My Pet Warehouse CEO on running a profitable online business

octomedia

27th Apr 2016

When My Pet Warehouse launched its online store in 2011, CEO and founder, Philip Bartholomew, admits they weren’t sure how it would make a profit.

“We were like everyone else, we’d looked at doing online as far back as 2004 … we couldn’t work out how you make money in 2004 and to some extent we are still working out how to make money in 2016,” Bartholomew jokes.

“You can’t send a parcel from one side of Australia to the other and expect to make a profit, and not charge the appropriate cost of freight.”

Online sales now account for around 55 per cent of My Pet Warehouse’s total sales, more than $20 million in annual revenue.

“Our online is profitable,” Bartholomew said. “Not widely profitable, but it is. How we made it was by the decentralisation of the freight and the other piece of it is, being vertically integrated — manufacturing our own goods.”

My Pet Warehouse has company-owned distribution centres in Sydney, Melbourne, Brisbane and Perth, covering 55 per cent of the population, to better manage the cost of freight.

Bartholomew is aiming to triple My Pet Warehouse’s revenue over the next few years, to anywhere between $75 to $100 million.

“The online business is explosive growth for us, there’s no question. But it is starting to normalise, where it won’t grow as quickly. [With] the amount of data we have, we know where all our customers are and we can pinpoint hotspots where we actually need to or where we should open stores.”  

My Pet Warehouse currently has 12 stores and would leverage online data to determine future bricks and mortar locations.

“We know where our customers are and it is much cheaper to have them walk in our front door than it is for a courier to walk through their front door,” Bartholomew said.

My Pet Warehouse has invested in training store associates to be more engaged with the online store, equipping them with ipads to show customers videos or a wider product range.

Online or instore, “it’s just retailing,” Bartholomew said. “Retail is very time-intensive, so you’ve got to work smart, work hard and always, always look after the customer.”

Bartholomew worked for his father in the discount variety industry for 13 years before opening his first pet supplies store in 2001, which was followed by a second store six months later.  

“Our competitor, Petbarn, opened up around the corner and I thought we were history. [But] we went from strength to strength,” he said.

In 2004 Petbarn bought Bartholomew’s stores and appointed him CEO of Petbarn, a position he held for just under two years.

The merged business was then acquired by Greencross in 2006, Bartholomew signed a three year non-compete agreement and re-entered the industry in 2009, founding My Pet Warehouse.

Now six years old, My Pet Warehouse is on track to reach $32 million in revenue this financial year.

This story first appeared in Inside Retail Weekly, click here to subscribe.