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Mississippi native a leader in health care e-commerce

When Jerry Hayes was growing up in the tiny Mississippi town of Shuqualak, located between Meridian and Columbus on U.S. 45, he set simple goals of becoming a clinician. Instead, Hayes, an optometrist who now lives in Florida, far surpassed those goals when he founded the leading e-commerce B2B (business to business) site in the optical industry over which he presides.

“My dream was to be a health care practitioner,” Hayes said. “My mother was a nurse, and I really wanted to be a clinician.”

After graduating from optometry school, Hayes purchased a practice in Vicksburg, where he stayed from 1973 until 1987. In the 1980s, he started Hayes Marketing in his home. In 1990, Hayes moved to Florida to open a contact lenses distribution center. Three years ago, he sold the catalog division to Medical Arts Press but continues to operate the buying group out of Vicksburg.

In early 1998, Hayes began developing E-Dr. as a division of HMI Buying Group Inc. and started taking orders in August. Last summer, he formed E-Dr. Network Inc. as a subsidiary of HMI Buying Group Inc.

“E-Dr. Network is the first mover and Internet sales leader in the U.S. wholesale market for contact lenses, eyeglass frames and spectacle lenses,” said Hayes, CEO. “The company’s mission is to create the dominant e-commerce platform for the highly fragmented $25-billion worldwide optical market.”

In December, the leading e-commerce B2B site in the optical industry received $8 million in venture capital financing led by Atlanta-based Noro-Moseley Partners, with a co-investment from Calif.-based Benchmark Capital, one of the nation’s largest venture capital firms. E-Dr. Network Inc. represents Benchmark’s first partnership in the Southeast, and its first Florida investment. E-Dr. Network is also collaborating on a marketing plan worth $30 million with CibaVision, the Duluth, Ga., eyecare division of Swiss drug czar Novartis AG. CibaVision also made an undisclosed equity investment in the firm.

“This investment enables us to increase our marketing efforts and to continue improving our technology and service offerings,” Hayes said. “It will further establish E-Dr. as the No. 1 e-commerce provider in the vision care segment.”

In 1999, Jacksonville Beach, Fla.-based E-Dr. Network documented 40,000 online orders and listed more than 3,000 registered users with a growth rate of 15% per month. Eyecare professionals join at no cost and can order supplies from more than 90 suppliers 24 hours a day, seven days a week. A support staff fluctuates between 30 and 35 employees.

“E-Dr. Network is the Internet leader in the vision care industry,” said Allen Moseley, a partner at Noro-Mosely. “Their solution is an excellent e-commerce application and provides better service at a lower cost, while eliminating inefficiencies existing in the current supply chain process.”

In the U.S., more than 45,000 offices are staffed by dispensing optometrists, opticians and ophthalmologists that order optical good from hundreds of contact lens manufacturers, eyeglass frame importers and optical lens laboratories, said Matt Paumen, president and COO.

“The typical office will order products as they see patients, often 10 to 20 times per day by phone and fax,” he said. “This ‘just in time’ ordering process is highly inefficient and time consuming for the dispenser.”

E-Dr. Network provides a “one-stop shop” point of entry that allows optical dispensers to access information and order name brand products from multiple suppliers at one easy-to-use Internet site, Hayes said.

“Eyecare professionals like the consolidated ordering and record keeping functions, volume discounts and single monthly bill,” Hayes said. “Suppliers realize significant efficiencies by receiving orders over the Internet versus over the phone.”

Future plans call for the development of a comprehensive practice management system that will allow optical dispensers to integrate the ordering function with inventory control, accounting, patient records and filing insurance claims, Paumen said.

“E-Dr. recently signed a four-year worldwide co-marketing agreement with CibaVision, a Novartis company,” he said. “Beginning (last month), the 100-person CibaVision contact lens sales force will promote E-Dr. Network to eyecare professionals and sign up accounts for E-Dr. in the U.S.”

B2B e-commerce is expected to grow from $109 billion in 1999 to more than a trillion dollars by 2003.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or mbj@msbusiness.com.

About Lynne W. Jeter

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