How To Start a Medical Supply Business Online
Roadmap to enter and win the market
Leveraging 18-year experience in healthcare and ecommerce, ScienceSoft helps medical businesses gain online presence.
Brief Summary of Our Guide
Launch of an online medical supply business is a viable way for manufacturers, distributors and retailers of medical supplies and equipment to increase their net profit. While the demand for medical supplies and devices has been consistent throughout the years, the need for an online presence is largely dictated by overall digitization of sales transactions across all verticals, including healthcare.
You are welcome to read our full guide, but we’ve also prepared a summary of key ideas to remember:
- A B2M business model is most profitable for manufacturers or distributors of medical stuff. To launch it, you will need to separate a registration process and user journeys for business buyers and individual consumers.
- A platform to sell medical supplies and equipment relies on all the standard ecommerce functionality, though must be tailored to the specifics of your business processes and target audience.
- Key integrations to set up are: a vendor portal, an order management system, ERP, a data analytics solution.
- Relationship marketing can be the best marketing technique to gain long-term clients in a highly competitive market.
- $70,000 is a starting cost of ecommerce platform development for a medical e-business.
Medical Supply & Equipment Market: Trend for Digitization
An online medical supply and equipment market encompasses the sale of essential medical goods – medical apparel, IV kits, diagnostic tools, durable medical tools, surgical consumables, and more – to medical institutions, laboratories, nursing homes as well as to individual consumers for home care.
Over the last five years, the market has been steadily growing at an annualized rate of 17%. Lately, the growth has been driven by the global COVID-19 spread and its consequences entailing an increased demand for medical supplies by both individuals and all kinds of healthcare institutions.
Peter Manko, Ecommerce Consultant at ScienceSoft, is confident that the trend for digitization will continue in the sales of medical supply and equipment:
"Now, we witness global digitization of sales across all verticals, healthcare is no exception. But what puts medical supply businesses in a favorable position is a short life cycle and recurrent nature of medical assets, which makes them immune to market downturns."
Steps to Sell Medical Supplies and Equipment Online
A journey to digital sales will be unique for each medical company, still five milestones will form the basis of your business plan.
Research business licensing and regulations.
Make sure to study both ecommerce and healthcare regulations. You can hire legal advisors to be certain you haven’t missed any important legal aspects of business launch.
Establish a supply system.
Choose certified suppliers and compare their payment and delivery conditions to understand who meets your requirements.
Choose a business model (B2C, B2B or B2M) and launch an ecommerce platform.
It’s important to understand who you want to sell to and how your sales processes will be organized. This will help you create a detailed functional specification for your ecommerce solution.
Plan an automated order management system.
It’s a good practice to offer same-day delivery so that clients could get the required medical goods fast. You also must provide special packaging to deliver fragile medical equipment.
Advertise your webstore.
Think what digital and non-digital advertising channels you can use to meet your target audience.
ScienceSoft will be happy to help you with:
Business Models to Employ
Pricing models for medtech manufacturers
Ecommerce models for medtech manufacturers/sellers
Features of an E-Solution for Medical Supply & Equipment Business
We at ScienceSoft look at an e-solution for healthcare suppliers from two perspectives: as a customer-facing ecommerce website and a constituent of back-office operations. Hence, we describe the website features to have and show a map of technology integrations needed to set up business workflows.
Basic website functionality
Medical supply & equipment catalog management
- Configurable navigation, faceted product search.
- Unlimited product attributes.
- Simple, configurable and bundled products.
- Pre-defined product templates with different attribute sets.
- Recommendations of similar or supplement products.
- Stock tracking.
- Backorders and back-in-stock notifications.
- 360-degree product images for sophisticated medical devices.
- AR-powered user manuals.
Typical ecommerce website structure
- Homepage: page builder for content editing and publishing.
- Catalog pages: online merchandizing tools.
- Product details pages:
- Multiple images per SKU.
- Video format of product description.
- Product rating and reviews.
- Product reviews moderation.
- Shopping cart: automated tax and shipping calculation.
- Checkout: out-of-the-box and custom payment methods.
- Order management dashboard to view, edit and fulfil orders.
- Invoices, packing slips, and shipping labels available for printing.
- Return management authorization.
Ecommerce website setup
- HIPAA compliance.
- Template-based or custom website design.
- Multi-store setup to target different geographies or represent different brands.
Functionality specific to B2C targeting
Guided purchasing process
- High-value product content: product descriptions, downloadable product specifications, video manuals, disposal instructions, etc.
- Price comparison for similar products.
- Pricing based on a customer group (e.g., the elderly).
- Prescription validation.
- Health insurance submission.
- Clear indication of non-refundable items.
- Limitation of item quantity per user.
Functionality specific to B2B targeting
Multi-role account management
- Multiple roles reflecting a company’s procurement hierarchy.
- Possibility to create, edit and delete permissions for all orders (created by a user or subordinates).
- Bulk order approval/rejection.
- Shopping cart export for management approval.
Flexible price formation tools
- Automated quantity-based discounts.
- Customer segmentation.
- Shared catalogs with segment-specific and individual pricing.
- Negotiable price quotes.
Facilitated placement of bulk and complex orders
- Multiple requisition lists of frequently bought items for quick reorder.
- Order by SKU and product files importing.
- Backorders for items out-of-stock or with insufficient stock availability.
Payment and order shipment
- Company credit displaying the current outstanding balance, available credit, and the credit limit.
- Split order shipment to multiple locations.
Key Functionality Illustrated
Supply Chain Structure and Required Integrations
Companies selling medical equipment online need to adopt an integrated approach enabling them to make procurement decisions based on real-time sales data and eliminate manual work involved in multi-warehouse management.
- Creates a consolidated database of vendors.
- Provides a platform for digital communication with vendors.
- Enables the placement and tracking the status of procurement orders.
- Facilitates reordering.
- Gives access to the whole transaction history per each vendor.
- Consolidates real-time stock information from multiple warehouses.
- Alerts on low stock and thus timely prevents out-of-stocks.
- Eliminates manual activities aimed at inventory control and improves labor productivity.
Order management system
- Routes orders automatically to an optimal warehouse based on geographical location and stock levels.
- Enables the setup of workflows to fulfill orders different in order value, quantity, and more.
- Informs customers of order shipment and status changes with automated emails.
Data analytics solution
- Enables sales forecasting for different regions, types of medical equipment and supplies, buyers, etc.
- Optimizes the use of warehouse space by preventing stale stock.
- Nurtures customer loyalty by preventing insufficient stock.
How Much Is It to Launch Online Sales in Healthcare?
Numerous factors will shape the project cost: the volume of your product catalog, web design requirements, the scope of your audience targeting, the maturity of your business workflow automation and required integrations, to name a few. For the middle market of medical supply and equipment sales, we estimate an average cost range for the design and development of an ecommerce portal at $70-250K.
ScienceSoft as Your Digital Implementation Partner
Advocates of digital transformation, we are ready to make your initiative of selling medical devices, supplies and equipment a success. We provide end-to-end ecommerce implementation for medical supply & equipment businesses.
Business & technology consulting
Our ecommerce and healthcare certified consultants will conduct comprehensive research to make your market entry well-targeted. Namely, they will:
- Analyze the target audience, create personas, plan digital user journeys.
- Make you aware of market entry specifics (competition, industry regulations and governmental laws).
- Plan competitive advantages of digital experience to provide.
- Calculate required investments and assess expected ROI.
Digital solution development
Since 2005, our team has been responding to challenges that manufacturers and sellers of medical products face. To help you launch online sales, we:
- Elicit your business requirements and functional characteristics of the future solution.
- Choose a technology stack.
- Unfold ecommerce development process: set up hosting environment, install the software, configure and customize it to comply with functional requirements.
- Integrate your ecommerce operations with other business workflows to ensure automated data transfer.
How to Sell Medical Equipment & Supply: Challenges and Solutions
Challenge #1. Building ecommerce on top of an informational website: costly and time-consuming
Solution: Headless approach
If your medical supply business is already present online with a product catalog or an educational resource (mostly likely built on a CMS), you need to migrate your website from a CMS to an ecommerce platform to enable online sales. The migration might be challenging, however, as you will have to rebuild all the pages anew. The most cost-effective solution will be to decouple the front and back end of your CMS to enable headless data delivery. Then, you will create ecommerce pages and elements in a CMS and connect them via APIs to a newly implemented ecommerce back end.
Challenge #2. The market dominated by big players
Solution: Relationship marketing to accrue your market power
The market of medical supplies and equipment is pretty competitive with large manufacturers and suppliers having established long-term relationships with major clients. Market newcomers may try to overcome this entry market barrier by lowering the prices. This tactic, however, can be self-destructive and lead to a negative profit margin.
What ScienceSoft recommends is relationship marketing.
Challenge #3. The need for a sales team is eliminated by online retail
Solution: Sales team refocusing
For medical equipment business, an ecommerce portal is a self-service tool for clients to choose products, place orders and conduct payment transactions – the actions that used to require from them regular communication with salespeople via email, phone calls or fax. But ecommerce does not make a sales team redundant, rather it frees up their time for strategic thinking and customer relationship building. Their functions may shift to: