Part-time provider 'loving the growth'

CORONA, Calif.  -  Provider Rod Petersen's online CPAP business does about $1 million in sales annually - not bad for a part-time operation with four employees.

“Our main goal is to help as many people as we can get affordable equipment,” he said.

Petersen, who works as a water treatment operator at his “day job,” launched www.youneedsleep.com about four years ago to meet the needs of the uninsured and underinsured. He followed with a brick-and-mortar, Express CPAP Supply, in November 2007. For both, business is booming, he said.

Express CPAP has moved three times in the last 18 months, each time into larger quarters. Its latest location is 15,000 square feet of warehouse and office space, with a small retail store.

“We don't have a huge showroom,” said Petersen. “People want to see and feel the masks and try them on. They aren't interested in the mannequins.”

The new location - smack in the middle of the metro Los Angeles area - is already enjoying a steady increase in foot traffic, he said.

“We used to average three or four walk-ins a week,” he said. “Now, it's four a day.”

Besides walk-in traffic, Petersen has his eye on another referral source: Kaiser Permanente, a large, managed health care organization with 8.7 million health plan members.

“We've jumped on that,” he said. “Kaiser often pays for the sleep study but not the CPAP. They want their patients to get the best prices, and we are on their list (of providers with low prices).”

The company carries most manufacturers' products, and offers masks for as low as $39 and CPAP machines for $175.

“We keep our margins low and (focus) on volume,” said Petersen. “I am just loving the growth.”

Apart from a mention on youneedsleep.com, Petersen hasn't advertised the new Express CPAP location. His advertising dollars go toward pay-per-click advertising on Google, which costs $3,000 to $4,000 per month.

Petersen employs two respiratory therapists - one of whom does double duty in the warehouse. He recently added a customer service representative to actively follow up with customers.

“The Internet can be such a poor thing for customer service and if we don't do anything, people just sit out there in limbo,” said Petersen. “We can look up what they bought and ask how it's working for them.”