Very Dental: Transparency vs. Tradition and the New Rules of Dental Supplies with George Khoury

[00:00:01] This is a production of the Very Dental Podcast Network. This is the Very Dental Podcast. Welcome to the Very Dental Podcast, where you'll find entertaining and relevant conversations with visionaries, clinicians, and your friends in the dental space. Now, here's your host, Dr. Alan Mead.

[00:00:29] Very Dental people, welcome to another episode of the Very Dental Podcast. I'm really excited today. I have a new friend with me. His name is George Khoury. George, how are you doing? I'm well, how are you? I'm good. And I'm interested to talk to you about a whole bunch of stuff. George is the VP of Enterprise Sales at Net32. And many listeners have noticed that I've been working with Net32 now for a little while, but I've not really talked to anyone from Net32.

[00:00:57] And so that's why I'm trying to bring some of these folks on because Net32 has a really interesting proposition for the dentist. I own a dental office, and it's kind of a small mom-and-pop operation. And so there was a time when I just didn't think that much about supplies.

[00:01:17] And frankly, I think more about supplies now than I have at any time in my career. And Net32 has kind of helped me think of that. So I just am welcome to the show, George. Now, you have had a long history in the dental industry. It seems like particularly the dental supply industry. Tell me a little bit about yourself and kind of where you came from.

[00:01:40] Sure. I actually came from a family who grew up in the dental business. I grew up in Syracuse, New York. And my uncle owned a small local family-run, basically, dental distributor. And so I kind of was brought into the business through those connections, never really planned on it.

[00:02:10] But, you know, the business was very good to my family. And ultimately, that business was gobbled up by Sullivan Dental, which was then merged with Shine and then became Sullivan Shine and ultimately now is called Henry Schein, of course.

[00:02:28] And so I essentially, out of college, took a sales role for a company called Septodont, which is the largest manufacturer, worldwide leader in anesthetic. Interesting. And I worked on the manufacturing side. Okay. And that was really kind of how I broke into the business. Okay. I got to tell you, Septodont, I have to say, Septodont has a product.

[00:02:56] I've talked about a thousand times on this podcast. It is a periodontal ligament syringe called the Peridont or the Periject. I swear to God, I must have 10 of those things in my office. It's like, and last year, a couple of years ago, Septodont was working on a product that was really interesting. It's a chair-side OPH balancing. What do you call it? Septodont's an interesting company. We've worked with Septodont, too. So I didn't realize you came from there. That's cool. Yeah.

[00:03:26] I think I know the product that you're talking about is supposed to take the sting, right? It does. And there's a lot of products out there, and they worked with Premier, and I'm blanking on the name of it, but it's really, I've used it. It's a slick product. It really is. It's for, I'm having a hard time thinking of the word, which is what happens to 54-year-old people. There's a word in here that I can't pull out, but it's pretty cool. So anyhow, Septodont's a cool company, and you started with them. I'm sorry. I didn't mean to derail us there. Yeah. No, love it.

[00:03:55] So that was really kind of my introduction to channel partners because we only sold through distribution. Right. So all of the traditional dental companies. Again, 30 years ago, there was no other way to sell dental product. You either sold direct or you sold through distribution. Yeah. Yeah.

[00:04:16] About two years or so into my tenure at Septodont, I was at a trade show in Washington, D.C., and one of my reps, one of my partner reps, introduced me to a doctor. And they kind of walked over and said, hey, you got to see this technology. And I went over to this booth, and it said Schick, like the razor. Yep. And I'm like, oh, wow. I didn't know razors were into the dental business.

[00:04:45] Turns out it wasn't. It had nothing to do with the razor company. It was the beginning of the digital x-ray sort of paradigm shift away from film. And I had a meeting with a gentleman there, the national sales manager, and he said, well, we have a job opening in Connecticut. And I was watching these things. It was like a frenzy around this booth, and it was technology. It was interesting. And I spent the next decade kind of getting digital x-ray into the dental business.

[00:05:16] Okay. And it was actually a very exciting time. And that kind of, after that decade, kind of led me to being recruited to Henry Schein. And I spent the next 17 years there in various sales roles at first, and then kind of moved up and ran different business units at an executive director level with Henry Shine on both the dental and the actual lab side.

[00:05:45] So they would call it clinical and lab side. So really the bulk of my time in the dental business has been with two companies, and I'm kind of proud of that. But I've watched over 30 years as our business has evolved. And about three or four years ago, I left Shine, and I took some time away to do some consulting and really think about what was next for me.

[00:06:08] I'm also in my 50s, and I've been in dental so long, I actually, for the first time, was faced with the reality that I might have to leave the dental business. And thinking about my family being in the business and all the time I've spent in the business, I really, the prospect was kind of sad for me that I would have to leave this business. But I was watching the traditional model sort of crumble. That's interesting. Yeah. I will say this. I'll say this.

[00:06:37] I feel like people in the dental industry really – okay, I only say this because, like I said, I've been a dentist going to shows for a long time. And what's really funny is you'll see people in the dental industry a lot of times really stay in the dental industry, even if they change companies. You'll see – That's right. I feel like over the years, I've seen faces that will shuffle around to different places. And that's an interesting concept.

[00:07:02] Like, so what is it that keeps people in the dental industry – and in your case, you sort of saw how the model changed and were thinking of leaving. But I'm curious what your opinions are on that. Well, it gets back to what somebody told me when I spent the first 10 years trying to get out of the business. People always have teeth. Yeah. They'll always have teeth. Yeah. And so you just got to figure out where you fit in the puzzle.

[00:07:28] But it's – I heard the terms recession-proof many times. That's fair. That's fair. I think that's probably accurate. That's interesting. Okay. So I guess I want to dig back in. Tell me about the traditional model that you sort of described as you noticed it – you saw that it was crumbling. And then maybe tell us a little bit about how Net32 differs from the conventional dental sales model. I'm curious to hear about this from you. Well, sure.

[00:07:58] In my time with the traditional distributor, I managed a field, a full field sales and service team. And it's a very – what we would call a high-touch model. Our representatives were charged with a territory of 150 to 200 accounts. And in theory would visit those accounts every two to three weeks depending on how often the customer honored them there.

[00:08:26] And they were to sell the doctor stuff, right? Equipment, technology services. And also field service break-fix and installation of equipment was also part of what we did. So it was a full-service model. Sure.

[00:08:43] But we started to see as the dental industry expanded into what we now call DSOs or franchise dentistry and all sorts of buying groups and people sort of banding together and saying, Hey, if I get 10 of my buddies with me, can I get a better price from you? And no different than us having a Costco, BJ's, or Sam's Club membership.

[00:09:08] These folks are part of groups either called a GPO, right, or a buying group. Or there's the Aspen and Heartland Dentals of the World franchise dental companies who come to the traditional dealers and say, Hey, look, we represent $40 million of business to you or $10 million, whatever the number is, we deserve a better deal.

[00:09:32] And when that change really started to happen sort of in the mid, like around 2010, 2008 or so, we started to see margin pressure. Which meant, you know, the amount of money that we could pay commissions for salespeople and to run this very expensive model that was under attack.

[00:09:57] And, you know, you really started to see traditional dental companies have to run leaner and have to run more efficiently. And in many cases have to increase their price, right? And so, you know, as I was making a decision to come to Net32, you know, this platform allows, it puts the power back in the clinician's hand. And I thought, well, that's kind of brilliant, right?

[00:10:25] I mean, it's very basic and easy and simple to understand. If I'm the consumer and I want to buy X product, whatever it is, cotton rolls or facted, whatever, composite. And it's the same brand. And I've got five different prices on the screen. I'm probably going to pick the best price, right?

[00:10:49] But even further now, as we've evolved as a company, we're also allowing the consumer to have full transparency on when the product will arrive. So you might say, hey, you know what? I want to pay $3 more for this because it's going to get here tomorrow or the day after versus save the $3 and it gets here next Tuesday.

[00:11:14] And that's just all a function of the practice, what they need, what their needs are at that moment. But in essence, at the heart of what Net32 is, it's very simple to just say it's an online platform, online marketplace like Amazon, right? That's an easy one. But what our aim really is and why, what drew me to the company is we're looking to empower clinicians to run a healthy practice. Okay.

[00:11:43] And my charge as the VP of enterprise sales here is catalog expansion, right? By meeting with various new partners or existing partners and empowering them to scale their business with us. Yep. And helping them be positioned for sustainable success on our platform because many aren't as sophisticated. They're only used to the old way, so this is a whole new ball of wax for them.

[00:12:12] And then by expanding our catalog to different products and services now that really help solve problems in a practice. So really it's beyond just bibs, cups, gloves. Now it's, you can, you are going to be able to see that you can buy almost anything you need at Net32. That's kind of where we want to get to, right? And we're evolving quickly.

[00:12:41] As far as, like I use, I use Net32 and what, what, okay, not to put words in anyone's mouth, but okay. So like Amazon, when you search Amazon for a product, sometimes Amazon sells it directly. A lot of times it's an Amazon partner that sells it. And a lot of the partners, literally they sell it and you don't even really notice that it's not coming directly from Amazon.

[00:13:07] Their marketplace is as if you've, I mean, I've used Amazon a lot, Amazon Prime forever. And the reality is the, for the most part at Amazon and frankly at Net32, the really smart move on their part is they make, they take most of the barriers down. They make it, they make it simpler to know what you're getting. Like for instance, okay, I have Amazon Prime and typically I'm going to lean hard on the, on the two day shipping.

[00:13:35] Like, and that's because I, because we've become so used to that kind of convenience. It's, they make it so you can, you can select your items by that or, or, or whatever. And so on some level, Net32 is kind of like that because I just interact with the Net32 website. I don't have to have another human being on the other end of my interaction doing the searching for me because the website is so well put together. I can figure it all out. I don't need, I don't need much help figuring the stuff out.

[00:14:03] So on some level, it's the efficiency is there, but also like an added layer of cost of having the sales rep that has been the traditional, you know, we've leaned on the sales rep traditionally in dentistry for so long. It sort of takes that out. So clearly I can see where there's a cost savings there and it's, you know, not to be cruel to sales reps, but I mean, that's just kind of how technology has, has come. Is that, is that kind of how Net32 looks at things? Yeah.

[00:14:29] There's no need to pay for what you don't need and you don't need, you don't need a sales rep to sell you dental product that you already know and that you can compare. Now we have the tools to do that. They were a necessary evil when I started in the business. And that's, that's the whole point of the evolution of the businesses, you know, you can do this thing that you have to do, which is order product to run your practice, but you can do it on your own terms. Yes.

[00:14:59] And you get to pick, you know, you're in control as you can do. I mean, on your own terms has a lot, there's a lot in that as well. First off, I can do it in my pajamas at home at night if I want to. Like I, or if you have someone who's ordering for you, they can do it. They can do it anytime. I mean, Net32 is open 24 seven. They can choose a lot of times, like for me, when I'm looking for something, it isn't a rush. I don't necessarily need it tomorrow.

[00:15:27] So I, a lot of times you can kind of choose by cost and, and knowing that it's not going to be, you know, overnighted. It's going to be a little while, but I, a lot of, a lot of the supplies that I need are, that's what I need. Occasionally I need it sooner. And, and there's a lot of options for that as well. All these things. So you can make a choice based on price alone, but that's not the, like, I think a lot of people think of Net32 as, okay, it's just price, price alone.

[00:15:54] But the reality is, is that it isn't, there's, you've got a ton of options and there's a, you have as much help as you need from the technology is what I've found. What's amazing to me is, is they'll list the same product coming from multiple places at multiple prices. And usually they're pretty good. But what, what's amazing to me is how I, you know, I'd never had an account at some of these places, but yet I can order from them. Tell me how that works.

[00:16:18] How, how, how is it that the smaller distributors have been able to take advantage of Net32 to get their, get their stuff in front of someone like me? Because we don't inventory product. They're in control. So just the same way the consumer is in control, we empower our partners to be in control.

[00:16:41] We have guidelines so that the consumer experiences it to a standard that we hold and that we continue to kind of raise the bar on. But as long as they meet our standard, we empower them to fulfill orders and ship and market how they see fit. And they get to set the price.

[00:17:02] And the, one of the biggest differences between, I would say an Amazon experience and a Net32 experiences in our lives, or I'll just speak for myself. When I go to buy a widget on Amazon, um, I may be looking for the best price, but I might not get the brand that I want at the best price.

[00:17:23] But I think that's, I mean, I think you can validate this, correct me if I'm wrong, but clinicians have their favorite products. And so do the dental team members that they're ordering stuff for. They have brands and things that they like. I got to have the XYZ brand of this. Yes. Right? Yes. And so now on Net32, I can pull that up and have five or 10 or 16 different prices. Right? And I can choose. Here's the price.

[00:17:53] Here's my fulfillment. Here's a great price that might not get here for five days. Yep. Here's a really good price that's going to get here tomorrow. Yep. Or two days. Yep. Right? So you have so much more control, uh, even over an Amazon because you get to pick the brand you want, when you want it, and how much you want it. You want to pay for it. Did I answer your question? Yes, exactly. I like that. So the other funny thing. Okay.

[00:18:17] So my biggest pet peeve, and I've talked about this on the show multiple times, is that when you work with the traditional delivery system of, of dental supplies from one of the, from the conventional suppliers, they were big. They were big suppliers. They, they typically warehouse the product. They were big suppliers. So if you're ordering from one of the big guys, you're typically ordering from their warehouse, from there. And, and you are a lot of times interacting with a rep. I mean, you can order.

[00:18:47] A lot of them will have a website you can order from that, that sort of skips the rep, which, I mean, I even found that in the past years. There's, I don't personally really want to deal with a rep. But interestingly, like my team likes to deal with the rep more than I did in any case. So you could do that. But there was always this thing where the, the rep sort of would tell you, well, you're getting our best price. You're, you're extra special doctor. You're getting our, our best price. And the story was there was, you, you kind of just had to take their word that, that that was the best price.

[00:19:17] The funny thing is, is that their best price might not be the best price. Their best price was their best price. And you just kind of, you kind of hope for the best. And, and partly you felt obliged because of the relationship with another human being that you deal with on a regular basis that you're not going to, you know, it's awkward to try and undercut and see what they're doing. Well, net 32 sort of takes that awkwardness away where you're, you're comparing a bunch of different places offering the same product, their prices and their shipping and all that stuff.

[00:19:47] And, and it's inter, you interact with it all on one, in one place, which is net 32. I love that so much. Like, and is that kind of the model that you felt like was starting to fall apart in, with conventional dental supply companies? Yes, because you can't negotiate with a keyboard. That's right.

[00:20:06] And, and I will, you know, I'll speak for the best of the people that I've worked with, which are very good salespeople and actually really good humans, really good people. And when they're looking at, again, I'm talking about the top level, there's just like in any industry, there are some people who are just shysters and they exist. Right. And it all walks of life, but at the best level and the most ethical level, if I look you in the eye, right.

[00:20:35] And I tell you, I'm giving you my best price. I actually am. I'm giving you the price that I'm allowed to go to my basement level price. The problem is, and where those folks got exposed and are continuing to get exposed is their best price isn't the best price that you can actually get that product for. That's exactly right.

[00:20:58] That's, and that's as a owner of a small practice that, that doesn't have the muscle of a DSL or whatever to come in and grab you by the lapels and shake you down for the best price. That always felt like, I just felt like you just kind of had to take their word for it. You couldn't, it was, it was hard to compare.

[00:21:20] And then if you were going to compare and go, you know, if you're going to go from one of the big guys, look at another big site, the website oftentimes didn't have their, their best price. You'd only really find the best price from your rep. So you didn't have a basis for comparison unless you were literally working with two of these companies with two different reps. All of a sudden there's some time that, that it takes to really get to the bottom of that stuff.

[00:21:43] And still, you still feel like the jerk for being the one who's trying to figure out if they're really, and I mean, part of it is just, there's just a lot of inefficiency. And, and that's why, that's one of the reasons I really like using Net32 because you just go to one place and, and you guys kind of just list all that stuff out. So you don't have to play around with it. Yeah.

[00:22:02] I, I, I'm wondering if when Net32 came around, I just wonder like, if that was the whole, I feel like Net32 was like listening to Dendis complain about exactly what I'm talking about, because it really is. It's the exact opposite of the experience that I got frustrated with is what it comes down to. Well, it makes sense. It was started by a dentist in the late nineties. Okay. There you go. There you go. That's interesting. I didn't know that was the whole, that was the whole purpose. Yep. When I, okay.

[00:22:28] So when I first started practicing dentistry, it should be 1990, 1997. So my, I, I practiced with my dad and my dad used a company for supplies called Mir, Mir Dental. Yeah. Which was, I mean, they're heavy in Midwest. Yep. He had it. Exactly. He had a, he had a rep that would come in and it wasn't long before Mir got in, and it was really funny. The, the, the, one of the reasons he liked Mir so much was because their service technicians were the people that he knew.

[00:22:57] And, and he would, you're, you're smiling. You know, all this story is like every dental office dealt with. It was, it was, you'd almost choose to buy your supplies from someone just because the person that was going to come help you get back up running when your compressor goes down or whatever was kind of with that company. And, and there's, there's a weird like connection you had that then they got kind of eaten up by shine. Actually, it was Sullivan shine. Like actually they got eaten by Sullivan and then it became Sullivan shine.

[00:23:25] And then it became, so like, like part of this is as a dentist, you can see that the companies that I got used to working with, and then all of a sudden your, your, your service rep got shifted to another company. And you're, you know, the, you bought supplies from one place and, but God, you're the service guy, you know, and like is with these. And all of a sudden it got really confusing and it got really, and, and, and you sort of, I know dentists like me that are not, they're not looking at spreadsheets and not looking at, they, they sort of wash their hands of it.

[00:23:55] And we're hopefully taking their word of the people that they've worked with. And, and I just feel like, as you said, in the, in the late 2000s, you know, 2010s, the, the bigger group companies took this. I remember I had friends who did buying clubs that were like literally, this was before the internet was even really a thing. And they had buying clubs where it was, it was a phone call. And I never really understood. I'm like, why would someone give a buying club? And then who do they deliver this to? And how do they, I never understood why you could get a better price.

[00:24:23] Well, then all of a sudden when these group practices came together and they, they basically were buying enough volume between practices that it, it got the big suppliers attention real good. And all of a sudden you could tell that their margins were, I mean, the, the, their prices were going to be significantly different. And you felt like as just a small mom and pop operation, you weren't going to get that advantage. And, and, and so for a while you felt like, geez, you know, these guys are, are, are more profitable for the sheer fact that,

[00:24:53] on some level their supplies are a lot less expensive and I'd like a piece of that, but I'm just a tiny little office. And so, so essentially I feel like when I use it, Net32 kind of gives me a little bit of that muscle that I didn't have before for that same reason. Is that, is that part of the, the concept that when, when it was brought together and frankly, when you came over to Net32, you saw that, you know, for the, for the regular practices? That's right. That's exactly right.

[00:25:20] It's, it's about empowering the clinician, the consumer, the small business owner to really have control over the things that they've been told they don't need control over. Yes, exactly. Shouldn't want control over. Yep, exactly. Or we're scared into not worrying about it. Yeah. Hey, don't worry about it because when your compressor breaks down, I'm going to have a guy here. Yes, yes. Later this afternoon or tomorrow.

[00:25:49] And the truth of the matter is even that is failing now. Yeah. Because they can't keep up. Yep. And we're starting to see emerging field service companies. Yes. Who can handle it. Yeah. Just fine. And they're not connected to a supply house. That's right. Which is freaking wild when you think about that. Because like, I've been doing this for 30 years and I'm like, of course they're connected to a supply house because that's how it's always been.

[00:26:17] And you're saying essentially that the individual parts of that system that used to be the normal are breaking up to be more efficient and more, you know, get the – I sort of love all of it. I love everything about that. Yeah. So, George, your role at Net32 is interesting too because you get to – you essentially are the guy who's bringing in new partners to work with Net32.

[00:26:40] And I'm curious about a lot of that because you told me, and I love this, when you go to a trade show, a dental meeting, your calendar is full start to finish because you're constantly looking for new partners to bring on. And I'm assuming that not only small supply houses but maybe manufacturers that are used to having to deal with distributors, stuff like that. Tell me, like, what's your job like on a regular basis with regard to that stuff?

[00:27:07] Yeah, I mean, it's really interesting. When I first started here a little over a year ago, about a year and just under two months ago, it was my charge and our team's charge to sort of reach out to folks and engage them in conversations. And there's various levels of, you know, oh, we've heard a Net32. We haven't heard a Net32. You know, many think that we actually stock product. We don't. Exactly.

[00:27:37] Many thought of us as a competitor. We're not. I didn't know. Yeah. Yeah. And it's really just about, for me, it's about sort of making an impact on the industry through my connections, through the folks that I know, and really getting the word out that, you know, Net32 may not be exactly what you think it is. And there are opportunities everywhere for us to partner. Everywhere. Everywhere. Yeah.

[00:28:06] And it's just a matter of kind of me having enough face-to-face meetings with folks to really get that word out. I'm one of two dental people, dental industry professionals that have been hired by the company. The first one was hired four months before me, and that's our CEO, Andreas Frank, who came to us from Dentsply Serona, and then myself.

[00:28:33] And so that sort of industry, that connection to dental, it's amazing because 1997, you mentioned 1997, is when Dr. Cassidy started Net32. Okay. Okay. And for this whole time, it's been run by a dentist and his family and a whole bunch of smart, really, really smart developers and sort of engineers and technology folks, I guess, is what I would call them. Yeah.

[00:29:00] And my job is to expand our catalog like I talked about, and it's so exciting because where it started as me sort of reaching out to people in my team, cold calling people, and now it's like we're getting – we have a request sheet where people are applying to be on the platform that it's hundreds deep. Mm-hmm.

[00:29:29] CDA in Anaheim coming up. Both from the lab and dental side, we have pretty much an almost packed calendar for those two and a half, three days that were out there. Okay. The first trade show I went to was the CDA. Okay. And I started, again, a little over a year ago. Mm-hmm. And I think I had maybe five scheduled appointments. Yeah. Maybe five. Yeah.

[00:29:57] The rest was all just me buzzing around to – just with the dentist, just walking up to booths and introducing myself. So that's kind of the dynamic. Did I answer your question? I mean, clearly, clearly Net32 is – well, okay. So first off, they're leaning into – Net32 is leaning into the model that's just not working anymore. It isn't that – as you said, it's crumbling, but it's not – in a lot of ways, particularly for a lot of independent practices like my own, it's not working anymore the way that it was.

[00:30:26] And Net32 is just leaning into that. It's not like you're trying to break the model. The model is already kind of broken, and you guys are saying, hey, we can do this better. But then also, part of this is that the technology has developed since it was started in the late 90s in such a way that it makes this doable. And you gain a ton of efficiency and, honestly, just price advantage by just having technology that does a lot of that heavy lifting for you that was done by having a lot of human beings on board before. Is that essentially it?

[00:30:56] Yes. Yes. That's so good. Yeah. So good. Yeah. I just think – I think it's fantastic. I think that – I think it's cool that – I'm going to throw this out to people on Facebook or people listening if you have any questions or comments. I think that this has helped me explain a little bit what Net32 is, what it does. Net32 – there is no giant Net32 warehouse in Metro Detroit that all the packages that are coming to me – that's not how this works.

[00:31:22] This is just a smarter, more efficient distribution system of existing distributors and, frankly, probably direct products. It is interesting that you say, too, you are connected with lab stuff, too. So you've got labs and dental offices that are working. That's very cool. This is all very cool. And I'm sure that, like, literally in a year, you'll have even more stuff that's going on because, clearly, this model is taking off. So, George, I appreciate your time.

[00:31:48] I think this has been helpful for people that might have heard me talking about Net32 but maybe didn't quite understand what it was about. So, if you have any questions or comments, listeners, for George or anyone over at Net32, feel free to leave them in the Facebook group or just message me and I'll get them to them. But, George, you are a font of knowledge about this stuff. I really appreciate it. Well, it's been a pleasure. I love this conversation. And I would tell your listeners, stay tuned because the best is yet to come. Nice. Very good. Thanks a ton, George.

[00:32:18] We'll talk to you again soon. Thanks, Alan.