Amazon poses threat to dental suppliers in the USA
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- Published: Friday, 08 December 2017 11:02
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Morgan Stanley has warned dental investors that "Amazon is here," sending shares of dental supply distributors Henry Schein and Patterson Cos tumbling by more than 4% after after analyst Steve Beuchaw said that Amazon is buying supplies directly from manufacturer Dentsply Sirona.
Shares of dental supply distibutors sank after Morgan Stanley issued a stark warning to investors: "Amazon is here." The two dental supply companies both closed down more than 4%. "We have new evidence that Amazon is accessing critical products from Dentsply Sirona," wrote Beuchaw. "While Amazon makes up a small share of average total spending both backward (4%) and forward looking (5%), it was used by 34% of practitioners in our survey in the last year suggesting it is making inroads into many practices."
The analyst downgraded both suppliers to underweight from equal weight. Shares of Henry Schein fell 5 percent while shares of Patterson Companies slipped 4.7 percent. "We are unaware of any market-leading dental manufacturer that has a direct relationship with Amazon," a Henry Schein spokesperson said. "We believe that at this time Amazon is a minor player in the dental consumables markets, with an insignificant market penetration."
For its part, Amazon offered the following statement for this story: "We don't comment on individual relationships, but Amazon Business customers have a choice of products from numerous dental suppliers and manufacturers." Amazon indicates a majority of the dental products on its business-to-business portal are sourced directly from manufacturers, with the other 50% sourced by third parties, wrote the analyst in November, allowing a distributor of Dentsply Sirona products to resell via Amazon.
GDPUK also notes to UK dentists that Amazon Business works a little differently to the Amazon retail offering, it offers monthly terms for invoices, multiple logins and supplies many office, technology, janitorial and staffroom needs for dental practices, logistics chains in place.
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