• DVM360_Conference_Charlotte,NC_banner
  • ACVCACVC
  • DVM 360
  • Fetch DVM 360Fetch DVM 360
DVM 360
dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care
dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care
By Role
AssociatesOwnersPractice ManagerStudentsTechnicians
Subscriptions
dvm360 Newsletterdvm360 Magazine
News
All News
Association
Breaking News
Conference Coverage
Education
Equine
FDA
Law & Ethics
Market Trends
Medical
Politics
Products
Recalls
Regulatory
Digital Media
dvm360 LIVE!™
Expert Interviews
The Vet Blast Podcast
Medical World News
Pet Connections
The Dilemma Live
Vet Perspectives™
Weekly Newscast
dvm360 Insights™
Publications
All Publications
dvm360
Firstline
Supplements
Top Recommended Veterinary Products
Vetted
Clinical
All Clinical
Anesthesia
Animal Welfare
Behavior
Cardiology
CBD in Pets
Dentistry
Dermatology
Diabetes
Emergency & Critical Care
Endocrinology
Equine Medicine
Exotic Animal Medicine
Feline Medicine
Gastroenterology
Imaging
Infectious Diseases
Integrative Medicine
Nutrition
Oncology
Ophthalmology
Orthopedics
Pain Management
Parasitology
Pharmacy
Surgery
Toxicology
Urology & Nephrology
Virtual Care
Business
All Business
Business & Personal Finance
Hospital Design
Personnel Management
Practice Finances
Practice Operations
Wellbeing & Lifestyle
Continuing Education
Conferences
Conference Listing
Conference Proceedings
Resources
CBD in Pets
CE Requirements by State
Contests
Veterinary Heroes
Partners
Spotlight Series
Team Meeting in a Box
Toolkit
Top Recommended Veterinary Products
Vet to Vet
  • Contact Us
  • Fetch DVM360 Conference
  • Terms and Conditions
  • Privacy
  • Do Not Sell My Information
  • About Us

© 2023 MJH Life Sciences and dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care. All rights reserved.

Advertisement
By Role
  • Associates
  • Owners
  • Practice Manager
  • Students
  • Technicians
Subscriptions
  • dvm360 Newsletter
  • dvm360 Magazine
  • Contact Us
  • Fetch DVM360 Conference
  • Terms and Conditions
  • Privacy
  • Do Not Sell My Information
  • About Us
  • MJHLS Brand Logo

© 2023 MJH Life Sciences™ and dvm360 | Veterinary News, Veterinarian Insights, Medicine, Pet Care. All rights reserved.

Top 3 ways to price products and services

September 1, 2011
Denise Tumblin, CPA

Top 3 ways to price products and services

1. Price highly shopped services competitively

For price-sensitive services such as vaccinations and elective surgeries, use a competitive price strategy. Compare your fees for these services with other practices in your area. If you can, find out if these clinics provide a similar level of customer care and value. Also consider the other practice's number of doctors, practice hours, and community reputation. I recommend conducting a community survey to gather this market research. (Benchmarks 2011 includes a tool for this; visit dvm360.com/benchmarks2011 to learn more.)

2. Price inventory items based on cost

Advertisement

Here's how to use a cost-based pricing strategy: For a standard dispensed medication, add an average markup of 150 percent to the cost of the medicine, including sales tax and shipping. Also include a dispensing fee of $9 to $13. Compare this total to the amount of your minimum prescription fee. Then charge the client the higher amount. Dispensing fees and minimum prescription charges will vary based on your community's economics.

Mark up heartworm and flea control products and oncology medications 100 percent. If you stock drugs that remain on the shelf for three or more months, use a 200 percent to 275 percent markup to cover your additional carrying costs. Here's an example for a product that costs you $20:

Note: Remember to retain cost savings on bulk drug purchases. You're incurring the costs of maintaining inventory, so don't pass this savings on to the client.

3. Price doctors' services based on value

For services that involve the doctors' time and knowledge, use a value-based pricing strategy. Value-based services include lab procedures, diagnostic imaging, hospitalization, dentistry, and non-elective surgeries. Use the fees listed in Benchmarks 2011: A Study of Well-Managed Practices as a guide for pricing value-based services. Your value-based fees can be higher than any other practice in a community as long as clients receive the value they expect for the price. (To download an interactive spreadsheet, visit dvm360.com/comparefees.)

Review fees quarterly and implement increases as needed. If your fees are lower than the recommendations in published sources, if your costs have increased, if your practice has expanded, or if you've enhanced the level of care you provide, raise your fees. Monitor the quality of your client service and patient care to ensure that both reflect your fee structure.

Next, announce any fee changes in a staff meeting. It's important to get all of your doctors and team members on board with the increases. Make sure to emphasize the medical benefit of raising fees. It gives you the resources necessary to continue to elevate patient care—and focus on how to provide the value your clients desire with the greatest efficiency.

Related Content:

BusinessPractice Finances
Hiring employees in line with your brand
Hiring employees in line with your brand
Thriving when life is hard
Thriving when life is hard
Hospital design expert shares his favorite design element
Hospital design expert shares his favorite design element

Advertisement

Latest News

To refer or to not refer

Advice panel for women interested in the veterinary field

AVMA president set to testify before Congress

New Hawaii-based pet CBD brand launches

View More Latest News
Advertisement