Are you killing your pet business? You may be. Over 10 years of experience in the pet industry has taught me that if you are doing the following 5 things you may be squeezing the life out of your pet business. Do any of the following sound like you?
1) Not understanding the Market for Your Pet Product – you need to know what the real potential for your product is. For example, you have a hotspot remedy. Great! Now, how many dogs suffer from hotspots? If you don’t know, you shouldn’t develop a product for it. All product development efforts should start with knowing how many people could potentially purchase your product. You should have a good estimate of units and dollar volume. So in this example, if you find out from a reliable source that 25% of dogs suffer from hot spots in any given year then your potential volume could be 78 million dogs (source: APPA) X 25% = 19MM. So if EVERY dog owner buys your product the total volume potential is 19MM and if you sell your item for a retail of $4.99 the total dollar volume is $97MM. Now not EVERY person is going to buy YOUR product for hotspots. There are a lot of other considerations. How many people will simply do nothing or visit their vet… but I would say you could turn it into a $1MM+ business if you do everything else right.
2) Using Cost Plus Pricing for your Pet Product – This is a common mistake of inventors or first time entrepreneurs. You take your cost, let’s say $3 and double it for a 50% margin, 100% markup for a cost to retail of $6. The retailer doubles it for another 50% margin or 100% markup for a retail price to consumers of $12. Makes perfect sense right? A 50% margin is healthy for a startup – maybe too healthy. Most operate at breakeven or even a negative gross margin for the first year or so. Back to our example… your item is now $12. Problem? Your competition or comparable items are all $9.99 or less. This is a big problem. The retailer WILL NOT CUT HIS MARGIN TO SELL MORE OF YOUR PRODUCT. It is your responsibility to price your item right. Most product companies are based on economies of scale – sell more and your manufacturing costs drop. Keep that in mind. You should use the retail price you believe the ultimate consumer will pay and work backwards to your cost. If you can’t get the product for that price then either work at a loss for awhile to build volume or don’t get into the business. Look for something else to make or go get a regular job.
3) Not doing any Marketing Research for Your Pet Product – I’m sure you think your product is great. If you didn’t you wouldn’t have created it. I’m also sure IT IS great. However, just to be sure ask some people what they think. Ask your neighbor your co-working or friend. Show them the product in its packaging and simply ask would you buy this product for X? X= estimated retail price point. Now if you want to go further use Survey Monkey and create a more formal survey. You can post the link on your Facebook page and Tweet about it. Try to get around 100 people to take the survey. Show a picture of the product with a few sentences explaining what it does and include the suggested retail price point. If you are worried about secrecy just use a text descriptor to give a general overview of your product. Ask some questions about it and see if the responses are as enthusiastic as you expected. Research doesn’t have to be expensive, but it is essential. The best part is if the results are positive you can use them for your retail sales presentation.
4) Not Developing Enough SKUs – This is a recurring theme in my blog posts and pet marketing video lessons. I keep repeating it so it eventually sinks in. I am going to repeat – MOST 1 SKU PRODUCTS WILL FAIL. It’s simply not worth a buyer’s time to do the paperwork for 1 SKU. In addition, the buyer knows it won’t do well. Why? It will get lost on the retail shelf and never be found. It’s not that hard to develop more SKUs. Think large, medium and small size. Different flavors, different scents. A good rule of thumb is to shoot for 10-12 SKUs to create your product line and “brand block” on shelf.
5) Not Getting Help Early Enough – I have many prospects take advantage of my FREE ½ hour consult. What I hear more often than not is that tens of thousands of dollars have been spent with little or no results. Don’t be one of these prospects. I have spent the last 20 years (the last 10+ in the pet industry) making mistakes and doing testing. Take advantage of my mistakes! I know what works and what doesn’t. I am sure you are really smart, but it takes awhile to understand the pet industry and how to successfully introduce a product into the market.
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Tags: pet business
A few more pointers …
when you call on my store, either with or without an appointment, bring the printed materials and have more information than ” duh I have this dog bed. They’re really nice. They sell well in Los Angeles”.
I need a printed price list.
I need good descriptions and photos of your product.
I need to see a swatch book.
I need to see samples that I can touch and feel.
I need to know who is selling this successfully.
In the best of all possible worlds, you wouldn’t have to waste your money and energy dragging paper around. But — I’m a retailer. I work on the go. I don’t have time to fire up my laptop and search for your pricelist, your website, and all the pretty little stuff that marketing created. That only works on the plane home from the trade show. I need hard copies. At least this year and probably next and perhaps beyond. I certainly don’t have time to figure out if the cute little mini disc is going to play in this computer or that computer. Hard copies. In my hand. That I can read while I am in line for coffee next door.
Don’t lie to me about shipping costs. If it’s $15/bed I need to know that upfront. I don’t get to set a price and then tack shipping on …. I need to know all my landed costs up front.
And don’t lie to me about display options. If you have a little cardboard stand, tell me it’s a little cardboard stand that only works for one size and style of bed — especially when I am buying a different style of bed from you. Don’t walk in my store, disparage my bed display, tell me that *your company supplies display stands” and then send me some brown cardboard box foldie thing and claim that’s a high end display stand.
This probably comes off as a bit of a rant, and it is. But everything in my rant is true — and it’s not just one rep that’s “selling” like this, and it’s not just dog beds.
And one more pet peeve — please please please don’t name your product after your dog. Come up with a creative name that makes sense. That’s memorable. That we’re not going to be calling “Crate and Barrel” when your real name is “Christa and Barney.”
Great feedback Connie! We should do a co-video/blog post! Manufacturer and Retailer point of view! Interested?
Great reply. In general it is always best to consider the other persons needs.
The pet peeve line made me chuckle………