VGM Fulfillment strikes a nerve

‘The distribution piece of the business is the most cumbersome’
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Friday, December 30, 2016

WATERLOO, Iowa – VGM Fulfillment has been processing and shipping CPAP supplies on behalf of HME providers for nearly six years, but 2016 was a banner year.

By the end of the year, it was shipping supplies for more than 1,000 locations.

“Our volume has grown 35% or more year over year since 2009,” said Jeremy Stolz, vice president of distribution for VGM Fulfillment, which employs more than 100. “But it’s more like 45% in 2016.”

To accommodate that growth, VGM Fulfillment in July 2016 doubled its warehouse space to 80,000 square feet. To put that in perspective: It got its start in a 500-square-foot garage.

Stolz knows it sounds cliché, but he said VGM Fulfillment has taken off because it saves time and money for HME providers that are short on both.

“The distribution piece of the business is the most cumbersome piece for HME providers to manage themselves,” he said. “They become overloaded with products. Products become discontinued. Products get lost.”

With VGM Fulfillment, providers send their orders electronically through their resupply software—be it medSage, ResMed ReSupply or Brightree Connect—and let the company take care of the rest, Stolz says.

“We don’t disrupt their relationships with their patients or their manufacturers,” he said.

Because VGM Fulfillment is shipping more orders than providers would be individually, it gets better rates from carriers like UPS and FedEx, and can charge providers minimal shipping and handling fees, Stolz says.

“Overall, including overhead and all those other expenses in managing inventory, they’re spending 30% to 40% less using VGM Fulfillment,” he said.

Additionally, because VGM Fulfillment is doing more shipping, it has the wherewithal to invest in technology to make the process more efficient and cost effective. In September 2016, it flipped the switch on a new enterprise system from Microsoft.

“The system we had up until this point got us as far as it could,” he said. “This system will take us well into the future.”

Provider Robyn Parrott revisits VGM Fulfillment periodically, but she says the service doesn’t “make sense” for her company right now.

“We have a local shipping provider that dispenses overnight in Michigan,” said Parrott, president of Troy, Mich.-based Sleep Solutions, which ships about 1,000 packages per month. “It costs much less than any other shipping costs that I have seen—less than $4 per package.”