Your Dental Practice Is Producing More. So Why Is Profit Getting Squeezed?

How Private Practice Owners Can Fight Rising Costs, Reduce Overhead, and Get the Purchasing Advantages of Larger Dental Groups

You can have a great year in your dental practice, produce more dentistry, collect more money, and still feel like you're not making the progress you should be. You look at your numbers and see that revenue is growing, but somehow the money left over at the end of the month doesn't seem to reflect all that hard work. Supplies are more expensive. Lab fees keep climbing. Equipment costs more than it used to. Technology subscriptions are piling up, and payroll certainly isn't getting any cheaper. Before you know it, you're working harder, producing more, and wondering why profitability feels like it's moving in the wrong direction.

This is becoming a familiar frustration for private practice owners. We've been through years of significant disruption, from staffing shortages and inflation to changes in supply chains and vendor pricing. Many of those pressures are outside our control, but that doesn't mean we have to accept whatever expenses show up on our profit and loss statement. One of the biggest opportunities for improving dental practice profitability is not necessarily producing more dentistry. Sometimes it's simply becoming a smarter buyer.

For years, larger dental groups have enjoyed purchasing advantages that independent practice owners typically haven't had access to. When hundreds of practices purchase supplies, equipment, lab services, and technology through the same relationships, they have significantly more negotiating power than a single practice placing orders on its own. The good news is that private practice owners are beginning to gain access to some of those same advantages without necessarily selling their practices or joining a dental group.

The Hidden Cost of Being an Independent Dental Practice

One of the challenges of private practice ownership is that we often make purchasing decisions based on convenience rather than strategy. Your assistant orders supplies from the vendor they've always used. Your office manager renews a subscription because the team is familiar with it. You buy equipment from the representative you've worked with for years because you trust them. There's nothing inherently wrong with any of that, but when nobody is regularly comparing pricing or evaluating alternatives, expenses have a way of creeping upward without anyone noticing.

Dental supplies are a perfect example. In a recent conversation with Jeff Cellucci from MB2 Dental, he explained that many private practices are spending somewhere around 7% to 8% of collections on supplies. He believes practices can often bring that number down to approximately 5% or less through better pricing, improved ordering practices, and smarter product selection. Those aren't universal benchmarks, and every practice has different clinical needs, but they illustrate how much opportunity can exist in a category many owners rarely examine closely.

Consider a dental practice collecting $2 million annually. At 8% of collections, that practice is spending $160,000 on supplies. Bring that down to 5%, and the expense becomes $100,000. That's a $60,000 annual difference without producing another crown, adding another patient, or extending the clinical schedule.

The savings won't necessarily be that dramatic in every practice, and lowering expenses should never come at the expense of clinical quality. However, even a one-percentage-point reduction in supply costs for that same practice represents $20,000 annually. That money goes directly toward improving profitability, assuming the savings don't create additional costs elsewhere. Compare that with how much additional production you might need to generate the same improvement in profit, and it becomes clear why purchasing deserves more attention.

Better Purchasing Is About More Than Negotiating Lower Prices

When dentists think about lowering supply expenses, they often picture calling their supply representative and asking for a better discount. That's certainly one approach, but it overlooks several other ways practices waste money. Ordering frequency, inventory management, shipping fees, product selection, and purchasing habits can all influence what a practice ultimately spends.

Think about how ordering happens in your office. Does someone place one organized order each week or month, or are people constantly discovering that something is missing and placing additional orders? Are you carrying too much inventory because nobody knows exactly what's already on the shelves? Are you paying shipping charges that could have been avoided with more organized purchasing? Does your team automatically reorder the same brand of every product without considering whether a clinically equivalent alternative might work just as well?

These are small decisions individually, but across hundreds of purchases throughout the year, they can make a meaningful difference. In my own practice, we've benefited from having someone review what we're ordering and recommend lower-cost alternatives. Sometimes that means trying a different brand of a product we've used for years. If the team tries it and it performs just as well, there's no reason to keep paying more simply because that's what we've always purchased.

I remember reaching a point where I told the person helping us with purchasing that she didn't need to keep asking my team about every small product substitution. For appropriate items where quality and clinical preferences weren't an issue, we could make the switch and move forward. Those decisions helped us bring our supply costs well below 5% of collections.

The lesson isn't that you should blindly substitute cheaper products. It's that purchasing needs to become a managed system rather than a collection of habits. Someone should be responsible for monitoring costs, comparing alternatives, controlling inventory, and identifying opportunities for improvement. Just like scheduling, collections, and case acceptance, purchasing deserves clear ownership and measurable results.

How Independent Dentists Can Get Group-Level Purchasing Power

This is where group purchasing organizations, commonly called GPOs, become interesting. A GPO brings together purchasing volume across multiple businesses to negotiate pricing and vendor arrangements that individual practices may struggle to obtain on their own. The concept isn't new, but it's becoming increasingly relevant as private practice owners look for ways to protect profitability without giving up ownership or clinical autonomy.

One example is Carabelli Club, a program developed through MB2 Dental's vendor relationships. MB2 is a dental partnership organization that has grown to more than 800 practices, according to Jeff Cellucci, and has spent years building purchasing relationships across supplies, labs, equipment, and technology. Carabelli Club extends access to many of those relationships to independent dental practices that aren't necessarily interested in joining MB2.

The important distinction is that joining a purchasing program is not the same thing as selling or partnering your dental practice. You remain the owner, continue making your own clinical and business decisions, and choose which vendor relationships make sense for your office. You're simply gaining access to purchasing opportunities that may otherwise be difficult to negotiate independently.

During our conversation, Jeff described how Carabelli Club works with more than 80 vendors across different categories. Beyond supply pricing, the program includes access to an ordering platform called Dentira, which allows practices to compare products and pricing from multiple vendors in one place. Instead of logging into several different websites or contacting multiple representatives, the person responsible for ordering can use one platform, build shopping lists, and compare options more efficiently.

That convenience has value beyond the actual product discounts. If your office manager or assistant is spending hours managing orders, searching different vendor websites, or tracking down pricing, those are hours they aren't spending on other responsibilities. A more organized purchasing process can reduce both direct expenses and administrative workload.

Of course, not every purchasing organization offers the same vendors, pricing, tools, or membership terms. Some programs may produce substantial savings for a particular practice, while others may offer relatively little benefit depending on the products and services that practice already uses. The point is to compare the actual economics rather than assume a membership will automatically save money.

Don't Overlook Labs, Equipment, and Technology

Supplies are an obvious starting point because they're purchased regularly, but some of the largest opportunities may be in categories owners evaluate far less frequently. Lab expenses, equipment purchases, scanners, clinical technology, patient communication platforms, and other recurring subscriptions can represent significant spending over the course of a year.

For example, Jeff shared that some preferred laboratory relationships available through Carabelli Club offer full-zirconia crowns at pricing around $58. That figure was an example discussed in our conversation, not a guarantee that every practice will receive that price for every case. Still, it illustrates why reviewing lab costs can be worthwhile. If a practice is paying substantially more per crown, even a modest reduction could produce meaningful annual savings depending on case volume.

Lab decisions are also more complicated than simply choosing the cheapest option. Quality, turnaround time, communication, remakes, and the relationship between the doctor and technician all matter. A lower lab fee isn't really a savings if the practice ends up spending more chair time adjusting restorations or dealing with remakes. The goal should be to evaluate whether a different vendor can deliver comparable quality and service at a better overall cost.

Equipment is another area where purchasing leverage can make a difference. I recently had a conversation with a dentist in our mastermind group who was leasing an iTero scanner. When I mentioned that we had purchased ours, he asked why we hadn't leased it. After I showed him what we paid through our purchasing arrangements, he was surprised by the difference. It was a good reminder that two dentists can purchase essentially the same technology under very different financial terms.

Technology subscriptions deserve similar scrutiny. Practices are being offered new software, clinical AI tools, marketing platforms, and patient communication systems constantly. Some of these products are fantastic investments, but others overlap with systems you already have or fail to deliver enough value to justify their recurring expense. Before committing to another monthly payment, ask whether the product solves a meaningful problem, whether the team will actually use it, and whether the expected return justifies the total cost.

The Best Profitability Strategy Looks at Both Sides of the Business

One of the most useful ideas from my conversation with Jeff was the importance of what larger dental organizations call same-store growth. In simple terms, it means measuring how much an existing practice improves from one year to the next without counting revenue from newly acquired or opened locations. For an individual dental practice owner, the concept is straightforward: Is the business you already own becoming more productive and more profitable?

It's easy to get excited about expansion. You might want to add another associate, open a second location, purchase a neighboring practice, or expand your services. Those can all be great opportunities, but they shouldn't distract you from improving the economics of your existing practice. A practice that grows collections by 10% while expenses grow by 15% may be moving backward financially despite looking more successful from the outside.

This is why I encourage owners to look at their profit and loss statements regularly and understand what is happening in each major expense category. Supply costs as a percentage of collections, lab expenses, payroll, facility costs, marketing, and technology should all be evaluated alongside production, collections, and other operating metrics. The goal isn't to squeeze every possible dollar out of the business. It's to understand where money is going and whether those expenses are producing the value you expect.

Better purchasing also complements the operational improvements we focus on through dental practice coaching. If you improve scheduling, case acceptance, team efficiency, and collections while simultaneously controlling unnecessary expenses, those improvements work together. You're producing more value from the hours you already work while keeping more of the revenue the practice generates.

That is a much stronger strategy than relying exclusively on higher production to outrun rising overhead.

Take Control of the Expenses You Can Control

Private practice ownership has always involved financial challenges, and there will continue to be economic pressures that we cannot predict or control. Supply pricing will change. Labor costs will fluctuate. New technology will become available. Vendors will adjust their terms. None of that means independent practice owners are powerless.

Start by reviewing your current supply and lab expenses as a percentage of collections. Look at how purchasing decisions are made, who owns the process, and whether your team is regularly comparing alternatives. Evaluate your larger equipment and technology expenses before renewing contracts or making major purchases. Consider whether a purchasing organization could provide better pricing or simplify the way your practice orders products, but verify the actual savings and membership terms before committing.

Ultimately, the goal is not simply to build a dental practice that produces more money. It's to build a business that keeps more of what it produces, supports a great team, provides excellent patient care, and gives you more freedom and choice as the owner.

Sometimes the next big improvement in profitability doesn't require another patient, another procedure, or another clinical day. It starts with taking a closer look at what you're already spending.