Remember how Pets.com crashed and burned in late 2000 during the dot com bubble?
Well, they are back; at least a modified version! Pets.com version 2.0 is bringing back that “solid” business model to this new decade.
Petflows.com Inc. is a Manhattan start-up that has raised $10 million in their first round of venture capital, and now ships one million pounds of pet food a month. If you don’t believe me, check out this link: http://online.wsj.com/article/SB10001424052970204778604577240261600840678.html?mod=WSJ_hp_MIDDLETopStories
If you didn’t know that Wal-mart and Petsmart already sold food pet food online (I did not), newsflash. It seems like selling pet food online is a new industry that has potential to grow moderately in the future. Petflows.com conveniently delivers high-end pet food for a convenience fee.
Their model is shaky. Shipping heavy bulk items is still expensive, and the only costs that have decreased are start up costs. The company is growing smart, but they are competing in a low cost environment. Wal-mart and Petsmart, definitely, have an advantage here due to their economies of scale and massive retail channel support. Petflows.com says its subscription model makes it easier for the customer. You get to choose at what interval you want your food delivered. They are losing money right now, but their sales are forecasted to increase this year.
In the end, it’s all up to the customer. After all, we learned in economics that whenever there is demand, there is supply!
I don’t think I would buy pet food online. I don’t see why my pet gets to eat organic fancy food when I don’t get to eat it. You might have a different opinion, though.
So, would you buy pet food online? Why or why not? If yes, how much would you be willing to pay for that convenience?
SavvyFinancialLatina
Savvy Financial Latina 