Connect with us

Business

What Went Wrong At Smile Direct Club?

Published

on

smile direct club

Mohammad Ahmad, a 17-year-old from New Jersey, joined Smile Direct Club in October, just a few weeks after the teeth-straightening company filed for bankruptcy.

A sizable discount on the company’s invisible braces and assurances that the financial problems wouldn’t affect business operations, according to him, persuaded him.

However, Mohammad never received the transparent plastic aligners he was promised after the company went out of business in December, putting him and hundreds of other customers in the lurch.

“I basically got scammed,” claimed Mohammad, still looking for a $1,000 (£788) refund from tutoring fees.

smile direct club

What Went Wrong At Smile Direct Club?

It was a humiliating conclusion for the Tennessee-based company, which had previously had a market capitalization of more than $8 billion and had vowed to disrupt traditional dentistry with lower-cost, remotely-supervised care.

The notion won over more than two million customers. Mohammad, who already wore braces, merely wanted to address some minor shifting when he failed to use his retainer as recommended.

But, from the beginning, Smile Direct Club had to defend itself against opponents concerned about its procedures.

It was embroiled in legal battles with business groups representing traditional dentists and orthodontists, who claimed that its remote treatment, frequently provided after customers mailed in impressions of their mouths taken at home, provided inadequate care and accused the company of misleading customers.

Prominent investors, including Hindenburg Research, known for betting against companies, had also expressed concern, accusing Smile Direct Club of “cutting corners” and warning that it would “wind up as a case study in why it’s a bad idea to invest in a company that attempts to fit a complex, dangerous medical process onto a low-cost, high-volume assembly line.”

The firm disputed the charges and called them “the latest in a stream of unevidenced and misleading attempts… to thwart legitimate competition.”

However, it took the threat to its business seriously and moved quickly to quell subsequent bad allegations.

smile direct club

What Went Wrong At Smile Direct Club?

It threatened reporters and academics with legal action and compelled angry customers to sign non-disclosure agreements to receive a refund until a government lawsuit forced it to stop this year.

According to Myron Guymon, president of the American Association of Orthodontists, Smile Direct Club’s troubles eventually caught up with them.

“Orthodontics looks simple but it is a complex medical procedure and should start with an in-person exam and good diagnostic records,” the doctor stated.

Executives of Smile Direct Club did not reply to a request for comment.

The company blamed its demise on typical economic villains: the pandemic and rising prices, which it claimed damaged its manufacturing operation, escalated expenses and squeezed its target clients.

It also highlighted a $63 million award from a court for a contract dispute with its arch-rival and former business partner Align Technology.

But, according to Brandon Couillard, an analyst at Jefferies, deeper issues were at work, noting that the cost of addressing reputational issues – not just about quality but also about customer service – hampered development and caused the loss-making firm to spend too much on advertising.

“It’s not hard to Google and find people who have had a bad experience,” he told me. “As the business matured, people did become more aware of the brand and that wasn’t always a positive experience.”

After a streak of spectacular sales growth, Smile Direct Club’s triumphant 2019 listing on Nasdaq, the US stock market index, proved to be the firm’s pinnacle moment.

It raised over $1 billion and briefly made its young founders wealthy.

However, sales immediately decreased from more than $750 million in 2019 to $470 million last year. More than half of their revenue was spent on advertising to gain new customers. The losses piled up.

When it filed for bankruptcy in September, the company had only $5 million in cash and roughly $900 million in debt.

“It was pretty clear that consumer interest in the brand had been eroding for some time,” said Mr. Couillard.

Investors later accused Smile Direct Club of withholding critical information about its detractors during its 2019 share offering, and the company was sued for violating financial laws.

However, Sanjula Jain, chief research officer at healthcare analytics and research firm Trilliant Health, said Smile Direct Club’s demise is also a reminder of the market’s limits for remote health care, which her team discovered has fallen in almost every area since the pandemic’s peak.

“Consumer behaviours are not changing in the way that a lot of the market and virtual care providers want it to,” she told me. “Will that change over time remains to be seen.”

University of Pennsylvania professor Anna Wexler, who has studied direct-to-consumer health firms, believes there is still a future for remote or partially remote orthodontic care, noting that younger generations, in particular, are dissatisfied with current health care options and seeking more convenient and affordable models.

smile direct club

What Went Wrong At Smile Direct Club?

Her 2020 study of 470 remote orthodontist patients discovered that about 6% were required to return to a regular clinician for follow-up therapy.

However, more than 87% were satisfied with their care and were willing to overlook flaws in exchange for a reduced cost.

The study cautioned that the usage of non-disclosure agreements by Smile Direct Club may have skewed the responses.

On the other hand, Prof Wexler stated that she anticipated it and other companies marketing similar treatments to accept her findings.

Instead, Smile Direct Club threatened legal action, accusing her team of misrepresenting its process and slandering the company.

“I was shocked,” she recounted, noting that her team had taken care not to name any companies.

The conflict, which had not previously been disclosed, was resolved with a letter to the editor.

Prof. Wexler said she was not sorry to see this particular company die, considering its history of attempting to muzzle opponents.

“Maybe if they hadn’t spent so much money on legal counsel they’d be in a better financial state,” she told me.

SOURCE – (BBC)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

Continue Reading

Business

Tesla Cuts The Price Of Its “Full Self Driving” System By A Third To $8,000

Published

on

tesla
AP - VOR News Image

NEW YORK — Tesla reduced the price of its “Full Self Driving” system — which cannot drive itself and requires drivers to remain attentive and ready to intervene — by nearly a third to $8,000 from $12,000, according to the company website.

tesla

Penn Today – VOR News Image

Tesla Cuts The Price Of Its “Full Self Driving” System By A Third To $8,000

Tesla CEO and billionaire Elon Musk stated in 2019 that there would be a fleet of robotaxis on the road by 2020, but that promise has yet to be fulfilled, and the system must still be supervised by humans.

The cutbacks, which took effect on Saturday, follow Tesla’s decision to trim $2,000 off the pricing of three of its five models in the United States late Friday. That is the most recent example of the difficulties that the electric vehicle manufacturer is facing.

tesla

Electric – VOR News Image

Tesla Cuts The Price Of Its “Full Self Driving” System By A Third To $8,000

Tesla dropped the costs of its most popular model, the Model Y, a small SUV that is the best-selling electric vehicle in the United States, as well as the Models X and S, which are older and more expensive. Prices for the Model 3 car and Cybertruck remained unchanged.

tesla

KBB – VOR News Image

Tesla Cuts The Price Of Its “Full Self Driving” System By A Third To $8,000

The price cut comes a day after Tesla’s stock fell below $150 a share, wiping out all gains recorded in the previous year. The Austin, Texas-based company’s stock price has fallen almost 40% this year due to declining sales and growing competition. Discounted sticker prices are intended to entice more car purchasers.

SOURCE – (AP)

Continue Reading

Business

Japan’s Anti-Monopoly Body Orders Google To Fix Ad Search Limits Affecting Yahoo

Published

on

yahoo

TOKYO — Japan’s antitrust authority stated Monday that Google, the US search giant, must rectify its advertising search restrictions that impact Yahoo in Japan.

The Japan Fair Trade Commission said in a statement that a recent investigation into Google’s activities revealed that it was hurting fair competition in the advertising sector.

yahoo

Blog Spot – VOR News Image

Japan’s Anti-Monopoly Body Orders Google To Fix Ad Search Limits Affecting Yahoo

Yahoo Japan Corp., which later merged with the Japanese social media platform Line, began offering keyword-targeted search advertising services utilizing Google’s technology after the two businesses forged a partnership in 2010.

The FTC claims that Google imposed limits in its search advertising deal with Yahoo Japan for more than seven years, limiting its ability to compete in focused search ads.

An FTC investigation into whether this violated the Anti-Monopoly Law prompted Google to lift the limitations.

Google said in an emailed statement that it has fully cooperated with the commission’s investigation and that the agency has not determined that it has breached antitrust laws. It committed to follow the commission’s orders and provide “valuable” search services to Japanese consumers and marketers.

yahoo

RMW – VOR News Image

Japan’s Anti-Monopoly Body Orders Google To Fix Ad Search Limits Affecting Yahoo

Line Yahoo declined to comment.

Google will be subject to a three-year review to ensure that necessary improvements are implemented, according to the commission. It did not impose any fines or other penalties on Google, which remains popular in Japan.

The commission’s decision comes after another setback for Google in Japan. Japanese doctors launched a civil case against the corporation last week, seeking damages for what they call baseless, insulting, and frequently inaccurate statements.

yahoo

White & Case – VOR News Image

Japan’s Anti-Monopoly Body Orders Google To Fix Ad Search Limits Affecting Yahoo

The Tokyo District Court lawsuit seeks 1.4 million yen ($9,400) in damages for 63 medical professionals who posted ratings on Google Maps.

Google responded by saying it is working “24 hours a day” to remove misleading or incorrect content on its platform, using human and technology resources “to delete fraudulent reviews.”

SOURCE – (AP)

Continue Reading

Business

Tesla reduces US prices for 3 of its electric vehicle models following a rough week.

Published

on

tesla
Getty Images - VOR News Image

Tesla reduced the pricing of three of its five models in the United States by $2,000 late Friday, highlighting the issues facing the electric vehicle firm run by billionaire Elon Musk.

The business reduced the costs of the Model Y, a small SUV that is Tesla’s most popular model and the best-selling electric vehicle in the United States, as well as the versions X and S, which are older and more expensive versions. Prices for the Model 3 car and Cybertruck remained unchanged.

tesla

AP – VOR News Image

Tesla cuts US prices for 3 of its electric vehicle models after a difficult week

The reductions dropped the starting price for a Model Y to $42,990, $72,990 for a Model S, and $77,990 for a Model X.

The decision comes a day after Tesla’s shares fell below $150 per share, wiping out all gains earned over the previous year. The Austin, Texas-based company’s stock price has fallen almost 40% this year due to declining sales and growing competition. Discounted sticker prices are intended to entice more car purchasers.

Musk announced early Saturday on X, the social media site that was previously known as Twitter, that the cost of an entry-level Tesla could be as low as $29,490 after accounting for a federal tax credit and gas savings.

Industry observers have been waiting for Tesla to unveil the Model 2, a tiny electric vehicle for approximately $25,000. This month’s media rumors that Musk intended to cancel the project added to uncertainty about the company’s direction, but Musk denied the reports.

tesla

AP – VOR News Image

Tesla cuts US prices for 3 of its electric vehicle models after a difficult week

The price drops marked the end of a long workweek for Tesla, which said on Monday that it would be laying off 10% of its global workforce, or approximately 14,000 employees. The company also announced the recall of roughly 4,000 of its 2024 Cybertrucks after discovering that the accelerator pedal could become stuck, enabling the vehicle to accelerate accidentally and increasing the danger of a crash.

Musk stated on Saturday that he has postponed a planned weekend travel to India to meet with Prime Minister Narendra Modi due to “very heavy Tesla obligations.” He expressed on X that he was looking forward to rescheduling the visit for later this year.

Tesla is slated to report first-quarter profits on Tuesday.

tesla

reuters – VOR News Image

tesla

Le Auto – VOR News Image

Tesla cuts US prices for 3 of its electric vehicle models after a difficult week

The business stated earlier this month that its global sales declined substantially from January to March as competition grew, electric car sales growth stagnated, and previous price cuts failed to attract additional buyers.

Tesla’s quarterly sales fell year on year for the first time in nearly four years.

SOURCE – (AP)

Continue Reading

Trending