Are pets replacing children? I don’t know.. But I know there’s huge money to be made

Hey, welcome back!

I’ve got to say, I’m pretty stoked for this one, it’s an industry that’s been on my radar for a long time and I think you’ll be blown away by what we uncovered.

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Here’s what we’ll dig into today…

• The multi- billion dollar per year pet industry, and the profitable business models (from food to supplements to doggy day cares)

• A breakdown of why this industry is one of the most profitable

• A look at the trends and numbers driving this crazy demand. Lets jump in 👇👇

💰People Are Spending Big Money on Their Newest “Family Members”…

Over 65 million american households own a dog and over 46 million share their home with a feline friend. Less Americans are opting for children at the moment and instead choosing to spend more on their pets in 2024.

The pet industry is expected to grow from roughly $350 billion today to nearly half a trillion (500 billion.. with a B!) by 2030. We’ve captured some of the high demand products below…

Let’s start with supplements and joint health. As dogs get older they fall victim to the same ailments we do, and fortunately many supplements and meds have been developed for them. Below is the trending growth for joint health and the joint supplement brand Cosequin.

Cosequin for Dogs:

Dog Joint Supplements:

Both of these searches are growing by 100% year over year, and many owners are willing to pay big money to ensure their pets live a comfortable life. We see huge potential and continued growth for supplement and health brands for the pet industry.

Just how big is the opportunity?

One supplement and consumable brand named Zesty Paws recently had an exit for over $600 million. It’s not quite as profitable as writing free newsletters… but for good for them!

A little bit later, we’ll do a deep dive into the different distribution methods and just how profitable this industry really is compared to others.

Now, lets jump into a different business model..

Doggy Day Cares Might Be the Most Underrated Gold Mine…

A company called Dogtopia offers franchising opportunities for their daycares and the numbers were quite shocking.

While there will be start up costs and franchising fees, we don’t come across many businesses grossing $600,000 in their first year 👀

The last brand and product we wanted to showcase is super interesting.

A company called Alpha Paw that grossed over $20 million per year selling Ramps for Dogs.

It’s genius.

Tiny dogs can’t hop onto the couch or bed, and older dogs with bad arthritis need some help hopping up as well.

The idea is about as simple as it gets, but I love simplicity when the value proposition is there for the customer. No need to reinvent something crazy - solve a problem and sell the solution!

A Deep Dive into the Numbers

Something that always shocks me is the wide range of profits and cash a business makes depending on it’s industry. 2 companies can both sell millions of dollars of products via ecommerce, one in pets, the other selling headphones - and one has millions in their bank account, while the other has nothing.

The image below is a survey breakdown from a business group called Hampton. They spoke with ecom sellers from various industries to get an understanding of their profit margins. As you can see below, pet businesses came out on top while electronics had a rough year in 2023.

The lesson? Be selective about the industry you’re entering. Marketcap and industry growth is great to understand the revenue upside but you can’t pay the bills with revenue and marketcap.

Some Ad Inspiration (Our Favorite Ads We Came Across to Get Your Marketing Juices Flowing)

First Time Founders Focus on Product, 2nd Time Founders Focus on Distribution

Before we look at starting or investing into a new business, we first look for distribution advantages. Where can this product be sold? Will we be 100% reliant on Amazon FBA to move products? Or can we sell via our Website, Retail stores (in this case pet and grocery stores) as well as Amazon to supplement the income?

A distribution advantage is probably the number 1 factor you’ll want to consider before starting a business. Here’s a quick breakdown of a strong distribution advantage and moat:

Let’s say you’re a great facebook ads marketer. You can scale your ads profitably and make thousands of dollars per day in revenue from sending Facebook traffic to your shopify store.

From there, customers will also be looking for your brand on amazon. Many customers will only shop on amazon because they’re already paying for prime and trust the shipping and returns process.

You’re now in a very unique position where you have sales coming from 2 online sources and 100% proof that your product sells well, this is less risky for a retail buyer to buy your products and sell in their stores. In fact, they want products that are doing well online as they’re constantly worried about being left in the stone age from online shoppers.

Distribution can play to your advantage in a big way, but you must map it out beforehand to have it working in your favor.

That’s it for this week! Hope ya enjoyed it, and as I mentioned before, please drop us some feedback below. I’m always looking to improve and provide the best insights possible.

See ya in the next episode..

-Ken

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