Dsos vs. Ortholabs – who is the stronger player in the whitelabel aligner market?

If you’re a dentist, you’ve probably considered owning a dental practice someday. Opening one’s own practice from scratch used to be the golden ticket at the end of dental school. However, if the last two decades are an indicator, the decision to go solo may not be as ‘glitz and glamour’ as it used to be. According to the latest data from the American Dental Association’s Health Policy Institute, there has been a downward trend in erupting solo owners or practitioners since 1999 when 65% of US dentists ran solo practices. By 2019, this number dwindled to only 50.3%.

With inflation making its nefarious rounds across the globe, providing top-notch services while at the same time, entertaining high volumes of patients isn’t something most dental practice owners can fit into their daily roster. As a result, several different kinds of business models have emerged to make practice ownership a less daunting task. The most popular model today is the concept of dental service organizations (DSOs). Geographically, almost every state in the United States except for two has been seeing growth in DSOs.

This trend of consolidation of individual orthodontic practices has been started in order to help orthodontists navigate uncertain economic times, and provide more learning and professional development opportunities. Most dental practices are now partnering with popular DSOs, some of which are in turn partnered with brand-name aligner groups. This allows the partnered dental practice to acquire resources including aligner services to deliver to their patient base.

On the other hand, some dental practices rely on an in-house laboratory to fulfil the aligner needs of their patients. Even better, most dental offices recognize the expertise and skill required to fabricate aligners and to make adjustments, which is often why they outsource to a third-party Ortholab. This way, their supply chain does not suffer and the quality of the products they supply is also top-notch.

Whether you’re delivering products with the help of a local lab or a well-known DSO, it is no secret that the right manufacturing partner can make all the difference. To introduce a new aligner service in your clinic, you’ll be faced with the decision to either use white labelling, private labelling, or custom manufacturing. We investigate which is leading the White Label aligner market today – DSOs or Ortholabs.

What is white labelling?

White labelling is the practice by which third-party manufacturers produce identical products to distribute on a local or wider scale. In reference to the aligner business, white labelling is done when the aligners are produced by a company and delivered to the patients by the dental profession, who in this case is the partnered retailer to the white label company.

Many dental practice owners today are switching to white labelling aligners because of various attractive benefits. First, aligners that are outsourced to an aligner-specific or aligner-specialized company allow dentists to receive fast and cheap products that can be then distributed to the patients, as needed. White label products are also best suited for entrepreneurial dentists who want to jump in on trending product categories without having to commit to significant upfront investments.

Most white labelling packages, however, may not include customized or personalized aligners, the result being a generic product that does not vary from what other retailers are selling. Furthermore, the assigned clinician may not have much say on the aligners’ materials, ingredients, features, or appearance. To overcome creative limitations, dentists can modify the way their white labelling contracts with third-party aligner providers work.

In a new concept known as private labelling, the dental practitioner is able to partner with companies to create its own “line” of products that are sold with the company’s branding. Today, the companies that provide these white labelling services are on tap with a variety of other work ethics. DSOs and ortholabs are some of the more popular players in the white label aligner market today.

What are DSOs?

The three-year-old pandemic has not been kind to service industries including dentistry. With the abundance of financial, clinical, and personal challenges fostered by this life-changing event, doctors around the world are now considering their options to stay relevant and competitive in an environment that is brutally evolving. This is the time to stay one step ahead of the curve, be it through collaborative networking, managing financial capital, garnering administrative support, or embracing top-of-the-line technology and skills. DSOs are now extending dentists an offer they cannot refuse.

According to the Association of Dental Support Organizations (ADSO), a Dental Support Organisation (DSO) is an organization that ‘contracts with dental practices to provide critical business management and support, including non-clinical operations’. At the fundamental baseline, DSOs offer services like accounting, IT, HR, payroll, marketing, capital and financing, risk management, and general practice support to the dentist on a day-to-day basis.

By handing over these crucial yet time-consuming tasks to a third-party company, dentists are able to focus on providing vital and high-quality clinical services to their patients. This, coming full circle, also includes clear aligner services. DSOs partnered with private dental practitioners are also hubs for white labelling aligners. In fact, some DSOs have also launched their very own aligner brands. Take a look at DSO West Dental & Orthodontics which introduced its aligner brand, ClearArc, in 2020 in the US aligner market. Theoretically, private dentists can also make their own aligners if partnered with the right DSO.

What are Ortholabs?

Another fascinating service to appease the “instant result” nature of today’s orthodontic world is an Ortholab. These full-service orthodontic laboratories can fabricate any appliance that your dental practice needs. From retainers to aligners, these labs fabricate appliances with a wide selection of colours, patterns, and designs. All you are expected to do is send these Ortholabs- which typically function entirely online- scans, impressions, or models of your patient’s malocclusion. With a quick turnaround time, they deliver your aligners to you within a week.

Which is the leading player – DSOs or Ortholabs?

Currently, DSOs are ruling the white label aligner business. Although the exact number of DSOs is difficult to calculate, figures suggest that the top DSOs in the US represent nearly 4,000 locations. Of the 10 largest DSOs in the US, Heartland Dental holds the number one spot, just having added 37 practices in 2021. In 2022, they collaborated on opening 100 DeNovos practices and affiliated with more than 100 dental practices across the US.

Aspen Group is another top-selling DSO that added more than 200 practices in the last year. Western Dental was also able to add multiple affiliates to its portfolio and is expected to be among the top five largest DSOs this year.

Perhaps it is the wider scope of control or the wider range of services provided by the DSOs that have made them the go-to white labelling provider for aligner services for most dentists. Ortholabs, although, up and coming in recent years, have yet to make a noteworthy presence in today’s clear aligner market. The lack of customized touch may deter dentists from associating with local labs to do their bidding on clear aligners. Whatever may be the case, the aligner market is far from slowing down and we may witness the growth of some powerful business models in the future.