Idexx Moving to Direct Sales Across U.S.
Distributors such as MWI Veterinary Supply stand to lose millions of dollars in business.
Idexx Laboratories Inc., a manufacturer of diagnostic and information technology-based products and services, will drop its U.S. distributor partners and sell directly to all customers beginning Jan. 1, 2015.
The change will affect companies such as MWI Veterinary Supply Inc. The Boise, Idaho, distributor disclosed July 31 in its third-quarter financial report that the Idexx account is responsible for about 3.4 percent of MWI’s multibillion-dollar annual revenue.
MWI President and CEO Jim Cleary tried to allay any fears, saying the company is “strategically well-positioned with competitive diagnostic products, which we have marketed and sold since January 2013.”
MWI previously announced the layoff of 5 percent of its U.S. workforce and the shuttering of warehouses in Mauston, Wis., and Phoenix.
Jonathan Ayers, Idexx’s chairman and CEO, called the direct sales of U.S. Companion Animal Group diagnostics “a natural evolution of our business model.”
“Under this approach, we intend to take orders, ship product, invoice and receive payment, and recognize revenue for all rapid assay test kits and instrument consumables in the U.S., aligning with our direct model for instruments, reference lab services and other [Companion Animal Group] products and services,” Ayers said.
Idexx introduced a customer-centric sales model in 2013—one that Ayers said has been “highly effective and is gaining momentum each new quarter.”
“The change to an all-direct product distribution approach will allow a significant expansion in our direct sales coverage and capacity, including an estimated 40 percent increase in the veterinary diagnostic consultant field sales role and a 60 percent increase in customer field call frequency,” he said.
“With this increase, we will be much better equipped to support our U.S. veterinary customers’ growth in the use of Idexx diagnostics to provide the best medical care for their patients and clients.”
Idexx also does business with distributors Henry Schein Animal Health, Midwest Veterinary Supply, Victor Medical Co., Patterson Veterinary Supply and Hawaii Mega-Cor Inc.
The Westbrook, Maine, company in July reported second-quarter revenue of $390 million, an 11 percent jump from the same period a year earlier.