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Cryogenic Solutions doubles down with Inventory Solutions

Cryogenic Solutions doubles down with Inventory Solutions ‘Over the years, the secondary market has really become mainstream’

INDIANAPOLIS and NEW YORK CITY - Cryogenic Solutions and Inventory Solutions are betting the secondary market for HME is hot and only going to get hotter.

Cryogenic recently acquired Inventory Solutions, creating a one-stop shop for HME providers looking to service their equipment and buy refurbished equipment, which can cost 20% to 35% less, on average, than new equipment, company officials say.

“Over the years, the secondary market has really become more mainstream,” said John Wittenberg, owner of Inventory Solutions, a New York City-based national supplier of refurbished equipment, who will stay onboard short-term then retire. “In the beginning, reimbursement was so high, providers weren't as interested. But as reimbursement continues to drop and there's only so much manufacturers can pull out of the cost, this has become an alternative way for providers to reduce their overheads.”

Cryogenic, an Indianapolis-based factory-authorized service center, has doubled down on the secondary market by not only buying Inventory Solutions, bringing its total employee count to 40, but also kicking off a $1 million capital improvement plan to double the footprint of its main office to 30,000 square feet.

Not even the trend toward self-filling oxygen concentrators and portable oxygen concentrators can slow down Cryogenic, which does a swift business in hydra-testing and refinishing oxygen cylinders so they can be re-used, a staple of delivery-based business models.

“We've been cylinder testing for four years and, initially, we did a few hundred a month,” said Todd Durham, owner of Cryogenic. “In the last six months, we've gone from doing 7,000 to 9,000 a month.”

Wittenberg added, “While the non-delivery model seems to be growing, the acquisition costs on (Homefills and POCs) is so high, a lot of providers are saying, 'We can't afford to do that right now.' The market isn't bearing that out.”

Cryogenic did some sales of refurbished equipment prior to the acquisition so, technically, the two companies were competitors. But they had a “gentleman's agreement” not to “shoplift” each other's customers, until, due to consolidation and other industry pressures, that became more and more difficult.

“(Inventory Solutions) was impacting our growth and we couldn't do a whole lot more without breaking our agreement,” Durham said. “Since John was looking for an exit strategy, it made sense for me to buy him.”


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