Online provider gets physical

Monday, December 31, 2007

SAN JACINTO, Calif. – No one’s going to accuse Rod Peterson of following the crowd. While most providers start with a bricks-and-mortar store before venturing onto the Internet, the online entrepreneur moved recently in the opposite direction.
In November, he opened Express CPAP Supply to tap into the local market, he said.
“A lot of the elderly don’t have computers and they’re being told to go to (nationals) because there is no place else to go,” said Peterson, who also owns
Peterson is replicating the high-volume, low margin model of his three-year-old online business, buying in bulk to get better pricing, which he passes on to his customers.
“I’m banking on people making the drive to save $500 or $600,” he said. “We count on repeat business because we are bringing people back time and again.”
Express CPAP does not accept insurance. To pay for two part-time respiratory therapists, store prices are slightly higher than on the Web site. The store is currently open four hours a day, four days a week while the business grows, said Peterson, who is conducting mailings, and ramping up an advertising and PR campaign.
Express CPAP stocks machines and supplies from 15 manufacturers and offers a “bargain bin” of discontinued masks and other accessories. (He doesn’t deal in used equipment).
“We’re neck in neck with the people selling used products at these prices,” said Peterson. “They can get a brand-new machine through me for $300 or $400.”
With the sleep market booming, Petersen anticipates continued growth in both online CPAP sales and traditional HMEs. Demand for cheaper options won’t go away, he said.
“The problem with the Internet is that patient care is always lacking,” said Peterson, himself a CPAP user. “The best thing is to be fitted by a respiratory therapist and get set up.”