In the span of one average American lifetime—approximately 75 years—the puppy-in-the-window business model has gone from being a beloved Main Street staple to being an oft-scorned and visible reminder of the dark side of puppy sales.
That’s not to say that there aren’t successful pet shops out there thriving on puppy sales. The customer demand for puppies is still strong. But the reputation of these businesses has been frayed—perhaps irreparably and in some cases, deservedly so—by the rotten apples in the bunch.
Everyone in the business of breeding pets or selling them—no matter where they fall on the spectrum of responsible and caring to mortally cruel—now wears the taint earned by unethical breeders who have little regard for the health of the animals they raise and the retailers that wittingly or unwittingly sell them. So whether by choice or by force, many retailers are giving up on the puppy-sales business.
The question is: What happens next?
Some retailers are replacing “puppy for sale” signs with “adopt me” signs, as they transition from being puppy-selling pet stores to adoption-only models. Other retailers are replacing the revenue they once generated through pet sales by expanding their retail assortments and adding services such as grooming. But for some retailers, the loss of revenue sounds a death knell, either because an attempt to adjust the business model fails or because staying open is simply infeasible.
More and more retailers are staring at a future in which they too will have to figure out what lies beyond puppy sales—either through their own volition, or because legislation or local community pressures have backed them into it.
Here is a look at three possible outcomes:
Closing the Doors
Call it an identity crisis. When a pet store that has built its business on puppy sales is forced to abandon this revenue stream, what does it have left to work with?
Daniel DiGiacomo faced this dilemma last year when the city of Irvine, Calif., instituted a dog and cat sales ban that shut down his pet store’s way of life. “I was 31 flavors of ice cream, and now I can no longer sell ice cream at all,” he says. “All I can do now is sell Cokes and [empty] ice cream cones.”
DiGiacomo opened his Irvine store about 10 years ago. It was his second Russo’s Pets Experience location—the first was established decades earlier in Newport Beach, Calif. For years, it was fulfilling its promise as a traffic builder at the Irvine Spectrum Center Mall. So, when the city passed the ordinance banning dog and cat sales, the mall’s management asked DiGiacomo to stay on board as a supplies-only store, but he quickly determined that the conversion was unlikely to work.
For starters, he predicted that the overhead on the 28,000-square-foot space would make it tough to survive on selling pet supplies alone. Fearful that he would end up burdened with a lease he could not afford, DiGiacomo wanted to test the waters for a few months before committing to a long-term lease, but the landlord didn’t offer that option, he says.
He also knew that staples, like dog food and cat food, would have to account for a good chunk of his store’s overall sales—an achievement he suspected would be all the harder during a time when competition from big-box stores and supermarkets is at its stiffest.
“And, unfortunately, in the space we are in, you can’t allocate a lot of space to dog food, because you’re just too far away from the parking lot,” he adds.
For DiGiacomo, closing up shop seemed the most logical conclusion—but it was not one he anticipated would ever come to pass.
“A long time ago, when PetSmart [and other big-box chains] starting coming in, I asked myself, ‘What is going to separate us from them?’ Puppies,” he says. “Everybody’s got dog bones, but nothing to eat the bones.”
Fortunately for DiGiacomo, the original business model is still working for his Newport Beach store, which he says sells puppies from only USDA-licensed breeders and kennels. He is also moving ahead with plans to open a pet supply store in nearby.
But he fears that a wave of pet sales bans throughout the country will stifle the pet industry and limit people’s access to puppies. “We’ve always had rescue and dogs, and we encouraged rescue, but we knew it wasn’t right for everyone,” he says. “They are basically going to eliminate that channel.”
The worst-case scenario, he says, is that “Puppies may become extinct.”
Adopt, Don’t Shop
For many years, Greg Gordon slept soundly at night, comforted by the confidence he had in the breeders who raised the puppies sold at Dog Patch Pet and Feed in Naperville, Ill., the pet store he managed. Gordon knew the breeders personally and had visited their properties. He thought of them as “good, salt-of-the-earth people who did it the way you’d want your puppy to be raised.”
But two years ago, when he took ownership of the store, the idea that he could be doing something differently nagged at him like a pebble in his shoe that was becoming difficult to ignore.
“When the original owner and my friend, Craig Allen, passed away, I bought the store from his wife, but [the puppy sales business] had changed,” Gordon says. “It was not as profitable as it used to be, and it was harder to find animals from people with whom we were comfortable.”
Dog Patch Pet and Feed had been in business for about 40 years, always relying on a stable of trusted breeders to meet customers’ breed-specific demands, but over time, that stable eroded. The store went from working with 30 breeders 15 years ago to about four, leading Gordon to make a major decision.
“I was on a trip to buy puppies [when] I called my wife and said ‘I just don’t want to do this anymore,’” he recalls.
Thus began the journey from being a puppy and supply retailer to being a pet store/adoption center.
Still, while making the decision to get out of the business was straightforward, it was not clear to Gordon how he was going to sustain the business. “What we did was walk away from a pretty good revenue stream of selling dogs and walk into what would hopefully be position-neutral—meaning it’s not costing me anything and it’s not making me anything—which is a pretty hard sell for the accountant.”
He also struggled with the message that he thought the store’s conversion would send.
“I was worried that somehow this would be seen as a tacit admission that we were doing something wrong in the past,” Gordon says. “I was really proud of how we did things, but when you stop doing it, people say, ‘What’s up?’”
It has been nearly a year since Gordon last sold a breeder-acquired puppy, and he has learned several things along the way. First, while having puppies for sale has been known to lure customers to a store, it can also have the opposite effect.
“One of the questions we’ve always been asked is, how many people aren’t coming into the store because you sell puppies,” he says. “It’s way more than you think. There were so many people who wouldn’t set foot in here because of it.”
Secondly, he learned that going full tilt in his efforts to work with local rescues allowed him to reap the benefits of having the full support—and patronage—of the rescue community.
“Business has been good,” Gordon says. “Rescue people put their money where their mouth is.“
While Gordon has undoubtedly worked hard at the transition, he has also been fortunate. Local rescues have helped him identify and secure the best dogs for his business—smaller dogs, puppies from a rescue that saves a lot of pregnant dogs, and dogs that have been examined by a veterinarian and gone through quarantine. On most days, he will have up to 20 dogs for adoption, but since he has to balance the cost of caring for the animals against the relatively low adoption fee he charges, the flow is dictated by his budget.
“The biggest surprise was the expenses,” Gordon says. “I don’t pay for animals, but spay and neutering, vaccines, dental work, microchips—by the time you do all that, it’s a lot of money.”
Fortunately, the retail side of the business is thriving. Gordon has adjusted his assortment to better suit his new customer base and business model. He expanded the assortment of staples and added higher-end boutique-type products. He also made adjustments to fit the adoption end of his business—for example, stocking larger crates to meet the needs of customers who adopt older dogs.
Any fears he may have had at the beginning of the transition about the loss of customers or revenue have been allayed.
“That income [that we walked away from] has pretty much been entirely replaced by other categories,” he says, adding that his customers are willing to spend generously on their pets. “It has been amazing.”
There is an old adage that says, when one door closes, another opens. But make no mistake, sometimes you may have to jimmy the lock. Retailers should remember that when trying to replace puppy sales with an alternate revenue stream. Relinquishing pet sales may open the door for new possibilities, but replacing that revenue takes work.
“It was a leap of faith,” says storeowner Tim Wilson, who had a change of heart about selling breeder-raised puppies six years after opening up his full-line pet store, City Pets and Ponds in Kansas City, Mo. “It was a little scary. I took what was my whole puppy-display area and turned into a full-service grooming salon.”
Having been in the pet industry for 30 years, Wilson has witnessed the heyday of the mom-and-pop, puppy-in-the-window pet shop. Those were lush years during which malls, town centers and strip malls reaped the traffic-building benefits afforded them by pet shops selling cute baby animals. It was also a time when pet store puppies came from people’s backyards and breeding operations were small, breed-specific and humane. But Wilson says things changed.
“Dark influences have come into the industry and turned it into big business,” he says. “When you are selling dogs as a commodity, I don’t care what you do, you are going to have problems.”
For years, he was committed to using reputable breeders, and many of the puppies he sold were house pets, raised indoors by his own brother. Wilson was careful to be transparent about where he sourced the puppies he sold. He even tried doing adoptions while having the puppy-sales business. However, he says, despite those efforts, his socially savvy urban clientele wasn’t impressed.
“Because there are so many horror stories out there, that’s what is all over the news,” he says. “I could talk until I was blue in the face about where the puppies came from and show pictures of my brother with the puppies in his living room; it didn’t matter. And frankly, I don’t blame them.
“I finally decided there is no right way to do what I perceived to be the wrong thing,” he says.
However, as emphatic as he was about the decision, he understood he was taking a gamble. “At that time, [puppy sales] were about only 10 percent of my gross, but it was a pretty good percentage of my profit.”
It has been three years since he stopped selling puppies, and Wilson says business is up. The success of the grooming component that he added to the business helped smooth the transition, he says. He credits Kelly, the sole groomer on staff, with “taking that space and making it into something special.”
He also has space to accommodate up to four full-time groomers, but he hasn’t found the right candidates yet.
On the retail side, Wilson has expanded the selection of dog supplies and cut back on the assortment of boutique items, which weren’t resonating with his customer base. What is resonating with customers, however, are the monthly adoption events that the store now hosts.
“I have had so many people approach me and say, ‘I read about what you did in the newspaper and I support what you are trying to do; I didn’t shop here before because I knew you sold puppies, but I’m shopping here now,’” Wilson says.
He admits that giving up puppy sales isn’t a money-making venture; his peers in the business make more money than he does. But, Wilson adds, there are ways to recoup much of that income.
“Services are a big growth area in our industry—that’s undeniable—and services can be applied to all kinds of dogs,” he says. “Try to increase services—grooming, dog training, yard pooper-scooper services, dog walking, day care—all of that stuff will help replace that revenue streams.”
And, he adds, don’t forget to broadcast the changes.
“Try to put it out there—what you are doing and why you are doing it,” Wilson says. “And be positive about it. You don’t have to explain the changes by pointing out the negatives of what you are moving away from. Talk about the positives of what you are planning to do.”
Taking the Puppy Out of the Window
Published: January 1, 2013
Three independent pet retailers share their experiences of life after puppy sales.