After my post about Hearing Planet Review, see http://www.centuryhearingaids.com/blog/hearing-planet-how-does-hearing-planet-work   I was contacted by the Managing Director of Hearing Planet,  who had some disagreement with the "details" of my story.   Below is the discussion with the Managing Director of Hearing Planet. I had to remind the managing director of a couple things: 1. Blogs are protected by the first amendment,  2.  Where he accused me of making false, misleading or slanderous statements about competitors,  I had to show him in the story that when I suggested a specific detail about pricing, that I clearly say the figures and some details I offer are an "educated guess". I ended up making a few minor corrections to my story,  but overall,  there was no argument about the pricing, I made no corrections to my educated guess of a 10 times markup, and that essentially Hearing Planet sells at MSRP, and that they sell direct because they own the entire distribution channel. There is a saying in Politics, Don't pick a target smaller than you...you only make yourself look smaller.    I wonder if this applies.....you decide,  read the story yourself.   Dear Mr. Stoddard, I read with great interest your blog entry regarding HearingPlanet (http://www.centuryhearingaids.com/blog/hearing-planet-how-does-hearing-planet-work).  I appreciate the fact that you stated our ownership structure correctly.  Most believe we are owned by Phonak.  We are in fact owned by Sonova. There are however a number of inaccuracies that need to be corrected as follows: 1.     HearingPlanet does not sell at MSRP since to my knowledge most if not all manufacturers do not publish MSRP.  Our prices are based on what we believe is a fair price given the technology and level of service we provide.  We are in fact cheaper than most brick and mortar clinics (like Connect Hearing for example).  Please remove this statement from your blog or provide documentation regarding our prices matching MSRP from the manufacturers. 2.     I am not sure how you get 5 to 10 times markup.  Based on our wholesale costs, including fitting fees that we pay to our providers, none of our hearing aids are sold at even close to 5 times markup.  Please remove this statement from your blog. 3.     We do not sell hearing aids before there is hearing evaluation appointment at one of our Endorsed Local Clinics.  In addition, we do not prescribe which hearing aid is appropriate for the patient.  This is done by the local hearing professional. Therefore your statement “Once a sale is made, then they offer the private practice audiologist $500.00 to fit the hearing aid” is incorrect.  Please revise this statement so that it is factually correct. 4.     Your statement that  “my guess is that the sales reps at Hearing Planet are spiffed to steer you towards Phonak” is incorrect.  Please remove this statement. I trust you will modify or remove this comments at your earliest convenience and certainly by close of business on December 29, 2014. Should you have any questions or if I can clarify any points please do not hesitate to reach out to me.  My contact information is below.. Best regards and happy holiday, Bill ---------------------------------------- William H. Brownie Managing Director HearingPlanet Sonova e-HearingCare 100 Westwood Place Suite 400 Brentwood, TN 37027 Direct Line: 615.724.1405 Fax Line: 615.248.5903

Century Hearing Aids Response

Bill, thank you for your interest in our Blog.   1.  Blogs are protected by the first amendment.    "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." 2. Phonak prices to the VA are public information.    If you sell to the VA at around $300 then through Hearing Planet $1500 and up...from there its just simple math to get to HearingPlanet prices.   3.  I stated in the blog,  "that is only one mans guess" and "educated guess"  Which means this is an opinion based on our research.    I do not work for Sonova,  but I have read your annual reports.  I have known people that have work for Sonova.  I know audiologists that use Hearingplanet for leads.   I know audiologists that buy from Phonak.  A great deal of information from Audiologyonline.com.. And there are the buying clubs which provide a plethora of information.  4.  You are correct, you do not sell hearing aids directly from hearingplanet.com  I have admended this, to "Once you decide on a hearing aid, you are referred to a "audiologist professional partners or to one of our own retail clinics for a face-to-face consultations"  where the audiologist professional partners or retail clinic is paid $500.00 to fit the hearing aid for servicing the patient for 3 to 5 years.  By the way, out of all the audiologists in the US, their are only 14% independent audiologists still standing today, An Independent audiologist is a business that is not owned by a corporate hearing aid manufacturer.   So there is a more than a good chance that Sonova owns the audiologist office you are referred to. As an example,  Sonova owns and Hearing Planet refers customers to Island Hearing Aid Stores and iHear Hearing Aid Stores.  Sonova also owns and Hearing Planet refers customers to Connect Hearing - an audiologist professional partner/retail clinic. 5. Your statement that  “my guess is that the sales reps at Hearing Planet are spiffed to steer you towards Phonak” is incorrect.      Again this was an educated guess, so I went back to annual reports, the buying group audiologists and learned more,  and changed to:  What is odd is, although Hearing Planet is owned by Sonova - which also owns Phonak, Hearing Planet also sells or refers competitors products like Rexton, Siemens, Widex, Oticon, and Starkey hearing aids.     Take another industry, like cars...have you ever seen a Ford dealership, sell new Chevrolet's in the same lot (used yes) but new?  My guess is even though they sell competitor models,  Hearing Planet, which is owned by Sonova,  is that the sales reps at Hearing Planet might be spiffed to steer you towards Phonak products - because there is more margin in selling Phonak and Unitron - but that is only one mans guess.  I am not sure if that is the way their commission structure works but I can tell you that Phonak and Unitron are listed first on hearingplanet.com, (definitely not alphabetic) which is a strategy to get most of the customers  - google uses same technique with #1 ranking and SEO - with google organic traffic, the first two keyword listings get the bulk of all the traffic - same way it used to work in yellowpages.   Another odd thing is that all the prices of comparable models are so close that it suggests something about the prices from all the manufacturers are riding all together in the same hot air balloon. Again, I appreciate your interest in our blog.  And want to remind you that blogs are protected under the first amendment.   Sincerely, Jon Stoddard   Hearing Planet's Reply Hi Jon, Thanks for your response. I understand the First Amendment, however, it does not allow businesses to make false, misleading or slanderous statements about competitors. I still disagree with your up to 10 times mark up.  As you know different technology levels have different wholesale prices.  Assuming your pricing comparison to the VA, none of our Phonak models are priced 10x the VA cost.  Please revise this in your post. Also, who is Island Hearing and iHear?  I don’t find them in our network. Thanks, Bill ---------------------------------------- William H. Brownie Managing Director HearingPlanet Sonova e-HearingCare 100 Westwood Place Suite 400 Brentwood, TN 37027 Direct Line: 615.724.1405 Fax Line: 615.248.5903 My Reply Bill "it does not allow businesses to make false, misleading or slanderous statements about competitors" True, but if your costs, and prices our not public, then its an "educated guess", as I state in the blog post.    What we know as fact is the price to VA.  That is published information that the Gov requires for all vendors.   If you sell your 90s,  V or Qs,  to the VA for $368 to $382.   They are preferred status, GOV gets great prices, but You still need to make a profit selling to VA,  lets say the markup is only $100. That puts the Vs and Qs at COGs at $268 to $282 per unit.  multiply that by 10 is $2680 to  $2820,  the price listed on hearingplanet.com is $2799 to $2899  that is 10 times.     That matches up to the prices you list on hearingplanet.com   per unit. On the ihear and island, check out Crunchbase  http://www.crunchbase.com/organization/sonova-holding     Hearing Planet's Response Hi Jon, HearingPlanet does not get VA pricing so the 10 times is not correct. Also, I am guessing by your Crunchbase reference that you mean InSound not Island.  Correct?  Insound was the company that Sonova bought that manufactured Lyric.  HearingPlanet does not sell Lyric so you need to remove that from the blog. iHear is a company started by the founder of InSound.  iHear is not affiliated with Sonova. Please remove that as well. Thanks, Bill ---------------------------------------- William H. Brownie Managing Director HearingPlanet Sonova e-HearingCare 100 Westwood Place Suite 400 Brentwood, TN 37027 Direct Line: 615.724.1405 Fax Line: 615.248.5903     My Response Bill, 1.  It does not matter if HearingPlanet.com does not get their hearing aids at VA prices... Sonova owns phonak and HearingPlanet.com   If Sonova owns Phonak and phonak "sells" their hearing aids to Hearingplanet.com,and a customer bought their hearing aids from a phonak "retail clinics" say island or connect,  the money stays in the Sonova family.  Margin or markup is what some company, independent of Sonova, would pay for the hearing aids.  The only verifiable and factual prices that can be used for reference are VA prices and Hearingplanet prices.   Since we know what the VA prices are, and what hearingplanet prices are, and we know private companies are in the business or stay in business because of profit,  its simple math to determine a range of COG   2. Crunchbase Sonova Holding AG engages in the design, development, manufacture, distribution, and service of hearing systems and related products for adults and children with hearing impairment. It also provides wireless communication systems for audiological applications and for use in the fields of tourism, studio recording, and safety, as well as offers professional solutions in the field of hearing protection. The company provides its products under the Phonak, Unitron Hearing, Phonak Communications, Lappere, Island Hearing, I-hear, Connect Hearing, Argosy, and Acoustic Implants brands. It sells its products through its distribution network and independent distributors in Europe, the Americas, the Asia/Pacific, and Africa. The company was formerly known as Phonak Holding AG and changed its name to Sonova Holding AG in August 2007. Sonova Holding AG is headquartered in Stafa, Switzerland. - See more at: http://www.crunchbase.com/organization/sonova-holding#sthash.WYVt98LZ.dpuf 3.  My blog says,   Sonova owns and Hearing Planet refers customers to Island Hearing Aid Stores.  Sonova also owns and Hearing Planet refers customers to Connect Hearing - an audiologist professional partner/retail clinic. See Sonova 2013 Annual report for Island acquisition 4. Please read the blog again,  it says,  Hearing Planet - is owned by Sonova - which also owns Phonak and Unitron and Lyric and Advanced Bionics and Acoustic Implants.   Hearing Planet's Response   Hi Jon, Island Hearing was in Canada.  It is now Connect Hearing Canada,  HearingPlanet does not operate in Canada so we don’t refer to them.  Remove this from the blog. I actually don’t know where Ihear is but it’s not in the US so we don’t refer there either. Thanks, Bill ---------------------------------------- William H. Brownie Managing Director HearingPlanet Sonova e-HearingCare 100 Westwood Place Suite 400 Brentwood, TN 37027 Direct Line: 615.724.1405 Fax Line: 615.248.5903 My Reply Bill,  Done  Changed to As an example,  Sonova owns and Hearing Planet refers customers to Connect Hearing - an audiologist professional partner/retail clinic with over 300 locations in the US. Hearing Planet's Response Jon Thanks. Bill. ---------------------------------------- William H. Brownie Managing Director HearingPlanet Sonova e-HearingCare 100 Westwood Place Suite 400 Brentwood, TN 37027 Direct Line: 615.724.1405 Fax Line: 615.248.5903