How to Become a Medical Supply Vendor

Author

Dr. Stephen Cosentino

You love the idea of helping people look and feel better. But perhaps you’re not really a “people person,” or maybe you don’t have the time to head back to school and get a medical or nursing degree. Are your healthcare dreams dashed?

Not necessarily. Thousands of medical vendors — supply companies, service providers, staffing firms — help support the providers and practices that directly serve patients. In fact, according to a recent industry report, The global medical supplies market is projected to grow at a CAGR of 3.4% from 2022 to 2027, reaching a market size of $163.5 billion by 2027.

The barriers to entry for new medical supply businesses are particularly low. If you’re eager to break into the healthcare industry, perhaps that’s the way to go.

It’ll take some work to get there, of course. Follow these guidelines to start a medical supply company of your own.

Learn About the Medical Supply Industry

First things first, of course. Before you can break into the industry, you need to understand more about it.

As you’d expect, the medical supply industry is a vast and diverse sector that covers a wide range of products and services essential to the healthcare system. These product and service providers can be broadly divided into several important categories:

The medical supply industry can be broadly divided into several key segments:

Consumables: This includes disposable items such as bandages, syringes, gloves, and other single-use medical supplies. Consumables make up a significant portion of the industry and are in constant demand.
Durable Medical Equipment (DME): DME refers to reusable medical devices and equipment, such as wheelchairs, hospital beds, and diagnostic machines. These items have a longer lifespan and require specialized knowledge for maintenance and repair.
Personal Protective Equipment (PPE): PPE includes items like masks, gowns, and face shields that protect healthcare workers and patients from the spread of infectious diseases. The COVID-19 pandemic has highlighted the critical importance of a reliable PPE supply chain.
Specialty and Aesthetic Products: This segment encompasses higher-margin products like dermal fillers, laser devices, and other aesthetic medical supplies used in medical spas and cosmetic procedures.

The medical supply industry is dominated by a few large, well-established players, such as McKesson, Cardinal Health, and Medline Industries. These companies often have extensive distribution networks and leverage economies of scale to offer competitive pricing.

However, the industry is also characterized by a large number of smaller, specialized suppliers that cater to niche markets or focus on innovative products. Some key trends shaping the industry include:

Increasing demand for cost-effective and efficient healthcare solutions
Growing emphasis on preventive care and personalized medicine
Advancements in medical technology, such as connected devices and telehealth
Heightened focus on supply chain resilience and diversification
Regulatory changes and evolving compliance requirements

Understanding these industry dynamics and trends will help you identify opportunities, develop a competitive strategy, and position your medical supply business for success.

Build Out Your Medical Supply Business Idea

After you’ve done your research, you need to figure out what your company will do and make sure it has a good shot at success. Consider:

The type of product or service you’ll sell. If you want to get started quickly, avoid original products that require huge R&D investments. The FDA approval process for medical devices can take years, anyway. Distributing disposable supplies, durable medical equipment, or higher-margin aesthetic products like Bellafill® is less of a headache.
Your target market. Figure out who your likely buyers are. Independent medical practices? Urgent care clinics? Medical spas? Home health care providers? Hospitals? All of the above?

Your income and growth potential. Conduct market research (or hire someone to do it) to establish reasonable annual revenue and growth projections and begin fleshing out your business plan and marketing strategy.

Startup capital. It could take a few years for your business to turn a profit, even if it’s successful. Figure out where that money will come from (and if you’ll have enough).

Make Your Medical Supply Business Official (And Legal)

Once you’ve laid out the building blocks of your idea and determined that it’s worth moving on, it’s time to make your business official and legal. You’ll need to:

Taking out appropriate, adequate business insurance policies
Obtain an operating license from state and/or local authorities
Establish an LLC or other appropriate legal entity for your business
Understand and meet all licensing and regulatory requirements for the types of medical supplies you want to be licensed to sell
Understand and meet the general requirements all businesses need to satisfy in your state, such as setting up an account with the state unemployment insurance fund

This is by no means a comprehensive list of all you need to do to launch your business. But it’s a good starting point.

Grow Your Medical Supply Business

With the building blocks in place, it’s time to grow your medical supply business. You’ll need to invest considerable resources in marketing and business development. Try strategies like:

Line up suppliers. Find and work out agreements with the companies that will supply the products you sell (or the materials you need to make them). Be sure to have a business lawyer review all contracts.
Build out an e-commerce portal. If you can legally sell your products online, invest in an e-commerce portal. This could help you reach new customers while keeping your physical footprint small (and overhead low) as you grow.
Network with medical providers and health systems. In addition to investing in digital and trade journal marketing, reach out directly to medical professionals and buyers at medical practices and health systems and make your pitch.
Align with medical service providers like Empire Medical Training. We’re proud to work with an array of trusted medical vendors and business service providers, from equipment manufacturers and distributors to financial and legal support firms.

With luck, your medical small business won’t be small for long.