Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on April 11, 2022 Updated on November 27, 2023
$12,050 - $25,100
$104,000 - $312,000 p.a.
Time to build
1 – 3 months
$52,000 - $94,000 p.a.
The pandemic and our ageing population have sharply increased the need for medical supplies, spurring 50% market expansion in the last decade. You could start a medical supply business by partnering with a manufacturer and selling the medical supplies at resale prices either online, in-person, or from your own store. If you sell online or directly to healthcare facilities, you can run the business from home, and make some good money while making sure that caregivers and patients have the life-saving tools they need.
Before you get started, however, you need to understand how to launch a business. Fortunately, this step-by-step guide lays out all you need to know to start a successful medical supply business.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Number of people employed – In 2021, the US medical supplies wholesaling industry employed 255,219 people.
Trends and challenges
Trends in the medical supply industry include:
Therapeutic devices, which includes anything from walkers to hearing aids to catheters, represent 90% of the medical supply industry.
The number of elderly Americans is expected to double by 2060 to 95 million, becoming nearly one-quarter of the total population. This will significantly increase demand for high-quality medical supplies.
Challenges in the medical supply industry include:
Regulations surrounding medical supplies are constantly evolving and it’s crucial that medical supply businesses stay up to date.
Continuing healthcare supply chain issues are making it difficult for medical supply businesses to keep inventory stocked.
Average level of education –The average medical sales representative has a bachelor’s degree.
Average age – The average medical sales representative in the US is 46.7 years old.
How much does it cost to start a medical supply business?
Startup costs for a medical supply business range from $12,000 to $25,000. The largest cost is your initial stock of inventory.
Setting up a business name and corporation
$150 - $200
Business licenses and permits
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
Inventory of supplies to sell
$10,000 - $20,000
$500 - $1,000
$12,050 - $25,100
How much can you earn from a medical supply business?
Prices for medical supplies vary greatly based on the item. These calculations will assume an average price of $100, although some items could be significantly higher. Your profit margin should be about 50%.
In your first year or two, you could work from home and sell 20 items per week, bringing in $104,000 in annual revenue. This would mean $52,000 in profit, assuming that 50% margin. As you ramp up your marketing, sales could climb to 60 items per week. At this stage, you’d rent a commercial space to store your inventory and hire staff, reducing your profit margin to around 30%. With annual revenue of $312,000, you’d make a tidy profit of $94,000.
What barriers to entry are there?
There are a few barriers to entry for a medical supply business. Your biggest challenges will be:
The startup costs of inventory and a website
The massive competition in the industry
Finding a manufacturing partner
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a medical supply business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research medical supply businesses in your area and online to examine their products, price points, and what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a company that sells durable medical equipment, a medical device company, or a hospital bed supplier.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as medical products for nursing homes or therapeutic devices for health care providers.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your products or services
There are literally thousands of items you could sell. It’s probably best to specialize in a certain type of supplies.
How much should you charge for medical supplies?
Prices will vary by item. Check market prices to make sure that you’re competitive. After your cost to purchase from the manufacturer, you should aim for a profit margin of about 50%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
If you choose to sell to clinics, hospitals and care facilities, find them on LinkedIn and Google Maps. If you decide to sell directly to your customers, they will likely be an older demographic and on Facebook.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storage facility for your inventory. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Medical Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “medical supplies” or “medical products”, boosts SEO
Name should allow for expansion, for ex: “Care Connectors” over “Diabetic Supplies Direct”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Medical Supply Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A brief summary of the medical supply business plan, highlighting its key points and objectives.
Business Overview: An introduction to the medical supply business, including its mission, vision, and key facts about its establishment.
Product and Services: A description of the medical supplies and services the business offers, emphasizing their features and benefits.
Market Analysis: An examination of the medical supply market, including its size, growth potential, and target customer demographics.
Competitive Analysis: An assessment of competitors in the medical supply industry, identifying strengths, weaknesses, and opportunities.
Sales and Marketing: A plan for how the business intends to promote and sell its products and services in the market.
Management Team: An overview of the individuals responsible for leading and managing the medical supply business.
Operations Plan: Details on how the business will operate, including logistics, suppliers, and day-to-day processes.
Financial Plan: Projections and analysis of the business’s financial performance, including revenue, expenses, and profitability.
Appendix: Supplementary information such as market research data, resumes of key team members, or other relevant documentation to support the business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to medical supply businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your medical supply business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a medical supply business. You might also try crowdfunding if you have an innovative concept.
Some states require a special license to sell certain types of medical supplies. Check with your state for requirements.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your medical supply business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as DME Works, acctivate, or arbimed, to manage your leads, inventory, invoicing, and payments.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
For your medical supply business, the marketing strategy should focus on showcasing the quality, range, and reliability of your products. Emphasize your commitment to meeting healthcare needs with timely deliveries, adherence to medical standards, and providing a broad spectrum of medical supplies, from basic consumables to specialized equipment.
Professional Branding: Your branding should convey trustworthiness, reliability, and expertise in the medical field. This includes a professional logo, business cards, and an informative website.
Direct Outreach: Network with hospitals, clinics, nursing homes, and other healthcare facilities. Offer demonstrations or samples of your products to showcase their quality and effectiveness.
Digital Presence and Online Marketing
Professional Website and SEO: Develop a comprehensive website that catalogs your products, including detailed descriptions and specifications. Optimize for SEO to rank for searches related to medical supplies, healthcare equipment, and medical products.
Social Media Engagement: Utilize LinkedIn for B2B networking and Facebook to connect with a broader audience, share product information, and post about health industry news.
Content Marketing and Engagement
Healthcare Blog: Share informative content about the latest in medical supplies, healthcare technology advancements, and guides on choosing the right equipment.
Email Newsletters: Regular newsletters can inform your clients about new products, special offers, and company updates.
Video Demonstrations: Create product demonstration videos, explaining the features and benefits of your medical supplies.
Experiential and In-Person Engagements
Trade Shows and Medical Expos: Participate in medical trade shows and expos to showcase your products and connect with potential customers.
Product Training Sessions: Offer training sessions for complex equipment to medical staff, adding value to your services.
Collaborations and Community
Partnerships with Manufacturers: Build strong relationships with medical supply manufacturers to ensure a steady supply of products and the latest in medical technology.
Collaboration with Healthcare Providers: Work closely with healthcare providers to understand their needs and offer customized solutions.
Customer Relationship and Loyalty Programs
Loyalty Discounts: Implement loyalty programs offering discounts or benefits to regular customers.
Referral Programs: Encourage referrals from existing customers with incentives for both the referrer and the new customer.
Promotions and Advertising
Targeted Advertising: Use online platforms and medical publications to reach healthcare professionals and decision-makers in the medical industry.
Sponsorships and Community Involvement: Sponsor local health events or charity drives to build brand recognition and goodwill in the community.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your medical supply business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your medical supply business could be:
The best therapeutic devices to help you live to the fullest
Discount medical supplies for your assisted living facility
The most advanced medical supplies and equipment for your patients
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a medical supply business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in medical supplies for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in medical supplies. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a medical supply business include:
Distribution Center Workers – prepare items for shipping
General Manager – ordering, inventory management, accounting
Marketing Lead – SEO strategies, social media
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Medical Supply Business – Start Making Money!
The medical supply industry is huge and expected to grow in the coming years as the population ages. You can get a share of the market by starting your own medical supply business. It’s not a difficult business to start, and you can run it from home and make a good living. You just need a manufacturing partner, and you can sell to local health care providers and facilities or offer your products online.
Now that you know what you need to know about the business, you’re ready to get to work and start your entrepreneurial journey to building a successful medical supply business!
Medical Supply Business FAQs
Can a medical supply business be profitable?
Yes, profit margins on medical supplies are high. The key is to specialize in a certain type of supplies and target a specific market for the products you offer.
How do I determine prices for my medical supplies?
Prices will vary by item. Check market prices to make sure that you’re competitive. After your cost to purchase from the manufacturer, you should aim for a profit margin of about 50%. Once you know your costs, you can use this Step By Stepprofit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who is the biggest distributor of medical supplies?
The biggest distributor of medical supplies may vary depending on the region and industry, but some major players in the global medical supply distribution market include Cardinal Health, Medline Industries, and McKesson Corporation.
What are the top 10 medical consumables?
The top 10 medical consumables can vary based on specific needs and healthcare settings, but some commonly used medical consumables include gloves, syringes, needles, bandages, surgical masks, gowns, catheters, wound care products, IV sets, and disposable medical instruments.
What is the difference between medical supplies and medical equipment?
Medical supplies generally refer to consumable items used in healthcare settings, such as gloves, syringes, and bandages, that are single-use or have a limited lifespan. Medical equipment, on the other hand, refers to durable devices or machines used for diagnosis, treatment, or monitoring, such as X-ray machines, ultrasound systems, and hospital beds.
How can I differentiate my medical supply business from competitors in the market?
To differentiate your medical supply business from competitors, you can focus on factors such as competitive pricing, superior product quality, exceptional customer service, fast and reliable delivery, a wide product selection, personalized solutions for specific healthcare needs, establishing strong relationships with manufacturers and suppliers, and emphasizing your company’s reliability and reputation.
How can I expand my medical supply business to reach more clients and markets?
To expand your medical supply business and reach more clients and markets, consider the following strategies: diversify your product offerings, explore new geographical regions or markets, establish partnerships with healthcare facilities, clinics, and hospitals, leverage e-commerce platforms for online sales, attend industry trade shows and conferences, and invest in targeted marketing campaigns.
How to Start a Medical Supply Business
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Medical Business Name
Create a Medical Supply Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Medical Supply Business - Start Making Money!
Medical Supply Business FAQs
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