Could you believe a guy who runs a local pharmacy in North Eastern Pennsylvania turned Dan Kennedy’s principles into a 500,000 side-hustle? This week Joe is joined by Frank Lombardo from Cook’s Pharmacy and the man behind the Best Dental Kit.
About Frank Lombardo:
In 1977 Fred Lombardo, father of the current owner Frank Lombardo, bought Evans Drug Store and changed the name to Cook’s Pharmacy. One of only a few independent pharmacies left in Luzerne County, Cook’s is proud of its roots in the Back Mountain Community.
“We work hard at being a special kind of pharmacy, from our great customer service, our unique blend of products, to our seasonal flower tent. People not only enjoy shopping here, they enjoy working here as well. Our staff has very low turnover, in fact most of our staff has been here for 5 years or more. The current competitive atmosphere is one that we embrace because we know it pushes us to be stronger. This is evident by our recent “Best Pharmacy” and “Best Customer Service” awards from The Dallas Post’s, Best of the Back Mountain Awards. Cook’s Pharmacy – “Where the doctors get their prescriptions filled” –Frank Lombardo
To find out more about Frank’s side-hustle, go to Best Dental Kit.
Frank Lombardo - Magnetic Marketing Podcast Transcription
Joe Pardavila: This is Dan Kennedy's Magnetic Marketing podcast. You'll meet folks that are using the Magnetic Marketing principles to take control of their advertising and marketing dollars. I'm Joe Pardavila. Let's do this.
Could you believe a guy who runs a local pharmacy in North Eastern Pennsylvania turned Dan Kennedy's principles into a $500,000 side hustle? True story. Today, I am joined by Frank Lombardo, the owner and pharmacist at Cook's Pharmacy. Hey Frank, how are you?
Frank Lombardo: Good, good. How are you today, Joe?
Joe Pardavila: I'm doing great.
Thanks Frank. Now, before you literally blow my mind with your story. Tell me about Cook's Pharmacy.
Frank Lombardo: My dad was a pharmacist and owned several pharmacies. Many years ago he sold two off to CVS and there were two remaining. I bought one and my sister and my brother-in-law bought the other one.
That's the beginning. I've only worked at Cook's Pharmacy, my whole life. It's a pretty boring resume. You get real good at it when that's all you do. I then bought the store from my father in 2001, I've been a pharmacist for over 30 years and now I've owned my store for 20.
Joe Pardavila: That's awesome. Now, can you shed the light a little bit? Because I'm a super nosy guy. So how do these independent mom and pop pharmacies survive these days when you have these behemoths like Walgreens and CVS, and then you have your Costcos and your Walmart's with pharmacies? Tell me about the business model.
Is it sustainable in this day and age with all these mega pharmacies?
Frank Lombardo: Is it sustainable? That's in question, but it's not because of the big guys. It's because of the insurance companies. It's because of being dictated to by CVS Caremark, which is the big insurance company that CVS bought and companies like Medco.
So they make all the rules. They determine how much we get paid, they are the problem, not the Walgreens or the Rite Aid. We can compete with those any day of the week. We out service them. We're better at what we do, we're more efficient at what we do, customers like us more, but the issue is that we are so controlled by PBMs, pharmacy benefit managers, if you're familiar with that term.
So that will be the demise of the independent pharmacy, if it ever happens. There's writing on the wall, unfortunately I had to discourage my son from going into the profession, because I had to lay it out for him. And he was fine with that because he had some other things he would have preferred to do.
But it was a sad realization when I had to say buddy, you know what? I don't know where this is going to be in five years when you get out of school. So yeah, there are struggles within our niche. No question about it. But, we're still making a good living and I'm thankful for everything that the profession has brought me.
Joe Pardavila: All right. So let's talk about something that's a little on the happier side. Not that's not a happy story, but something on the happier side. Tell me about how you either stumbled or got into this dental kit business.
Frank Lombardo: Yeah. This is a fun story. This is a fun business. I tell everybody, I don't have to deal with insurance companies in the dental kit business.
So here's how it happened. So I would say seven or eight years ago, a local dentist came into my pharmacy. He's a customer. And he brought in his dental emergency kit from his office. He said, look, most of this stuff's all out of date. There's some stuff in here that I never use.
I need something for my office, but can you make something that's simpler and affordable? Because what's out there is way too expensive and way too complicated. So he not only told me that, but he also gave me the recommendations from the American Dental Association as to what should be in a kit.
So I put a kit together for him, called him up, he came down and he looked at it. He goes, this is perfect and by the way, you're going to want to think about marketing this to other dentists, because there is a demand out there, none of us like our options. And you might want to do that.
Joe Pardavila: So tell me about this dental kit.
What's in it?
Frank Lombardo: There's seven things in it. For example, there's an epi pen, it's all stuffed for in case of emergency. Aspirin, Benadryl, Albuterol inhaler. It helps somebody breathe better. These are all items that, in a case of emergency you'd want to have handy.
Joe Pardavila: Explain to me how this guy walks in and says that he needs something for his kit.
Did you ever put something like this together for any other application or was it something that just came out of the blue?
Frank Lombardo: Came out of the blue. He told me what he needed. He told me what the American Dental Association recommends. And I got this stuff together. I put it in a little kit. It was nothing like what we have today, but the words that he said to me were, you're going to want to market this to other dentists.
I had that in the back of my head for a couple years, until 2015, when I joined a GKIC now, Magnetic Marketing and it was the Dan Kennedy world that taught me how I was going to market this item.
Joe Pardavila: And now, how did you find out about Dan Kennedy? Because I always loved these stories about how people wandered into his universe.
So how did you find him?
Frank Lombardo: Mine's pretty similar to all the ones I've heard. I've always been into marketing. I've been interested in it. So I would listen to podcasts like Joe Polish or somebody else. And Dan Kennedy's name kept coming up, like it kept coming up. So I go, I gotta check this guy out.
I see he's got a whole bunch of books. I bought his book. The first one I read was the Direct Marketing for Non-Direct Marketing Businesses. Said, wow, this is really cool. I just love what he's saying, how he talks, how he's straight forward, then I buy the offer to join GKIC at the time.
And that's when you know, I figured, okay, now I've got a way to market this dental kit thing.
Joe Pardavila: And so there's three sorts of aspects to your story here. So there's the aspect of the guy walking in and out of the blue describing these dental kits. Second you find Dan Kennedy, you enter his universe and become part of Magnetic Marketing, but the third part of it is the one that blew me away when I heard your story.
This dental kit business and your, the skills you've acquired from Dan Kennedy, you've built it into a $500,000 side business.
Frank Lombardo: Yeah, correct. So in 2015, which is our first year of really having Best Dental Kit as a name and getting the trademark and getting the website up that year, we did $5,000 in sales.
And then last year we did $550,000 sales.
Joe Pardavila: Now that's not a normal progression.
Frank Lombardo: Yeah. And let me tell you the real exciting thing too, is there's 120,000 dental offices in the United States. We are currently in 2,200 and that's about a thousand more than we were in a year ago. So we're at the tip of the iceberg.
My immediate goal in the next couple of years is just to get to 10,000 offices. At 10,000 offices we've got a business that's generating a few million dollars a year and is quite a bit of profit in it. This little side business, Joe, I will tell you will overtake the profit and volume of my pharmacy.
Joe Pardavila: Wow. That's an amazing story. As much as it is important to obviously create an amazing product then to market it, could you have seen yourself a few years ago, sitting here and talking about a side hustle that's brought you half a million dollars?
Frank Lombardo: No. I didn't see that coming until when we doubled our revenue after a couple years, then this started resonating with me as to the full potential. But initially, no, I'm thinking, hey, it's great, we're selling a few kits here and there it's some extra cash.
But then as we got our system down, it's all direct mail and we just started plugging away and there's some great things that line up for us too.
So we're really fortunate in that there's really, basically two competitors when I started. Now one bought the other one out. There's one guy. They're a big company, dentists don't like them because they've been taken advantage of dentists for years. And we've heard that time and time again.
So we're the little guy. We're the friendly guy, we're used to this because we're an independent pharmacy. And they gravitate to us. We've lost very few customers. We've had very few returns. The other thing that helps us that most States mandate that their dental offices have an emergency kit.
Also their insurance carrier mandates, they should have an emergency kit. So we play to that in our marketing. These dental offices know this is the case, so it's not an item that they want to have. It's an item they need to have. And when that's the case, you have the perfect storm.
Joe Pardavila: Yeah. And not only that is the fact that it's this must need item.
Yet you only have one other competitor. I can't even think of another business in the world that is similar to this.
Frank Lombardo: I can't. The other neat thing is when I worry about other pharmacies copying this, they wouldn't, because there's so many moving parts to a new business. It looks simple.
You look at our website oh, they put a kit together. All that goes into it and the five years of stuff that we've had to build, somebody was to take a quick look at it, they got into it a little bit and I'm sure they'd say, ah that's too much going on.
Joe Pardavila: Wow. And so if you can, because we jumped over from going from $5,000 to $500,000 pretty quickly. So I just want to make sure everyone gets a chance to understand how this company grew.
In show business they talk about the turn where the story changes. So explain to me your turn, where it went from five to $500,000.
Was there a moment there or something you did that helped facilitate that turn?
Frank Lombardo: We kept tweaking our website. Another Dan Kennedy thing is, we got auto-ship involved and we figured out how to entice dentists to take auto-ship because now we have a continuity aspect to our business. Initially, maybe one or two in 10 would opt for an auto-ship.
Today, it's probably 50% or 60% taking auto-ship just because of the way we have marketed it and given incentives to do it, that has helped grow revenue. As far as the moment goes, there's just been a lot of little tweaks along the way. I can't point to any one thing, the exciting thing is we didn't even do any digital marketing yet.
I'm just getting started with that. Now, I've got a company in New York we're going to start targeting via social media and emails. And God only knows where we're going to go from there.
Joe Pardavila: So, hold on a second, you did this growth without any SEO management, any digital marketing, none of that?
Frank Lombardo: Correct. It's all been done through direct mail. A sales letter, it's a two page, two sides of one paper sales letter that we've tweaked several times, but it's all been done with direct mail. We have not done any digital marketing. We are embarking on that now.
Joe Pardavila: What kind of growth do you see with that kind of additional marketing muscle?
Frank Lombardo: I have planned to physically change the layout of my store. Basically we work out of a smaller back room where we do our dental kits, we're going to knock a wall down and we're gonna move our backroom out into the pharmacy retail area. Just because we're going to need the room going forward. I know we're going to have to hire some more people, but it's really not that labor intensive.
We have it set up pretty unique. For example, all the letters get handwritten by an army of old ladies that we pay by the envelope and they come in and they get their lists and they come back a week later with all the envelopes written and stuffed with stamps on them.
And that's another thing I learned a lot through like Craig Simpson and Magnetic Marketing is I read books on direct mail and how you got to address the envelope and put the live stamp on it and all these things that get them open. So we know how to get an envelope open in a dental office. And it's not with a postcard or any fancy marketing material.
It's an old school letter that looks like grandma wrote it.
Joe Pardavila: That is awesome.
And you mentioned the old ladies mailing envelopes, how many people did you have to take on to scale up from, putting together that first kit?
Frank Lombardo: Again, we sent an email out to our customer base, hey, anybody looking for some extra money, addressing envelopes?
And we had several people and we still do, there's probably about seven or eight and we could go get more. And actually my employees at the store for extra money, they'll take lists home at night and weekends, and they come back with envelopes addressed. So it works pretty nice.
We go state by state. We usually go through each state twice a year with the same letter. There's no sequence. We don't do a sequence. We just stick with the same evergreen, Dan Kennedy term, a letter that just keeps going out and orders come in.
Joe Pardavila: What is the retail price for the kits?
Frank Lombardo: Okay. So there's a basic kit and there's a deluxe kit. The basic kit is $419 and that price we've raised a couple of times and our deluxe kit is $699. The deluxe kit has more things in it. Like it's for children as well. So the way we market this, when a dentist goes on and picks the original kit, the basic for the $419, he gets a pop-up, do you see any children in your practice?
That makes them think if you do, you ought to get the deluxe kit because it contains pediatric medications. That has really shifted people to thinking twice and purchasing the deluxe kit, which has quite a bit more profit in it. We have $284 of profit in the deluxe kit. Only $157 in the basic kit.
Joe Pardavila: Only Frank. Geez,
Frank Lombardo: I'm getting greedy now, right?
Joe Pardavila: Yeah you are. Frank before I let you go, I always like to ask this question in the Magnetic Marketing podcast. What is the one, maybe it's either a nugget of Dan Kennedy or maybe one of his books that you think helped you elevate your business?
It could have been even just like one sentence or something like that, or maybe one of his books. Which one do you feel you've drawn the most from?
There's been tons of stuff I've read and listened to, but one of the first things that I read that came out of Dan Kennedy's mouth and I never forgot it.
Frank Lombardo: And I keep saying it to myself and anybody that listens is that you have to be a marketer of what you do, not just a doer of what you do. That would be the one nugget that's really resonated with me from the beginning.
Joe Pardavila: And do you have a favorite Dan Kennedy book you want to share for anyone who hasn't gotten to that one yet?
Frank Lombardo: There's two favorites, probably number one is My Unfinished Business, which is fascinating. And I just read it again when he had some real health issues. I read it a couple of years ago and I re-read it. And the other one is the Ruthless Management of People and Profits. If you're not an S.O.B, it makes you a little bit more of one but in business you have to have a tougher edge and he really lays that out perfectly in that book.
Those two would be my two favorites.
Joe Pardavila: Awesome. His name is Frank Lombardo. He's the owner and pharmacist at Cook's Pharmacy, but he's also this incredible dentist kit magnate. It sounds like he's the Elon Musk of dental kits.
I can not wait to see what happens, Frank, when you guys scale up and start doing digital marketing and use more of Dan Kennedy's principles to just blow up this business. I'm so happy for you, just because of the fact that you're this small town pharmacy, and the fact that you've been able to build a side hustle that's half a million dollars is just mind boggling.
It's a great story. And I think inspirational for anyone who's ever visited Planet Dan.
Frank Lombardo: Thank you so much, Joe, happy to be able to share. Thank you.
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