How to Rake in Bucks with Cash Sales
About a year ago, Nelson Stone, president of Active Medical Supply, Inc. in Tampa, Fla., believed it was time to change his business operation. Stone, who’s been in the durable medical equipment business for about 10 years, primarily sold power wheel chairs. But then he had an epiphany.
To diversify his company, Stone decided not to be more than two percent invested in any one supplier or buyer, and not to rely on Medicare. He also wanted to be more like retail stores and only accept cash, credit cards or checks. So far, this is what he’s learned from his new business strategy:
Have a vision. Stone reanalyzed his situation and looked at where he wanted to be 5, 10 and 15 years down the road. He thought about products that could be sold on a cash basis, such as incontinence, ostomy and wound care supplies, with the intention to target other markets and diversify his project offerings.
Since implementing his new strategy, he’s tripled his business with one major vendor and increased his business with another by 169 percent within the year’s first quarter.
Accessorize. Selling accessories that complement major products and becoming a one-stop shop are essential to becoming a market leader. For instance, Stone began selling lifts to complement power wheel chairs. Selling a diverse mix of items is good, but don’t go overextend your capabilities.
Think outside of the box. Stone’s goal was to branch into other areas that insurance companies paid for on a current basis. It was important for him to provide services that competitors did not, such as special orders and deliveries.
“I refuse to be in a box,” he says. “I’m diversifying and as I learn I’m adapting to my environment. I’m not staying the same when I read every day how the industry’s changing.”
Offer outstanding customer service. One of Stone’s business goals was to become a resolution provider for his customers. “I want to solve their problems, whatever the situation,” he says. “They want to feel like they’re going to a place that cares about their situation.”
Keep up with technology. Recently, Stone purchased more than 10 computers and a top-of-the-line billing package. Stone said each DME company should have a billing package that includes a customer service tracking interface, point of sales system and inventory tracking.
“When people call us we can easily pull up their names to see their contact history and whether they’re running low on anything,” he says.
Don’t forget your Web site. It’s imperative for providers to have a Web site, where people can purchase items, do research and read news related to your product offerings.
Pick a great location. Having a store front near medical facilities and hospitals is ideal. But you still need to market to them. If you’re located in a warehouse, Stone says you can still do well but will have to rely more on referrals and good relationships with physicians.
Learn about your demographic. Before getting into the cash sales business , do your research. Investigate who you’re going to serve and adapt to the market you’re trying to reach.
Points to take away:• Educate yourself. Read industry magazines to see what others are doing.
• Invest in technology.
• Diversify your product offering.
• Add a few complementary items to your major ones.
• Have a plan. Write down a vision of what it will take to be successful in the business.
• Conform to your customers’ needs. It’s not about what you want to sell. It’s about what your customers need.
• Have a great attitude. First impressions, whether over the phone or in-person, are lasting.
This article originally appeared in the July 2008 issue of HME Business.