New Sites Unleash Pets.com2.0

New Sites Unleash Pets.com2.0 The economics of Internet commerce have changed so much that Alex Zhardanovsky is now taking on the once-seemingly impossible challenge of selling pet food online. com did. Using what are known as cloud-computing services costs hundreds of dollars a month or less, compared with servers that can cost thousands of dollars. "It's one of the only industries that lends itself to a subscription-based delivery system," he said. Zhang. "Probably not. " The online pet-supply stores also say they are taking a different approach than Pets. com sprouting just in the past few months. Backed by top venture-capital firms and perhaps by tech heavyweights including Amazon. Zhardanovsky said, is that it works on a subscription model. Ms. Chewy, based in Miami, launched in September and expects to record $5 million in sales for the month of December, up from $1 million in January 2011, said co-founder Michael Day. Wag. com, run by Amazon subsidiary Quidsi Inc. , launched last July. 1 million Americans with entry to broadband Internet at home or in the office, compared with 48. com spent more than $25 million on advertising, including a Super Bowl commercial and banner ads on sites such as Yahoo Inc. did. Now, while pet food remains heavy and expensive to ship—one reason that Pets. com failed—the cost of almost every other element of starting an online-retail business has plummeted. com and Wag. He said 50% to 60% of clients automatically enroll to have pet food delivered to them on a regular basis, such as once a month. "Dogs need the exact portion of the accurate same food every day," he said. com declined to disclose its financial data. Many online-retail experts say the online pet stores can be profitable, but are skeptical they will ever become booming businesses. Forrester Research estimates U. PetFlow is part of a new litter of Web-only pet-supply stores that have emerged in recent years, with some such as MrChewy. Instead of setting up its own warehouse, which Mr. Zhardanovsky said would have cost $1. . "Would we have been able to do this a decade ago?" said Mr. Zhardanovsky, who plans to seek another round of venture funding in the next year, said he calculated that in the long run, continuing with a third-party warehouse provider would be more expensive than having PetFlow operate its own warehouses once it started shipping an ideal volume of orders. Mr. Zhardanovsky acknowledges the online pet-supply businessremains hard—something he's reminded of every day by the Pets. com, said the company uses robotic technology to speedily move around cat or canine kibble, which helps reduce labor costs. com sock puppet that he put on the shelf across from his desk. com, which sold low-end food and perhaps higher-end products. PetFlow, Mr. Chewy and Wag said they all focus on convenience over price, and they carry mainly higher-end, gourmet dog food because the more expensive products are higher-margin. Even Wal-Mart doesn't carry much of the cheap stuff online. , a Manhattan start-up that has raised $10 million in venture capital and that now ships one million pounds of pet food a month. com was "ahead of the time," said Mr. " Still, PetFlow and Mr. 2% of overall commerce was online in 2000, compared with 7. 2% today, Forrester said. Wainwright said she had two people on call at all times to maintain Pets. "We want to prove that the pet category can be successful online," said the 34-year-old entrepreneur, who said he expected his company to break even by the second quarter and have sales of $30 million this year, up from $13 million in 2011. That lower-cost model has enabled others to jump into the pet-food space online. online sales of pet supplies will reach $4. David Zhang, site manager for Wag. New Sites Unleash Pets.com2.0 Trade News selected by Local Linkup on 06/03/2012