Online sales boom

Saturday, September 30, 2006

As people rocket into cyberspace searching for better prices, they're fueling growth for online HME retailers.
According to the U.S. Census Bureau, 35 million Americans are age 65 and older. Approximately 32% use the Internet, says the Pew Internet and American Life Project in a Feb. 15 to April 6, 2006, tracking poll.
As online shopping clicks with more of them, those numbers will grow, say analysts.
Sherry Burgess, founder of two-year-old, said her company has grown from a staff of two to eight. She attributes online growth to a market environment in which Medicare and other third-party payers drive up costs that many customers simply can't afford.
"It's not so much that people are uninsured as underinsured," said Burgess. "Patients are having to pay out-of-pocket for high deductibles and high co-pays. If you go to a regular DME, the pricing you've got to pay is astronomical."
Building customer relationships is just as important online as it is in a traditional storefront.
"I've told every employee who ever worked for me, it's the service that sets you apart," said Burgess. "I don't care if they're in the back doing shipping. They're going to know exactly what our equipment does and how to help the patient."
Lisa Stein, CEO and co-founder of seven-year-old, hires employees with DME experience and said engaging the customer in detailed phone conversation ensures the customer gets what they need.
"I would suggest we do as good a job or better in fitting some equipment over the phone than many bricks and mortars can do in person," said Stein. "We don't ever sell someone their first piece of high-end equipment, but for a repeat buyer who knows what they're looking for, (it works very well)."
Valerie Paxton, co-owner and vice president of, said selection is also important.
"We're doing what it takes to get the right products up there--as many as we can--at the right price," said Paxton. "People notice that and they come back."
Allegro offers 19,000 products.
Paxton said Allegro strives to keep its site fresh and easy-to-use with product descriptionsand images.
Since the bulk of online sales are cash, and many online providers do very little third-party billing, most Internet companies aren't too concerned with competitive bidding.
"If we did participate, it would be in very select categories," said Stein. "Medicare is trying to drive delivering certain products that don't require the full level of service in a more cost effective way and I think that's what the Internet and mail orders do."