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Making the Right Match
good line versus another good line. Does pricing come into play in terms of what you can turn around and sell that product for? Obviously, it’s one of the elements, but not the only element.”
Training is another important consideration, he says. Knowing what the vendor will do to ensure staff become experts on the product is important in retail HME, where consultative sales are important to ensuring customers make the purchase.
“I look at this as being a huge advantage,” Baumhover says. “It’s one thing to have a great product mix and great pricing, but what does the vendor offer you, the provider, in terms of training, to learn about the product, and more importantly, to be able to sell the product?
“There are many great vendor partners out there that have this element, either via their website, via onsite training, but a lot of great pieces there that you de nitely want to take advantage of, obviously help not only you as the provider, but obviously your people be comfortable passing that experience and that knowledge on to the customers,” he adds.
A similar purchasing criteria is marketing support. Vendors often offer provider marketing assistance that can help a provider broaden their market reach and sales volume.
“Some have cold marketing dollars that they’re able to offer you, that gives you money to go out and do some different types of marketing,” Baumhover says. “Others have different marketing pieces that come with a purchase of their products — maybe a looping video, maybe some collateral that you can put on the shelves, and other pieces along that line
that obviously can bene t you as the provider. “Lastly, is the relationship, the feedback, and
the assistance that you build with a particular vendor,” he adds. “Your vendors can be your best friend in terms of just helping you make
a decision, and if they’re willing to do that in addition to a couple of those other points that I brought up, I think you found yourself a good partner to partner with and, obviously, do some good things long-term with them.”
The Products Themselves
In addition to the vendors, the are other elements of the products themselves that
will obviously factor into a smart purchasing strategy. Having a good, better, best range is one factor. Financing options and warranties are others. If anything, making the right match to a provider’s customers is fundamental.
“Another big, big play from a product stand- point is what does your current customer base look like?” Baumhover explains. “ I think that obviously depicts what product or products you should be carrying.”
If the provider is unsure of that answer, it should start by looking at the top two or three categories in the store. Then think about other businesses serving the market
“What’s your competition carrying?” Baumhover says. “That is de nitely one obvi- ously that you’ve got to be taking a look at. What are they carrying versus what are they not carrying, and how you can combat that?
“Maybe they have some sort of return policy, as well,” he continues. “If something doesn’t work in a short amount of time or in X amount of time, customers are able to return the item and use that money for other product.”
If anything, product choices are based more on the market and market demand than anything else. The key, Baumhover advises, is to take in all these factors — the 80/20 rule, vendor capabilities, product features, the local market — and then the best purchasing options should start to come into focus.
“If you do your due diligence and you do your homework,” he says, “I think you’re going to nd a nice partnership and some success by asking the right questions and really getting down to the nitty gritty with that particular vendor.” n
24 HMEBusiness | April 2018 | hme-business.com
Management Solutions | Technology | Products
LEVERAGING TECHNOLOGY
ONCE A PROVIDER has selected the right vendors and products, it needs to ensure that it is keeping the right stock on hand. This is a good opportunity to leverage
the IT investments that the provider has likely made, as many HME software pack- ages offer good inventory management features, including those that automate various elements of purchasing.
The inventory system should auto- matically monitor speci c, heavily ordered items’ inventories, and when they reach certain thresholds, notify the provider
to order replacement stock. In fact,
many systems will create the necessary purchase orders and some will even auto- matically submit them electronically.
This can be a boon to provider busi- nesses because not only does it ensure that they will have adequate stock to meet patient and referral, but it also saves them from having to keep too much stock in the warehouse, freeing up precious capital for other uses.
Better yet, some automated purchasing systems can help facilitate drop ship- ments, as well. And in some arrange- ments the product can even be shipped using the providers’ branding. This means certain inventory never has to sit in the warehouse at all. Naturally, this arrange- ment doesn’t suit all types of DME, but for applicable items it can represent an even greater cost savings as it also eliminates some delivery costs, as well.
Besides re lling existing inventory, the purchasing aspects of inventory manage- ment systems should also enable the provider to generate orders for DME that it might not usually stock as well.
Also automatic purchasing tools typi- cally also records recent purchases so that providers can sort automated orders based on the best price, or supplier lead time,
or similar criteria. This also includes ship- ping charges, another major cost saving achieved simply through the group orders that automatic purchasing encourages. n
“We have a very
good relationship
with our key
vendors.... These
guys are partners
with us, so if
some inventory
isn’t moving, then it becomes part of the partnership to gure out how we can do a better job.”
— Wayne Slavitt, Mobül, the Mobility Store