6 reasons why you cannot miss the pet care industry pet-businesses

6 reasons why you cannot miss the pet care industry

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Introduction

While there are many reasons why some businesses succeed and others do not, one of the most important factors is choosing the right industry at the right time. One of the industries that many investors and aspiring entrepreneurs are betting heavily on today is the pet care industry, and Petionship will outline six important reasons why.

1. The pet industry is recession-proof.

Alexis Perakis-Valat, former CEO of L'Oréal and now a member of its Global Management Board, explained why he chose the cosmetics industry. He said that while there were many other reasons, the most important one for him was to choose an industry that would not be affected by the recession.

As it turns out, during the recession and the COVID-19 epidemic that has ravaged the world in recent years, the pet industry seems to have defied all odds and so far has been minimally affected by the economic crisis.

2. The pet industry is predictable.

Every entrepreneur's and investor's nightmare is to have a business that is heavily influenced by the seasons. Seasonal demand limits cash flow to a few weeks of the year, which means you need to build up inventory based on estimates of future demand. There is no doubt that this is not an ideal business model. However, there is a difference between a seasonal product, and a product that has seasonal peaks while having relatively predictable and stable demand.

Predictability is more valuable than high demand during Halloween (e.g., clothing stores) or Christmas (e.g., Christmas tree makers) because it reduces the risk of having too much inventory and allows merchants to plan for the long term. Looking at the traffic data from Google trends, the pet industry has a peak in December, but maintains a steady base level of demand throughout the year.

3. The cost of customer education in the pet care industry is relatively lower.

If you have been following entrepreneurship-related reality shows such as Shark Tank, you will find that there are innovative products and services that are not actually being invested in. The reason is that these projects need a lot of money to educate customers, to educate the market, to educate them about what the product does and why it is so important.

In stark contrast, the vast majority of new pet products don't require any explanation at all. Pet owners already know what these products do and what they are intended to do. Pet owners need to buy pet health care products, pet training supplies, pet toys, pet food, etc. for their pets. They are happy to give a new product a chance and hope that it will benefit their pets.

4. The pet industry has benefited from Kinderschema.

Konrad Lorenz, an ethicist and biologist, has studied what characteristics make things appear cute to us. This set of features is now called the Kinderschema, which describes the ratio of the head to the body, the position of the eyes (below the midline of the head), and the size of the eyes in relation to the size of the head, among other things. The idea behind Kinderschema is that we are all hardwired to find things cute whether we want to or not.

One of the reasons children and pet products appeal to so many entrepreneurs and investors is that these industries benefit tremendously from Kinderschema. We are attracted to puppies, kittens or any young animal because they have the perfect Kinderschema. big eyes, big brains, the right head to body ratio and other features that we subconsciously find adorable.

5. The pet business has significant profit margins.

As in our previous blog post on Petionship How profitable is a pet shop, we have mentioned that pet shops, pet supplies stores, pet services, grooming salons and other pet businesses have a way of evaluating profitability that is specific to the pet industry. For the retail industry, you want to have a product, service or business that has an average profit margin of 60% or more. While most dog and cat food margins are around 50 percent, the most popular items such as dog chew toys and bones have margins as high as 70 percent. Pet food accounts for a little more than one-third of the entire market, with more than $50 billion spent on pet food worldwide each year. Dog collars, clothing and other high-end accessories also have large profit margins, which helps pet stores or pet businesses maintain high average profit margins.

6. The pet care market is always growing.

The pet industry is not only attractive to retailers, but also to service pet businesses such as pet grooming, pet training, and pet boarding. The global pet market is expected to show a phenomenal growth of 28.11% in 2020. The pet market is expected to grow from $222.93 billion in 2021 to $325.74 billion in 2028, a compound annual growth rate of 5.6% over the period 2021-2028. This means that not only will more pets need to be fed, accompanied, groomed and boarded, but pet owners will continue to spend more and more money on them.

The average dog owner spends about $1,641 per year and cat owners spend about $1,125 per year. Less than two-thirds of the cost is spent on veterinary care, and the remaining two-thirds is covered by pet supply retailers and pet service providers.


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