Jeff Cooper’s asthma and allergy store brings in valuable cash sales.

Beleaguered by the paperwork demands of third-party payors and fed up with their skinflint ways, Jeff Cooper and Jessie Fraggi, RN, the owners of a Los Angeles–area HME enterprise, borrowed an idea from Hollywood. Pick a successful part of your operation—in their case, their asthma and allergy products—and spin it off into its own stand-alone cash-sale business.

Now, 2 years into the venture, SneezeFree, their retail outlet devoted to the treatment and prevention of allergies and asthma, is poised to break even.

“The potential for this kind of business is clearly there; it is workable,” Cooper says. “These are tough times to be a small supplier in DME if you are dependent solely on insurance reimbursements. You need to have a good cash business to survive.”

One-Stop Allergy Shop
Positioning itself as the go-to place for all things related to allergy relief, SneezeFree sees about 60% of its traffic coming from physician referrals, 30% from advertising-generated walk-ins, and 15% from customer word of mouth. The 1,200-square-foot store consists of a showroom organized into two vignettes—a bedroom and a living room.

“This allows customers to see how the various products might be integrated into their own homes,” Cooper says. “The main vignette is the bedroom since that is where the focus on allergy control needs to be. Most people can deal with allergies during the day. It is when they try to sleep that their problems will really hit them. And, if they wake up in the middle of the night because they are congested and wheezing, then the lack of sleep is really going to be tough on them the next day.”

Products displayed include bedding, mattress casings, humidifiers, dehumidifiers, nebulizers, hypoallergenic cleaning agents, bacterial cleansers, pet dander-control shampoos, and educational books galore. There is an emphasis on all-natural items, such as an apple seed–based spray that alters the molecular structure of dust-mite feces so as to render that particular allergen harmless.

“We are trying to appeal not just to people with allergies but also to people who have environmental and chemical sensitivities,” Cooper says.

Positive Response
The company from which SneezeFree arose is Premier Healthcare Equipment Inc in Culver City, a neighborhood on the west side of Los Angeles. Cooper and Fraggi started Premier in April 1993 with him as its CEO and her as its COO. Premier and SneezeFree are operated as fully separate businesses.

“At the time we started Premier, I was working for another DME company and Jessie was working in a medical facility as a nurse manager,” Cooper says. “We had both pretty much gotten as far as we were going to in those positions, so we decided the next step for us, in terms of our careers, was to combine her clinical expertise as a wound care nurse with my sales expertise and form our own company.”

The Los Angeles market is crowded with HME firms. In an attempt to stand out, the partners chose to make service their hallmark.

“There’s not a lot of room to try to be unique with products in this market, so we felt that we had to provide service, service, service,” Cooper says. “That meant doing things like being available even after regular business hours. With a lot of my competitors, people would call after-hours and get connected to an answering machine or maybe an outside answering service. But with us, people call after-hours and they reach a live person who is an employee of this company.”

Premier debuted without a retail store. That came a few years later after Cooper and Fraggi decided that a more visible profile in the community would help the company.

The experience of Cooper’s children with asthma and allergy products helped convince him that there was a niche for a company like SneezeFree.

Reluctant Convert
Not long after Cooper and Fraggi opened the store, representatives of the makers of various allergy products began dropping by to pitch the owners for shelf space. Cooper was reluctant to handle any of their products, fearing they would blend poorly with his existing mix—chiefly wound care and respiratory items.

However, the sales representatives who called on Premier were not the kind who take no for an answer. “They were persistent and kept coming by every so often to see if I had changed my mind,” Cooper says.

While this was going on, Cooper’s children were diagnosed with allergies. Their doctor prescribed medication. It did the trick, but Cooper was uncomfortable having his children spending the remainder of their adolescent years—and perhaps their entire adult lifetimes—on powerful antiallergy drugs. Remembering the pitches of the allergy products sales representatives, Cooper decided to try a few of their wares in his own home.

“I put air purifiers in my children’s rooms and switched to dust-mite–proof bedding and saw that these made a marked difference,” he says.

The results impressed Cooper enough that he decided to at least consider whether Premier should carry them.

“I looked at what my competition was doing with these same products,” he says. “For the most part, they were selling by direct mail and over the Internet. There really was little in the way of walk-in retailing. So I went ahead with some test-marketing in my store. I set aside about 25% of the total floor space for the allergy products, then ran some print ads and put additional signage in front of the store to call attention to the products.”

Transactions came slowly at first but then built quickly as word spread that Premier was selling such items.

“The response from consumers was very positive,” he says. “People told us we were the only place they knew of locally to get these products. We also learned that, for consumers, being able to walk into a store was especially important when it came to buying bedding. That is a very personal item, and people like to be able to touch it before buying. Many are reluctant to buy bedding online or through a mail-order catalog because they are not able to physically handle the product first.”

Because there were more allergy products than Cooper had space available to accommodate, he and Fraggi began to wonder whether a retail store geared exclusively to allergy and home-environment products could be viable. After evaluating the market’s composition and crunching some numbers, they decided to give it a shot, and SneezeFree was born.

Cooper scouted a location several miles away in Brentwood, an upscale area near the University of California, Los Angeles, Medical Center and several other major hospitals with robust allergy and asthma programs.

“The rents in Brentwood are among the highest in Los Angeles, but I felt the expense would be worth bearing because of the access the location would give me to the medical centers and support groups,” he says.

Cooper supported the debut of SneezeFree with an aggressive marketing effort, including print advertising and outreach to the allergists.

“There is really nothing else like SneezeFree around here,” Cooper says. “If people can be made aware of us, even if they are not conveniently near the store, they will still come because only here can they get what they are looking for.”

Working A New Frontier
One problem to solve is inventorying. Cooper sometimes finds it difficult to obtain the products for which his customers clamor.

“A lot of these vendors are themselves growing by leaps and bounds because of the demand that is out there, and they are having problems keeping up with it,” he says.

The way Cooper looks at it, running out of stock and not being able to quickly replenish is worse for the store than carrying too much inventory and sitting on it for months.

“Most of what we stock moves pretty fast,” he says. “But where we get killed is when we have to tell the customer, sorry, we’ve run out.”

SneezeFree could go in many directions from here. One option is to open other SneezeFree stores in the LA area and form a minichain. Or it could initiate a franchise program. Cooper is considering all possibilities but has reached no firm decision.

“Mainly, I just want to focus on building awareness of the store and attracting more customers,” he says. “I’m very optimistic about how this will all play out.”

Rich Smith is a contributing writer for Dealer/Provider.