The impact of rising prices on medical equipment sales

May 8, 2024

Rising prices associated with supply chains across various industries have caused problems for both suppliers and their customers all over the world, and this is no different within the medical equipment industry.

SAF work with several medical equipment suppliers within the UK healthcare market, and the rising prices for equipment is an increasing trend. As a result, customers are becoming progressively reluctant to purchase new equipment through capital budgets, which can negatively impacting the sales of medical equipment for suppliers.

This blog will explore the impact that rising prices have had on medical equipment sales over the past 12 months, and how collaborating with SAF to utilise our bespoke finance solutions can help alleviate the challenges that suppliers face.

Why are medical equipment prices increasing?

Inflation: Global inflation has peaked, having a huge effect on the costs of manufactured equipment across various sectors and industries. A rise in the cost of manufacturing has had a direct impact on the prices of medical equipment, as suppliers increase prices to mitigate against rises in costs.

Supply Chains: The aftermath of the COVID-19 pandemic, in addition to a number of global macro-economic challenges have caused severe disruptions in manufacturing supply chains. As a direct result of this, the overall costs of manufacturing have increased, creating an adverse effect on the cost of sales that suppliers face.

Demand for medical equipment: The healthcare equipment industry has experienced a surge in demand for medical equipment and devices in recent years. Advancements in medical technology have led to the development of more specialised healthcare equipment, increasing the quality of patient care. This has resulted in an increased demand for medical equipment, which has in turn contributed to the rise in prices.

Challenges of increasing medical equipment price

The medical equipment suppliers we work with are currently struggling to reach targets in terms of medical equipment sales, due to rises in costs that customers face. Investing in state-of-the-art equipment often requires significant capital investment, meaning budget limitations can often prevent healthcare providers from procuring new or upgrading outdated equipment.

As a result, both parties are directly impacted, with customers less likely to invest in new technology due to financial constraints, and suppliers experiencing a decline in sales.

What is asset finance and leasing?

Asset finance and leasing are financial solutions that allow businesses to access funding to acquire assets, such as equipment, machinery, or property. Instead of paying for the asset upfront through outright capital purchases, the end user can spread the cost of an asset over time through regular payments, usually via monthly, quarterly, or yearly repayment profiles.

Advantages of Finance and Leasing

Suppliers who can offer finance and leasing as an alternate route of procurement for customers experience various benefits that would not be seen through only offering standard capital purchase. These include:

Increased Sales: Offering lease options can broaden customer bases by making products more accessible to businesses that may not have the capital to purchase them outright. This can lead to increased sales volume and market share for the supplier.

Competitive Advantage: In markets where competitors do not offer lease options, providing this financing option can give the supplier a competitive edge. It allows suppliers to differentiate their offerings and attract customers who prefer the flexibility and financial benefits of leasing.

Customer Loyalty and Repeat Business: By offering lease options, suppliers can build stronger relationships with customers by showing understanding of their financial drivers. Businesses that lease equipment are more likely to return to the same supplier for future leases or additional products, growing customer loyalty and generating repeat business.

SAF’s Solution

At SAF, we work with a number of the largest medical equipment suppliers within the UK, priding ourselves on the benefits that we bring to suppliers through providing bespoke flexible funding solutions to their end users.

Our recommended solution for suppliers is a Branded Finance Solution, which provides suppliers with a fully integrated solution that helps to close sales in situations where capital is unavailable, making it easier for customers to transact with them. We undertake a full assessment of both the supplier’s and customer’s requirements and then tailor a dedicated financial sales support facility specifically for that sales transaction to ensure positive outcomes for both parties.

What SAF can offer:

  • We provide day-to-day support to the sales teams of suppliers, which includes general finance queries, branded quotations, attending internal sales meetings, and assisting their customers when required.
  • We  attend customer meetings (as part of a supplier’s sales team), providing financial expertise that assists in understanding the key drivers and nature of a transaction and provide financial insights to support the sales process of a supplier.
  • Our extensive knowledge of the NHS and private sector allows us to  provide full support if a project has stagnated due to a  lack of capital.
  • We offer the assistance and production of supplier-branded marketing material, ensuring that the supplier’s finance solution is as informative as possible.
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