Amramp: Providers missed boat on worry-free biz

Friday, July 27, 2012

I interviewed Julian Gordon, the president and founder of Amramp, recently. In case you’re not familiar with Amramp, it’s a South Boston, Mass.-based manufacturer of portable wheelchair ramps.

Just as easily as these ramps are attached to houses they can be taken off. As you can imagine, that makes them very attractive to discerning homeowners and landlords, not to mention consumers who will need them only for a short period of time.

Another important thing to know about Amramp: It has been manufacturing ramps since 1998, but since 2002, it has been getting ramps into the hands of consumers through franchising. Today, it has 45 franchises across the country, only about 10% of which, it turns out, are owned by HME providers.

Gordon says he went the route of franchising after spending about two years exhibiting at industry trade shows and failing miserably to get providers to add his ramps to their product mixes. (Sounds a little like Inogen’s story, doesn’t it?)

“Even if they agreed with me on the product and the market—the way health care is practiced, they don’t want to keep you in the hospital—they would not make the investment,” he said.

That investment included significant warehouse space, because Amramp emphasizes a rental business that means ramps are constantly coming and going. Gordon estimates that 45% of the ramps sold are rented; 55% sold are needed for more than four to six months. 

Gordon says the providers he did get to sign on never made the ramps a priority, even though it was largely a cash business. He says ramps go for $4,200 and rent for $100 per week for 13 weeks.

“They have hundreds of products, most of them reimbursed by Medicare,” he said. “I couldn’t get them to make the calls.”

That was 2000. In other words, that was before Round 1 of competitive bidding put a dent the size of a meteor on the industry, forcing providers to seek cash businesses with a new sense of urgency.

When I asked Gordon, if he were he making the same pitch to providers today, did he think he would get a different response, we both knew the answer: Definitely.

But unlike providers probably, Gordon doesn’t have any regrets with the way things have played out. The first five years he was franchising, he saw his revenue go from $1 million to $3 million to $5 million to $9 million to $12 million. He figures if he can get 20 more franchises, he’ll have the whole country pretty much covered. Additionally, this year, he opened his first franchise in Canada and, next year, he plans to open his first in the U.K.

“I’m getting lots of calls, so I have the luxury of finding the right person and the right location,” he said. “We seem to have solved the reimbursement issue; we don’t need agency approvals, like accreditation; and there are no regulations of what we do.”

Sounds nice, doesn’t it?