FrownDirect Club — JNG Advisors

SmileDirectClub Shuts Down

While the shut down of operations by SmileDirectClub will not have a direct effect on your practice, it can teach us about a few things in the business of dentistry:

1) Initial excitement never lasts. SmileDirectClub hit its peak in 2019 with an IPO value of $8.9b. Based on the chart below, the demand for online clear aligner products is waning after initial excitement from the public and/or the public wants a better service product that devices arriving in the mail. If you offer aligner options to your clients, ensure that you provide an excellent patient experience and consider aligner income/profit as a smaller secondary income stream to your regular dentistry.

2) Sales are not everything. Even though SmileDirectClub was averaging $150m in quarterly sales, they also averaged a $60m quarterly loss. For any business (including your practice and your buddy’s practice), don’t get too excited by the sales numbers. Look to the net profit because that is what you can take home.

3) Choose your business partners wisely. The shut down has left SmileDirectClub patients with:

No more aligners as all aligner shipments have ceased.
No 60-day check-ins as the treatment platform does not exist.
No Lifetime Guarantee, effective immediately.

Be sure to vet all your suppliers and partners to ensure that they will stand behind their promises and make sure you have plans in place to stand behind your dentistry.

Since every practice operates differently, please schedule a consultation with JNG Advisors today with specific questions you may have about aligners, suppliers, profit or anything else on your mind.