A 12-bottle case of ProMotion for $159.55. The list price is $398.88.
• A four-case assortment of ClearChoice Premium safety vials for $140.99. The list price is $249.99.
So far, 5,000 veterinarians, practice managers and technicians have signed on with the company, Schraad says, and 85 percent of users are practicing DVMs. Of the 10 deals that GroupDVM has presented since January, seven reached their tipping point. Based on that success, the company now is exploring the veterinary equipment market, though Schraad did not offer specifics on types or brand names.
Schraad notes that no equipment deal would come without a footnote that the buyer must first see and use it. Ideally, equipment manufacturers would arrange demonstrations with
prospective buyers. “You could opt in to get the best price on a piece of equipment, but you’d first need to touch it. There needs to be a demonstration,” he says.
Though GroupDVM operates in cyberspace, Schraad appreciates the value of hands-on presentation, having worked in pharmaceutical and medical fields for more than two decades. He got his start with Pfizer in 1989, selling pharmaceuticals on the human side. Schraad ventured into animal health as VetCentric’s vice president of sales and business development. In 2007, he left to join the now bankrupt Professional Veterinary Products, Ltd. (PVP), working as the company’s vice president of sales and marketing.
Schraad says he jumped the PVP ship 18 months ago when a merger fell through, prompting him to start his own business under the name Animal Health Digital, or AHD, the parent company of GroupDVM. Another business Schraad owns is called Digital DVM, which consults for the animal health industry on technology, evaluating veterinary home delivery platforms and the like, he says.
But Schraad’s passion is GroupDVM, a concept he claims to have had brewing before Groupon and other outfits like it hit the online consumer scene. “This concept goes back to the old ag days when one vet would buy a truckload of ivermectin and split it with his colleagues."
Focusing on service, Schraad has hired eight employees from the animal health arena to ensure that the products GroupDVM goes after are useful to the profession. Additionally, GroupDVM leases office space in the same building as a private veterinary clinic. While the two businesses have no formal ties, the proximity provides GroupDVM with what Schraad calls “close market research.”
Veterinarians with Evergreen Animal Hospital, the practice operating near Groupon, did not immediately return phone calls from the VIN News Service seeking their perspective on GroupDVM’s business operations.
Schraad says he’s spent enough time dealing with the profession to know some of the pitfalls that could impact the success of his operation.
For example, he’s wary of any perceived ties to drug diversion, the process by which products such as pet parasiticides are sold to unauthorized dealers for resale to consumers. Most veterinary pharmaceutical manufacturers have policies restricting the sale of certain products to licensed, practicing veterinarians. Finding those items on the shelves of pet stores and big box retailers has raised the hackles of many in the profession.
For that reason, Schraad wants it to be clear that GroupDVM deals directly with manufacturers and authorized distributors and does not dabble in gray market channels. Only veterinary professionals working at an active animal hospital can purchase from GroupDVM, and the company checks the licenses of buyers and their practices. Prescription products are restricted to licensed veterinarians.
“We don't just facilitate the deal, we make sure these products aren't going somewhere they shouldn't,” he says. “Our role is to leverage the number for veterinarians to get best prices. We get a transaction fee from manufacturers or distributors, and it’s in the single digits. We’re out to save money for veterinarians.”
Schraad maintains that GroupDVM serves an especially important role now that veterinary pharmaceutical players and others are consolidating, a phenomenon that's known to drive up prices due to reduced competition.
“This is the time when collective purchasing is needed the most — when everyone is consolidating,” he says.
Signing up to receive GroupDVM alerts requires a user’s name, job title, clinic name and clinic zip code. There’s no pressure to buy, Schraad says, “you can opt in or ignore.” And if there’s a problem with a product, the company promises to go to bat for the end-user.
“Any return policies or guarantees come from the manufacturer and are spelled out in the deal,” he says. “But we’ll take care of any problems. We’ll issue immediate refunds, and wrestle with the vendors on our end.”
VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email firstname.lastname@example.org.
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