Petz, from the purchase of the startup Pet Store to the integration in Pet Smart

In the startup environment, it is a habit to talk about successes to keep our hopes alive for the future, but it is a big mistake to forget the failures of the past and not benefit from the experiences of the past. For this purpose, the Ecomotive team has collected the experiences of a series of failed startups, so that reviewing their failed stories may be a basis for the success of new startups in Iran’s startup community. This collection will be published and made available to the audience in the form of the story of failure. We review the twenty-seventh part of this series, which deals with the failure of Pets.com startup.

Petz was an online company that sold pet supplies and accessories to its customers. The company started its operations in August 1998 and was supported by a strong marketing campaign that made it well known among the general public.

In the first round of Petz’s stock offering, Amazon bought 54% of the company’s shares. What the CEO of the company referred to as “marriage in the sky”. Summer 2000, Petz, its rival company; that’s mean Petstore bought the

Petz’s website design was very attractive and won several advertising awards. Broadcasting the first teaser of the company as one of the advertisements Super Bowl It cost him one million two hundred thousand dollars, but he was very successful in introducing the company and won the first rank of USA Today advertisements.

Petz spent a lot on its infrastructure, including its warehouse. At its peak, 250 of the company’s 320 employees worked in its warehouses across the United States.

But despite proper advertising and popularity, the company made only $619,000 in its first fiscal year, while its advertising expenses reached $11.8 million.

Petz suffered from a lack of an efficient business plan and lost money on almost all of his sales, as he was selling products close to their purchase price in order to build a strong customer base. The company hoped to gain the trust of its customers and change their buying pattern and lead them to buy more expensive goods, but this did not happen and in the second financial year, Petz continued its trend and sold the goods at 27% less than the price. The real ones sold. Although the company’s income had increased, this figure only slowed down its decline.

The company was founded on the premise that there would be a market for the online sale of pet supplies and that customers would prefer to wait a few days for their goods to be delivered instead of leaving the house and going to the store. In fact, instead of measuring the needs of the market and customers, Petz went ahead with his assumptions and wanted to attract customers by removing middlemen and lowering the price of his products. Apparently, the company from the existence of the modelAwareness, interest, desire, actionHe was clueless in the field of business. Petz succeeded in introducing himself and creating interest in his potential customers, but failed to create the necessary desire and lead them to the action stage. In this way, he could not fulfill his assumptions and goals. Petz’s case is a good example that shows that in order to establish a startup, you must first look for a real and valid need in the market, otherwise you can’t get anywhere with advertisements and discounts.

In the fall of 2000, the board concluded that it could no longer raise new capital, so it quickly took steps to sell the company. Finally, 300 million dollars investment of Petz company was destroyed and some assets of this company, including its website domain PetSmart sold.