Transparent sourcing

Curse and blessing

Transparency is both a curse and a blessing for consumers, shops, wholesalers, importers, manufacturers and service providers. At this moment consumers seem to draw the longest straw. When sourcing for pet food, accessories and so on, they could go to their local shopping street or do a Google search. Quality, pricing, delivery… everything can be compared and ordered at the click of a mouse.

What’s your current added value?

Whereas this extreme transparency might appear like a disadvantage for many players in the pet industry, the opposite is the case. How do you turn obstacles into opportunities? I will tell you: it’s all about ‘added value’.

The added value of pet shops and the entire supply chain was stable for decades. But not anymore. Transparency, brought on by the internet, forces us to reconsider the actual added value of each player in the value chain.

Vanishing industries

In the music and film industry, as well as among publishers of books, newspapers and magazines, most players underestimated the impact of transparency. They failed to realise that the pattern of sourcing was changing dramatically. This resulted in ‘vanishing industries’: entire value chains disappeared. This could have been prevented if they had adjusted their model of sourcing and selling in time. Let me show you how to prevent such a doom scenario for the pet industry.

Opportunities for the pet industry

Procurement determines your margin, so sourcing is key in providing added value. The pet industry is still mainly product-oriented, while other industries are already making the shift into service-oriented strategies. When considering such a shift, it is best to start with subscription-based models. First of all, because this is what consumers want. Go for convenience! When it comes to their pets, only the best is good enough. Most pet owners are loyal to their favourite brands. So make it easy on them, by providing a subscription to the pet products they need on a regular basis. This service, which couldinclude home delivery, will strengthen customer contact and increase customer loyalty.

Why is a subscription model good for sourcing? Because you can estimate exactly the number of products you will be selling via these subscriptions! The discount margin with these large numbers is interesting, too.

Learn from the neighbours

However, the subscription model is just a start for upselling and cross-selling to your customers. It also gives you the opportunity to surprise customers with free sample products. I would say: learn from theneighbours who are more experienced. Let me give you a few examples.

The Beauty Subscription Boxes (by RealSimple.com and others) are a tremendous success. People love to receive their favourite makeup, nail varnish and so on by mail. And what about a subscription service for… socks. Yep, SockFancy.com delivers awesome socks on a monthly basis. Hadn’t you heard about his service? Trust me, from now on you won’t be able to live without it. Another example is BookBox. This Ukrainian startup delivers three books in a box that match the profile of each customer. Month after month its customers receive this surprise. What a business model! Included in the box are some extras, like coupons and something sweet to eat while reading. The founder of BookBox was surprised at how fast his revenue was growing. He discovered that most customers started to buy BookBox subscriptions as a present for their friends. That was an unexpected multiplier. Learn from these examples and translate it into pet products and services.

Search for niches

Niche is nice, as long as it’s a niche. Take a different angle in approaching new markets. Ever thought about targeting companies that have office pets?

More and more offices have one or more dogs, rabbits, cats or whatever. And as you may or may not know, cats are like potato chips: you cannot have just one. It is not a stretch to conceive that enterprises with office pets are used to ordering all of their supplies, like paper and ink, on a regular basis. Most are already familiar with the idea of a subscription model. So, contact the owners of these office pets and start delivering food and accessories to them. And take into account that these office pets have a special position in the office ecosphere. Sometimes, they even have their own little office, like the cats at high-tech startup Mac Paw.