The Power of Paws...Online

Man's best friend may no longer be interested in his human buddy--because the Petflow delivery guy--with the dog's food in tow is looking like a pretty good (even better) option.

Earlier online companies, most notably, rose to the height of pet supply success—and then fell to the depths of the doggie world. But the newly built, online startup Petflow is taking a different approach, with a Netflix-like subscription model that offers scheduled food drop-offs based on the customer's request.

“Other companies would charge more for subscribing to get a recurring delivery of food then to just order one shipment at a time,” explained 34-year-old Alex Zhardanovsky, co-founder of Petflow. “So that was sort of the opposite of what made sense for consumers.”

There also weren’t enough products available, said Zhardanovsky, whose company has over 140 brands, and often the companies had you pay a high fee for shipping. That, he said, again didn’t make sense for the customer.

“People don’t want to pay an additional cost for products. They want to pay a reasonable cost that they would pay at the store,” he said.

Watch the Petflow video here

Which is why Zhardanovsky, along with his co-founder, Joe Speiser, decided to dig into the pet world in July of 2010—and into an industry that has pet owners spending an estimated $53 billion in 2012 on their furry friends.

“People don’t want to pay an additional cost for products. They want to pay a reasonable cost that they would pay at the store,”

- Alex Zhardanovsky, Petflow

Prices, Zhardanovsky said, compare with what customers would be paying at a local store. They have a $4.95 fee for purchases under $59 dollars, but he said their average consumer spends about $80 dollars.

“We make less on each shipment, but we can count on many shipments to that customer over the lifetime of their pet, so it makes sense for us to offer it that way,” he said. So far, Petflow has received $10 million in funding and has about 5,000 products on the site. The company, which is now nationwide, has already sent out over 250,000 shipments and is projecting revenues of $30 million in 2012.

But these two are not strangers to success in startupland. They built multimillion-dollar online-ad agency Azoogle Ads, before selling part of their stake and leaving the company in 2005.

“We’ve been growing month over month between 10-20%, and we’re hoping to accelerate that growth this summer,” said Zhardanovsky. “The difficult part is you may grow as quickly as you want, but you need to have all the logistics squared away in order to keep up with it because if you can’t deliver, then you’re likely to be out of business fast. So we temper our own growth so we can fulfill on the promise that our customers want.”

And in this case, you know when your ultimate customers are happy. Just watch their tails.

Follow Christina on Twitter @ChristinaScotti

Six Shooter with Alex Zhardanovsky and Joe Speiser:

What is your favorite quote and why?

Zhardanovsky: "Hope is not a strategy." You need to always have a plan because good things happen to only those that know exactly what they're doing and what they need to do to achieve their goals.

Speiser: "Choose a job that you like and you will never have to work a day in your life."Balancing a successful work/life schedule is infinitely more successful when you are doing something you love.

What is your biggest tip to entrepreneurs?

Zhardanovsky: Believe in yourself. No one can tell you whether you can or can't do something.

Speiser: You miss 100% of the shots you don't take. It's important to bet on yourself, and take risks. Try not to listen to all the noise your friends and family may generate.

You both are very tech-savvy. What is the biggest misconception small business owners have when starting an online component to their business?

Zhardanovsky: Most people believe that starting an offline business is more difficult and much more expensive than starting an online business. The reality is an "online" business takes just as much human and financial capital as does a brick-and-mortar one. So, in order to make an online component of a business successful, you need to ensure that you're willing to dedicate financial as well as human resources to make it a success. Otherwise, it is doomed to fail and drag down with it your brick-and-mortar business due to lack of focus.

Speiser: Many small businesses think running a successful online component requires hot-shot marketers with years of experience.  The truth is with all of the online tools, networks and support groups, it's much easier to jump into the online world now more than ever.

Were you nervous going from the advertising industry – to the pet industry?

Zhardanovsky: We were in a unique position of knowing what needs to be done to both start a company as well as advertise that company's services effectively, so we thought we had a high chance for success. However, investing such a large portion of our personal net worth into a new and unproven idea was quite nerve-racking.

Speiser: No, when you believe in an idea as strongly as we did, you can't believe no one has done it.  It becomes as clear as day.  All your energy and attention goes into the launch and early growth, there wasn't any time to be nervous.What is the future of Petflow?

Zhardanovsky: As we continue to grow, we hope to be the place synonymous with all things pet-related.  When our customers may need food, treats, toys, or even a cute coat for their Chihuahua, we want PetFlow to be the place they go to find them.

Speiser: will become synonymous with convenience and customer service. Our goal is to make purchasing pet supplies online both mainstream and easy. We are already on the way of becoming the largest retailer of pet food and supplies online.

It’s estimated that people will spend nearly $53 billion on their pets this year. Why do you think that is—and do you think it’s excessive?

Zhardanovsky: Our pets are just like our children. They show us unconditional love and affection and if we keep them happy, they'll keep us happy.  So, we try to pamper them as much as we can.  As our pets continue to become a bigger and bigger piece of our lives, we will continue to spend money on them. So we think the number spent can only keep increasing.

Speiser: As we start taking better care of our own bodies, it's only natural we will continue to treat our pets with that same love and respect.  The pet industry is not only recession proof, but also constantly growing. We couldn't be more excited to participate in any other space.

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