SCOTTSDALE, AZ – When Medtrade Monday first checked in with AZ MediQip a few years ago, the multi-location Arizona business had enjoyed more than 600% growth over five years. Owner Mark Nicotera had transformed the business’ 95% reliance on Medicare to a cash-only ethos. In 2020, he has no regrets.
All four Arizona locations in Peoria, Scottsdale, Mesa, and Chandler were again up substantially year over year, and cautious optimism still reigns. The Scottsdale store moved about a quarter of a mile in mid 2018, and the perspective of a year and a half shows it was the right decision. “It’s a higher visibility location and we’re getting more walk-in traffic,” says Nicotera. “It’s still not my biggest store, so it could use more space, but we had to take what was available.”
Nicotera’s stores are 4,000 to 5,000 square feet and he reports, “I still won’t have enough room to offer the products that people want to see and buy. I can’t imagine how somebody can succeed with a 1,000- or 1,500-square-foot store. I just think they are missing opportunities because they don’t have all of the products people are looking for.”
Sales associates who patrol the large floor space are operating under “incentive” pay, rather than pure individual commissions. “I just can’t imagine just paying somebody a flat wage, at which point they really don’t care if they make the sale or not,” Nicotera says. “That said, I don’t believe a commission structure is right for our industry. I do a base-plus-bonus structure, where the bonus is based off store performance and company performance. I don’t want the customers to walk in the door and be pounced on by a sales person looking for a commission.”
The concept has worked, but Nicotera acknowledges that it requires the proper mindset. “Occasionally, it [incentive pay] causes friction, because someone says, ‘I sold more, so why am I not rewarded more?’ I respond, ‘If you’re selling, somebody else is busy building equipment and refreshing the sales floor, and without that you don’t have anything to sell,’ so it’s still a team effort.”
From the beginning, Nicotera has focused on selling mostly big ticket items—lift chairs, hospital beds, power mobility, CPAP, portable and home oxygen—many with $800 to $2,000 price points. He found many of these items at Medtrade Spring, where he plans to be yet again when the show convenes March 3-5, at the Mandalay Bay Convention Center in Las Vegas. “A lot of smaller HMEs can’t sell bigger items,” he says. “They don’t have the real estate, and they don’t want to invest the inventory dollars.”
In 2020, lift chairs are still a “very big category,” and the average ticket price continues to move up. “Hospital beds have always been a good category for us, but we’ve gotten more serious with offering some higher-end product,” Nicotera says. “Instead of just home care beds, we’ve started doing long-term care beds, and those are selling fairly well. We’ve done a few pool lifts, and those are big ticket items. We’ve done vehicle lifts, and we’d like to do a lot more of that, but customers aren’t necessarily finding us yet for that opportunity. We’re working to improve our visibility and making sure we’re at the top of the search.”