Starkey takes stand against “commoditization” of hearing aids via sales to big box stores

By David H. Kirkwood

Brandon Sawalich
Brandon Sawalich

The controversy over Phonak’s decision to sell hearing aids through Costco heated up last week when Starkey Hearing Technologies told its customers that the decision by Phonak and its parent, Sonova, “does not align with Starkey Hearing Technologies’ values and principles.”

In an April 10 e-mail addressed “Dear Valued Customers,” Brandon Sawalich, senior vice-president at Starkey, drew a contrast between his company and Phonak, which is one of Starkey’s main rivals in the hearing aid industry. He said that Starkey, the only U.S.-based company among the “big six” hearing aid manufacturers, “supports the American spirit of the independent entrepreneur.” For that reason, he said, it will not sell its products through “big box” stores like Costco.

 

Sawalich also told customers that effective April 28 it will quit allowing the distribution of its products through HearingPlanet.com, a Sonova company that sells hearing aids directly to consumers, though the consumer does see an audiologist or hearing aid specialist in the Hearing Planet network for a hearing evaluation and to have the instrument fitted. 

 

Sawalich added that Starkey will no longer do business with Right Hear Network, another Sonova company.

 

Starkey Won’t Sell Hearing Aids in Costco; “The Wrong Direction”

 

Sawalich, who has been with Starkey since 1994, spelled out the case against doing business with Costco, as three other members of the “big six” also do—GN ReSound, Siemens (through its Rexton brand), and Oticon’s sister company Bernafon. Widex is the only other major hearing aid manufacturer that does not sell products to Costco.

Sawalich wrote, “It is our belief that we sell better hearing, not hearing aids, and we know that supporting hearing aid distribution through big box retail is a path toward the further commoditization of hearing aids. This commoditization is not the right direction for our industry, and most importantly, is not beneficial for the patients we serve.”

 

Hearing Aids and Big Box: A Continuing Debate in the Industry

 

Starkey’s letter to some 5000 customers is the latest in a series of statements and comments made on this issue since Hearing News Watch first reported Phonak’s agreement with Costco. Since then, many independent practitioners have written to this blog and other online sites expressing concern that they will lose patients to Costco because it will charge much less for Phonak (and other leading brands) of hearing aids than they can.

Others have counseled that independent practitioners will succeed not by competing on price with Costco but by offering more personal attention and professional services than big box stores do.

Among the industry figures who have expressed diverse opinions about this issue at HearingHealthMatters.org are Jeff Newnham, president of Phonak LLC, Ed Keller, president of EarQ, and Terry Ross, vice-president of MedRx.

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ksm

Phonak is deplorable. Our hearing clinic mostly sold Phonak hearing aids, because of the quality. We will NOT be selling them in the future. We felt we’ve been stabbed in the back. Even with our discounts, our COST is about the same as a customer’s cost to be the hearing aids at COSTCO. Did I say deplorable?

Aggie Thiesing

I am a licensed hearing aid specialist that works for Sam’s Club big box store. I don’t think the specialists should be attacked and that we offer less service expertise etc. than the private companies. Blame the manufacturers for being greedy and don’t blame the specialists for trying to make a living.

Carol Agate

I bought my ReSound hearing aids at Costco and received the best evaluation I have ever had in my 30 years of wearing hearing aids. I’ve never before had an audiologist who did real ear measurements. I’ve never had an audiologist who had any interest in or knowledge about assistive listening devices, or educated me about various compensations for hearing loss other than aids. In my experience, audiologists have been simply sellers of hearing aids. I’ve heard there are a few who admit the limitations of hearing aids and do help their clients learn what can supplement the aids, but they are few and far between. Perhaps the competition will make more hearing aid dispensers develop interest and expertise in aural rehabilitation, and fewer of the products they sell will wind up in the drawer.