PHOENIX – As a Medtrade Spring presenter just last month, Tim Rutti (pictured) educated attendees about how to deal with bad online reviews. By the time he returned to his Phoenix, Ariz.-based Valley Medical Supplies, the economic effects of COVID-19 were materializing, and fast.

Acknowledging “extremely scary times” and “wiped out” foot traffic, Rutti quickly began pruning inventory by stopping all ordering of big ticket items. From there, he evaluated all aspects of the business, including ways to ethically take advantage of the situation. Medtrade Monday sat down with Rutti to get an idea of how he went from layoffs to a point now where he is actually hiring.

Greg Thompson, editor, Medtrade Monday: What was the situation in early March when you got back from Medtrade Spring in Las Vegas?
Tim Rutti, president, Valley Medical Supplies, Phoenix, Ariz: We were watching everything happening across the country and talking to friends in other states impacted by full shutdowns, and they were telling me there’s no business coming in, and I thought, ‘Oh man that’s coming to me.’

Thompson: What were your first concrete moves?
Rutti: I started looking at my costs and how I can wean things down. I stopped ordering all the big ticket items, because inventory is a huge cost for me to have sitting on the floor if it’s not going to move.

Thompson: What about layoffs and staffing?
Rutti: I was pretty aggressive, and laid off half of my staff, and asked the others to go on a part-time basis while I try to get through it. They did, and we relaxed all of our marketing, and pulled all of our field marketing back inside.

Thompson: I realize every state is different, but how did it hit you out in Arizona?
Rutti: In Arizona it didn’t hit us as quickly as everybody else, but when the stay-at-home orders came into play, that really wiped out all of my traffic from seniors. They all stayed home. In response, we tried to anticipate that they’re going to need free delivery, so we set that up for anybody who wanted to buy anything. That was helping families, especially seniors who were locked in their homes.

Thompson: What was the competitive climate like at this time?
Rutti: We realized everybody was trying to make a dime off of this, and we thought we should offer something for free. One of our big competitors in town was doing some big advertising, but it seemed like the pricing was pretty high, and you had to buy a certain amount, so we thought, let’s counter and do something for our customers—so we started providing gloves. If you bought $50 of anything from us, then we would drop a free box of gloves in the package. That went over really well.

Thompson: How else did you modify business practices?
Rutti: It was constant retooling last month. We reduced our hours to save some money, but also to not put my front line folks right in the exposure of this virus for full days. They were really appreciative. I thought it was going to work the other way. I thought they were going to quit, but they jumped right on board. I’ve got good people with me.

Thompson: What were people asking for when they called the store?
Rutti: Almost every call was for PPE [personal protective equipment], and I mean every call. Our call volume increased by 200% to 250%. We were getting 100 calls a day at a store, and that’s not normal.

Thompson: And people were primarily ordering products over the phone?
Rutti: Yes, primarily calling. The calls were going crazy, and we couldn’t keep up with reduced staff, so it really was a struggle. We realized what the requests were, and our distribution chain cut everything off, although we have one distributer that’s been there, but really all the other major distributers were told by the government, ‘You can’t sell to resellers. You must provide everything to the front line health care.’

Thompson: What about sales of other items?
Rutti: None of the big items were selling, not even walkers or wheel chairs—nothing. It was just these PPE calls. We couldn’t get supply from the manufacturer. We could not get the product that everybody was asking for. Meanwhile, we could not sell the products that were in our inventory, so it was a struggle.

Thompson: What did you end up doing?
Rutti: I started reaching out to everybody in the state to find other sourcing, and recognized there is an entirely different world of brokers and suppliers and distributers that all work in a network, and they’re all trying to source products for hospitals and manufacturers. That has opened us up to being able to purchase the supplies and being able to provide all of that demand with supplies, and now we have changed everything. We’re selling almost exclusively PPE, and luckily when we get them in the store, we are able to upsell other items. All of those customers since the middle of March are all new.

Thompson: Has your business actually increased?
Rutti: We are doing significantly more transactions per day than we’ve ever done, and they’re all new customers. I feel like this is all going to work out in terms of the business.

Thompson: Why do you feel that way?
Rutti: We’re getting exposure to customers that we never would have gotten, and we as medical suppliers always try to get the healthy people, and they don’t come in. So now they are, and they are getting experience with us, and my nice and friendly staff.

Thompson: What items in particular are you sourcing?
Rutti: We’ve been able to readily source masks and gloves, thermometers, pulse oximeters, and nebulizers. Those are the ones that are consistent, every day, doing record sales on all that. It’s nothing we ever really did before. We sold one oximeter a day maybe, now it’s like 10 to 15 per day. I’ve never done so much in sales, but I don’t know if that’s to be expected much longer.

Thompson: You mention the sheer amount of new customers…how do you hope that helps in the future?
Rutti: I have seen a lot of new customers, so great customer acquisition that I didn’t really have to pay for since I pulled all my marketing. I got all this exposure without having to market, and a whole new category.

Thompson: How long did masks used to sit on the shelf?
Rutti: We would carry a box of masks and it would sit for two weeks on our shelves. Now we’re moving thousands of masks pert week.

Thompson: How quickly do they sell after delivery to your store?
Rutti: We had a shipment of masks that came in two days ago, and it was 1,000 masks. Within four hours it was sold out.

Thompson: How many can people buy at a time?
Rutti: You can only buy five at a time.

Thompson: And what are the demographics of these new customers?
Rutti: They are 30s, 40s, 50s and all healthy. They’re either trying to get some for their families, or so they can go back to work, or trying to get some for loved ones who are seniors. It’s a totally different group—the middle age group—that I’ve only heard about until now.

Thompson: How are so many people finding you? Through a key word search?
Rutti: Yes, we do a lot with digital marketing, and it’s been really successful for us starting up and making a name, but we’re way up on the organic list, and that doesn’t have anything to do with paying for advertising. On that organic listing, we pop up number one, and that helps because they don’t see an ad, and then they see a Yelp listing right below it so we look legit, and then they call us.

Thompson: And these calls are coming from the public, as opposed to facilities, correct?
Rutti: Yes, we are getting calls mostly from the public. Early on we did get calls from facilities, but the distributors cut everybody off, and then all these health care providers were calling us, not able to get anything either. There was a pause there where I didn’t know how to get anything. Then we just started working through it and getting a little creative and finding new resources and that’s really paid off, because now we have boatloads. We are constantly having to order, and it’s scary because they are big numbers.

Thompson: What are the inherent challenges in working with these new sourcing entities?
Rutti: I’ve worked so hard on terms with these manufacturers and distributers to have a relationship with them, and then I’m having to reach out to guys I’ve never met, and they all want all their money up front. That’s a lot of money. It’s a little scary. The risk is totally worth it, because we’ve been able to keep the customers happy, and we’ve been able to help some facilities and businesses.

Thompson: Have you been able to tap government resources?
Rutti: We were able to get funding right away, so I could put employees back on payroll. Now I’m hiring. I can’t believe it. If you would have asked me a month ago, I thought there’s no way. We are a cash business. Retail is all cash, so a month of no cash. I thought we were going to get killed. Two weeks to three weeks later, I can’t believe it, but we’re doing so well.