Distribution Channel: Labs

| 4 minutes

Applicable product ranges: Medical Devices

Why don’t labs buy directly from AdvaCare?

Labs are a minor distribution channel for AdvaCare Pharma’s products. However, like hospitals and clinics, labs are not the direct buyer of AdvaCare Pharma products, instead having to purchase our products from our distributors, for the following reasons:

● A single lab usually does not have the demand or buying power to order large quantities of each product, meaning a single lab cannot meet our MOQ (Minimum Order Quantity) per product. It is possible that a lab chain could have the demand to meet some of our MOQs, but it is still not likely given that most labs are independently owned in developing countries.
● Only a minority of our products, about 40%, are positioned specifically for the lab channel. The majority of medical devices that are positioned for labs include:
- AccuPoint Syringes and Blood Collection
- AccuQuik Rapid Tests and Diagnostic Supplies
- StaySafe Protective Equipment (PPE) and Biohazard & Waste
- StayGuard Disinfectants
● Lab procurement relies on on-demand fulfillment, meaning smaller quantities are ordered and delivered quickly because labs, like hospitals, generally require a very wide range of products quickly and in smaller quantities.
Understanding Different Types of Labs

There are different categories of labs. Although all labs serve the same purpose of analyzing testing samples and providing results, clinical labs use the largest percentage of our medical devices amongst all labs. We have to adjust our strategies and promotional materials to more effectively ensure the success of our distributors and ultimately our products for the lab channel.

Note that more developed markets will have a greater number and range of different types of labs, compared to developing markets in which labs are more limited.

Some common types of labs that our distributors supply our products to include:

TYPES OF LABS
Clinical Labs
  • These labs perform diagnostic tests on patient samples, such as blood, urine, or tissue samples. They may use a variety of medical devices, such as blood analyzers, centrifuges, and microscopes.
  • Clinical labs are the main secondary target audience compared to other types of labs.
  • These labs will use our AccuQuik Rapid Tests and Diagnostic Supplies, AccuPoint Blood Collection which other types will not use, in addition to our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Research Labs
  • These labs conduct scientific research and may use medical devices such as microscopes, imaging systems, and DNA sequencers.
  • These labs would mostly use our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Pharmaceutical Labs
  • These labs develop and manufacture drugs and may use medical devices such as mixing and blending machines, tablet presses, and sterilization equipment.
  • These labs would mostly use our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Environmental Labs
  • These labs test samples of air, water, and soil for contaminants and may use medical devices such as gas chromatographs, spectrophotometers, and mass spectrometers.
  • These labs would mostly use our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Food Testing Labs
  • These labs test food and beverages for quality and safety, and may use medical devices such as microbial analyzers, pH meters, and spectrophotometers.
  • These labs would mostly use our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Veterinary Labs
  • These labs diagnose and treat animal diseases and may use medical devices such as ultrasound machines, X-ray machines, and blood analyzers.
  • These labs will use our Veterinary Rapid Tests and AccuQuik Diagnostic Supplies, AccuPoint Blood Collection which other types will not use, in addition to our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Forensic Labs
  • These labs analyze evidence from crime scenes and may use medical devices such as DNA sequencers, microscopes, and imaging systems.
  • These labs would mostly use our StaySafe Protective Equipment and Biohazard & Waste, StayGuard Disinfectants.
Hospital Labs vs Independent Labs

Hospitals require a high volume of daily diagnostic testing on patient samples, such as blood, urine or tissue samples. Therefore, it only makes sense that most hospitals have an in-house clinical lab to conduct such testing. The capability of a hospital lab varies greatly according to the hospital, with larger hospitals often having more capable labs that can perform a greater range of testing to support more departments in the hospital. Smaller hospitals such as district/community hospitals might have less capable in-house labs, while clinics likely do not have a lab and will have to send samples to an independent lab.

It is important to distinguish between hospital labs and independent labs because both might conduct similar types of testing, but hospitals are especially interesting for us to focus on given that the procurement department of a hospital likely also handles purchasing for the in-house lab, which greatly expands the scope of products a hospital might purchase from us if they purchase the same or other products for hospital use outside of the in-house lab.

Independent clinical labs are still important as these labs still consume a much greater scope of our products compared to other types of labs. The importance of the lab channel depends on the country and our distributor’s distribution network.

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