The Next Steps for Creating an Online HME Business

By Kamal Haddad on 26 August 2016

By now, everyone knows DME/HME dealers and pharmacies should be selling online through their own websites. Some have gone down that path and succeeded, while others have failed. Perhaps more surprising is the number of folks who remain on the sidelines. Whether you have tried selling online and failed or have never tried it at all, the information in this series will hit home. In this article, I aim to change your thinking about e-commerce and dispel any misconceptions you may have.

This is the first article in a four-part series aimed at a frank discussion about complementing your existing business with e-commerce. The objective is to discuss specific steps and strategies that will help you to provide better service and generate new forms of revenue. Many of these strategies can be applied to dealers looking to move away from retail locations altogether and establish a pure online presence. But, my objective is to focus on dealers who want to maintain their core businesses and use online technology as a strategy to satisfy their customers while increasing sales and providing a better care experience.

Part One will focus on a broad overview of the retail sales aspect of the HME/DME industry, and then an overview of retail/cash sales options available using e-commerce. Specifically, why are you not using e-commerce to sell retail/cash items to your customers?

Part Two will focus on helping you define the relationship between your core business and online retail/cash sales. Do you want to build an Internet presence to compete with the thousands of online retailers spending massive amounts of money advertising online, or are you trying to capitalize on complementing your core business with an online retail business to support your customers?

Part Three will focus on the best practice elements of setting up and running an online store. We will discuss everything from finding suppliers, pricing contracts, MAP pricing, customer service, hosting options, site security, customer reviews, social media marketing, keeping a site updated and the amount of staff time and expertise required to properly run a site.

Part Four will focus on the sales tax complications of running an online store, as well as some potential legal exposure.

I would like to start by making a couple of assumptions: 1. You should be selling as many retail items as you can in order to provide a better customer-care experience, and 2. You should have some type of online presence that includes e-commerce capabilities.

Now that I have told you what you already know, let’s dig deeper into exactly why and how this can be accomplished. The concept of selling retail products for cash has been thrown around this industry for years, caused mostly by competitive bidding and the effects it has had on the industry. It is a leading topic in industry news and at Medtrade. So, chances are good that you have read and heard much on this topic. However, what I personally find lacking is content on how to use e-commerce technology to complement your retail sales efforts.

To be clear, there are many great presentations and articles that focus on merchandising your showroom or maximizing your floor space. There are also many great presentations about developing a strong sales force, proper sales training for employees, marketing strategies and social media use. What I seldom see is information designed around webstore strategies to support these great in-store efforts. I will leave it to the brick-and-mortar retail experts to discuss those topics, while I focus on using sound webstore strategies to bring all of those efforts together using e-commerce technology.

By now, you probably have some sort of in-store retail strategy and even some type of company website and/or social media presence. You have possibly seen some sort of increase in your revenue that comes from the sale of HME/DME items sold at retail. The reality is, there is more you are missing out on that you can do using e-retail.

What is e-Retail?

E-retail is the online merchandising of products your customer needs combined with the ability to complete the sale transaction through a website or web application for the purpose of generating revenue and improving the care experience. If you do not have a website where your customers and/or your salespeople can complete a retail sales transaction online, the first question is, “Why not?”

  • Is it the high cost to set up an e-commerce website?
  • Is it the cost, additional staff, infrastructure and expertise needed to manage on online store?
  • Is it confusion over current technology that changes rapidly?
  • Is it a fear of competing with online retail giants?
  • Is it finding the right suppliers with the right pricing so you can make a respectable profit margin?
  • Is it taking on the risk of purchasing and getting stuck with inventory you can’t move?
  • Is it a fear that reallocating efforts from your core business may take you out of your comfort zone?
  • Is it the risk that the costs will outweigh any benefit?

These are all legitimate concerns and risks associated with getting involved in setting up and operating an e-commerce website. Over the course of the next four issues, we are going to try and make sense out of these concerns in order to better face these challenges using current technologies.

Key Takeaway No. 1

You cannot survive by in-store retail alone. UPS and comScore recently conducted a survey citing that only 20 percent of purchases last year were made the conventional way—that is by going into a physical store to browse and buy. Today’s shoppers are tech-savvy and they have determined what they buy online, how they buy it and where they shop. According to this survey, 40 percent of shoppers complete the entire purchase cycle from A to Z exclusively online, with nearly 38 percent making a purchase with a combination of both an in-store and online interaction. In short, if you focus exclusively on retailing product from your physical location, your audience is only 20 percent of the population.

While there is evidence you will increase revenue by implementing in-store retail strategies aimed at that fifth of the population, you are missing out on the rapidly increasing percentage of the population that makes buying decisions partly or exclusively online. I feel there is a legitimate reason to continue to invest in and foster the in-store experience because there are intangible benefits that can never be attained purely through the online experience. But if you fail to plan on capitalizing upon this trend, you may as well plan to fail.

To let this very important point really hit home, I would like to compare the drugstore/pharmacy entities that developed an online presence very early on—such as,,, etc.—and the many more small regionals, independent stores and some fairly large chains that did not establish an online e-commerce presence—and still do not have one. How many of their in-store customers shop online with their competitors? How much revenue are they losing by not providing the online experience their shoppers are demanding?

Key Takeaway No. 2

Don’t try to compete with the established big-box online retailers unless you can match their online advertising budgets and resources. We will cover this topic in more depth in next month’s article.

Key Takeaway No. 3

Keep your e-commerce website updated with current products, promotions, content, security and technology. Shoppers (many of whom are millennials) want to buy anytime and anywhere using their tablets and smartphones. Not only are a majority of purchases made online, but these shoppers also demand smart innovation. We will cover this topic in depth in the third part of the series.


Kamal J. Haddad, CPA, founder and CEO of Health Mobius LLC, is an entrepreneur and well-known expert in the health care technology arena. He has a proven track record generating revenue through applications that integrate the care process and patient compliance with retail sales. For more information, visit