In China, there are about 30000 pet stores, most of them are community shops. Many of the community shops are family-run. Most of the pet stores are small than a small supermarket,except the pet food and pet supplies, these pet stores also provide pets selling and foster caring services. So there are 4 services that one pet store provide.
The income percentage is different in different stores, for now, there are no fixed revenue shares for these 4 services. There aren’t one shop making profits only by 1 service.
Even though the same brand, the sales are different in different community. Some shops revenue come from pet care, some shops profit come from retails.So we will analyze the shops of community, shopping mall, direct chain and franchise chain.And by the 4 services analysis,we will show the profit structure and business portfolio. We hope our analysis guide can help someone know more about how to open a profitable pet store.
What is the profits ceiling of community pet stores?
We visited a pet store in Peking, the service person in the stores are a couple, so we called this kind of shop mom-and-pop store.
How To Open A Profitable Pet Store-Location:
This store is on the street, it’s community bungalow with 40 square meters. The pet caring and foster caring occupy a third in total. And the left 2 third are retail and rest area. There are several universities and communities around, and only 2 pet stores within 1km.
To Open A Profitable Pet Store-Environment:
This store opened 3 years ago, so the decoration is not very new. All the goods shelves are placed against the wall. The rest area is in the middle, there is 1 sofa for customers resting, it’s not very crowded overall. Pet caring area is separted by transparent glass, customers can watch the whole process of grooming. There is some dirty on the glass and dust on the pet supplies. Maybe all these type shops has this phenomenon. The flavor and noise is obvious in this pet store.
There are 2 in this shop, both are boss, both can do grooming. If one person is out, and the other is busy, so they can not do the guests receptions.
This shop mainly sell the pet snacks, pet staple food,pet supplies.We are the pet supplies manufacturers, you can check the pet supplies on our site. There are many snack species and brands, estimate of 30-40.But the pet staple food is more fewer. There also some imports pet food, just for display because of the short shelf life.
price for washing a small dog is 45¥，member price 40¥. Price for pet grooming 140¥, member price 120¥. Pet fostering price 40¥/day, member price 35¥/day. There are total 18 pet cages. The pet caring is mainly for small dogs, according to a survey, Teddy and Pomeranian take up to 30% in China’s pet dogs.
Let’s see the revenue and expenditure of this store:
the operating income is about 50 thousand rmb, retailing and pet caring each takes 50%, there is also a small part of pet fostering. According to the analysis, the retailing and pet caring revenue ratio is also 5:5,6:4 or 4:6, only few shops has 7:3.
According to the boss introduction, staple pet foods gross profit is about 20%-30%. Snacks is 25%,but there are also some hot selling products only has 5%. Pet supplies has 40%-50% gross profits. So the overall gross profit is about 30%.
This shop invested 350 thousand rmb before opening, including the rent 170 thousand rmb. Now the rent is about 240 thousand rmb. Adding the labor, rent, water and electric, the average cost is about 1 thousand rmb everyday. So the total cost is 30 thousand every month. But we calculated the gross profit is only about 30 thousand rmb(25thousand*100%+25 thousand*30%),so the net profit is less than 10 thousand.
The ivenstment is 350 thousand, except the rent 170 thousand, the estimated decoration and equipments cost is about 120 thousand rmb. Assuming that the decoration and equipments as 5 years straight line amortization, the monthly cost allocation is about 2 thousand rmb.
So just as many other mom-and-pop shops, if not calculate their salaries, there are about 10 thousand to 20 thousand revenue. But if calculate their salary, the result is just a balance. On the whole, this shop is at a micro profit state.
To ordinary community pet stores, the 50 thousand revenue is already good. Because to an ordinary pet store, the turnover will be saturated after 60-70 thousand rmb.
Take this store as a sample, it has opened for 3 years, there are 300-400 members now. So it almost covers all the pets within several mils around, and the guest unit price is low, so the best situation is about 60 thousand to 70 thousand. The consumer groups is limited, this might be the traffic bottlenecks that all the community pet store will meet. Because one community shop can cover 3km around, and there are only hundreds of pets in this range.
But if the traffic is fixed, how to improve the revenue? We will share in the next post.
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