Are you making 20% in profit margin?

Summary:

• Gross Profit Margin: 60–75%

• Net Profit Margin: 15–30% (with efficient operations)

Revenue Breakdown (per year, per OD):

Based on national averages for a single-provider office:

Source of Revenue	% of Total Revenue	Average $ Amount
Eye exams	15–25%	$100,000–$200,000
Eyeglass sales	45–55%	$200,000–$450,000
Contact lens sales	10–15%	$50,000–$100,000
Medical services	10–15%	$50,000–$100,000
Total Gross Revenue	100%	$400,000–$800,000

Typical Expense Categories:

Expense Category	% of Revenue	Notes
Cost of Goods Sold (COGS)	25–40%	Frames, lenses, contacts
Staff Salaries & Benefits	20–30%	Includes opticians, front desk
Occupancy (Rent/Utilities)	5–10%	Highly variable by region
Marketing & Advertising	2–5%	Google Ads, recall campaigns
General Admin/Insurance	5–10%	Software, supplies, insurance
Doctor Salary (if owner)	Optional	Often included as owner draw
Total Operating Expenses	~60–75%	Before taxes and debt service

Net Profit Margin:

Type of Office	Net Margin
Efficient private practice	20–30%
Typical solo OD office	15–20%
Overstaffed or low volume	5–10% or negative

A lean, well-managed practice can produce $150K–$250K in net profit annually per OD.

Ways to Improve Margins:

1. Boost Optical Capture Rate – Increase the % of patients buying glasses.

2. Upsell Premium Products – e.g., blue-light filters, AR coating, designer frames.

3. Expand Medical Services – Dry eye, myopia control, diabetes care.

4. Automate Recall & Scheduling – Reduces no-shows, keeps schedule full.

5. Inventory Control – Avoid overstocking or slow-moving frames.

6. Negotiate Lab Costs – Lower COGS by switching labs or using in-house finishing.