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 provides.
The income percentage is different in different stores, for now, there are no fixed revenue shares for these 4 services. There isn’t one shop making profits only by 1 service.
Even though the same brand, sales are different in different communities. Some shop’s revenue comes 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 thirds are retail and rest areas. 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 separated by transparent glass, customers can watch the whole process of grooming. There is some dirt on the glass and dust on the pet supplies. Maybe all these types of shops have this phenomenon. The flavor and noise are obvious in this pet store.
Shop Assistant:
There are 2 in this shop, both are bosses, both can do grooming. If one person is out, and the other is busy, so they can not do the guest’s receptions.
Retails:
This shop mainly sells 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, an estimate of 30-40. But the pet staple food is fewer. There also some imports pet food, just for display because of the short shelf life.
Pet grooming:
The price of 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 is a total of 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:
Revenue:
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 a few shops have 7:3.
Gross profit:
According to the boss’s introduction, staple pet foods’ gross profit is about 20%-30%. Snacks are 25%, but there are also some hot selling products that only have 5%. Pet supplies have 40%-50% gross profits. So the overall gross profit is about 30%.
Cost:
This shop invested 350 thousand RMB before opening, including the rent 170 thousand RMB. Now the rent is about 240 thousand RMB. Adding labor, rent, water, and electric, the average cost is about 1 thousand RMB every day. 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 investment is 350 thousand, except for the rent 170 thousand, the estimated decoration and equipment cost is about 120 thousand RMB. Assuming that the decoration and equipment 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 of 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 miles around, and the guest unit price is low, so the best situation is about 60 thousand to 70 thousand. The consumer groups are 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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