By Heidi Brown
These three savvy entrepreneurs saw opportunity in the pet craze and are running million dollar businesses.
The pet products industry is big business. Last year, for example, chain store PetSmart boasted sales of $5 billion. The industry as a whole is worth a whopping $45 billion, according to the American Pet Products Association (APPA), a trade group. This is an increase of 164% since 1994.The Price Of A Pet
Pet owners around the country have sniffed out this trend and are looking to cash in. That's because, like many domestic activities and hobbies--baking, scouting out real estate and the like--people often mistake skill and passion for a viable business model.
Despite the size of the pet market, barriers to entry are high. To encourage or prepare for even moderate success you need a competitive advantage and a unique niche. The big issue is not whether you love animals but whether you turn that love of animals into a profitable business.
The three women profiled here are doing just that: They approach their businesses strategically, thinking not just of their four-legged consumers but also of what their owners are willing to buy. Going after toys, food and medicine, these women are exploiting a market of 71 million households in this country that own a pet.
In the mid-1990s Christianne Schelling, 48, a veterinarian in Three Rivers , Calif. , was focused on the daily grind of X-rays, injections and flea dips. One day an assistant told her about Soft Paws--rubber nail-caps for cats that make declawing unnecessary.
Schelling, who opposes declawing, was convinced that Soft Paws were useful and potentially lucrative. She arranged with the inventor to sell them online, using a domain name, softpaws.com, she had wisely registered beforehand. She bought an order, hired some programmers to design a Web site and waited for the sales to pour in.
Schelling says it took "years and years" for the business to become profitable. "The day I had ten orders, I jumped up and down," recalls the UC-Davis graduate, who had no prior business experience.
Her next big hit was a line of nutritional pet supplements she developed called Vetraceuticals. She says that pet food, while healthful, doesn't provide all the enzymes and minerals that animals would get from food in the wild. She had been making her own concoctions to give to patients for years.
The Vetraceuticals model is clever, operating like a subscription. A customer signs up and is shipped the packets of powder monthly--ensuring the pet gets fresh nutrients in the right combinations and enabling Schelling to monitor future cash flow. Others like the concept too: She recently signed an agreement with a European distribution and manufacturing company for all of Europe ; regulators there are currently reviewing it.
More on pets from ForbesWoman:I Killed The Class Pet
Schelling no longer practices veterinary medicine, instead spending all her time running a $5 million-plus (sales) company with four separate lines of business, including Purrfect Pets, a scratching post that she orders from local workers. All her products are sold online only.
"The work I do is to improve the lives of animals," says Schelling. "Every product I deal with improves their lives and my finances."
Lisa Bershan, All-American Pet Brands
Lisa Bershan and her husband, Barry Schwartz, were poised to launch a small chain of cheese steak restaurants in lower Manhattan in September 2001. But when two jets crashed into the Twin Towers nine days prior to the grand opening, that plan was rendered impossible.
Without the safety net of government insurance (the restaurants hadn't opened before the tragedy), she and her husband had to come up with a new idea fast. The family dogs--a Shih Tzu and a bulldog--ended up being the inspiration for her new company, All-American Foods.
Bershan, who is in her early 50s, is a born entrepreneur. In high school she sold her mom's lunch sandwiches instead of eating them. In 1978, after graduating from the Fashion Institute of Technology, she started Incredible Edibles, a food company that grew to $30 million in sales within a year and a half. She sold out to Piedmont Foods in 1986 and spent the next 13 years running other small food companies.
Like the one-word advice to Dustin Hoffman's character in The Graduate--"plastics"--the byword Schwartz whispered into Bershan's ear was "breakfast." Although owners feed their dogs twice a day, no one calls the morning meal breakfast. Bershan and her husband launched a line of canine breakfast meals.
Working with an animal nutritionist at Cornell University , they concentrated on recipes. Next came two years of "palatability" tests on pets and the search for a product manufacturer and packager. She chose the name All-American out of patriotism after the attacks and to remind customers that her product is made entirely in the U.S.
Building a network of retail contacts, she tested the food in 7,800 stores and got precious shelf space for her product--with Iams, Eukanuba and Pedigree as competition. Her second act was a doggie low-fat power bar with four flavor varieties; the format allows pet owners to feed their pets on the go. According to Bershan, All-American has pulled down $50 million in sales since incorporating 2003.
Next up: breaking into the $10 billion pet pharmaceutical market with meds that dogs can eat instead of choking down.The Price Of A Pet
Lane Nemeth, Petlane
Lane Nemeth has done for pet products what Avon did for makeup: bring the product to the buyer through multilevel marketing. Nemeth, 61, from Concord , Calif. , didn't start her career with dreams of a pet business, but, like Bershan, she used the expertise she gained from running one business to succeed at the next.
In the 1970s Nemeth was working as a school director, buying quality educational toys in bulk for her students. But when she wanted to order the same pieces for her own daughter, Tara, she discovered they weren't available for individual purchase.
At first she wanted to open her own educational-toy store. But rather than using the Toys R Us model--and waiting for people to come to her--she decided to go the Tupperware route, naming her business Discovery Toys (no relation to the TV network).
By 1997 she was designing her own toys, working with factories in Asia and generating sales of $100 million; she sold to Avon .
Her foray into pet products began in 2004, thanks to her now-grown daughter's Cavalier King Charles Spaniel. Nemeth went out to buy clothes and toys for the dog but came back empty-handed. "I couldn't believe the garbage," Nemeth recalls.
At the time she was consulting for her old toy company. "I was on my way back from China and was with a co-worker," she says. "I turned to him and said, 'Am I crazy? I want to do for pets what I did for kids. I want to do a pet-toy company.' So we spent the 13-hour flight discussing." When they stopped in Hong Kong she talked to her old manufacturing partners, who were also enthusiastic about the idea.
"Dogs are just like toddlers," says Nemeth. "They need everything. Toys, clothes, food." After doing a year of research, Nemeth and her daughter, now partners, began designing merchandise for the new direct-sales company, Petlane.
Its breadth is enviable to most small businesses, as it sells everything from dental care and green cleaning products to litter boxes and squeeze toys. "With direct selling you don't have to do a lot of branding," she says.
Today Petlane sells products for nearly every kind of pet, including rabbits, birds and ferrets, with an emphasis on natural ingredients, and generates annual revenues of more than $1 million. She counts 2,000 sales agents and lots of happy pets.The Price Of A Pet
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