Economy of scales: How a reptile-focused pet shop does business

Twin Cities BusinessWhen Bruce Delles founded Twin Cities Reptiles (TCR) as a mail-order business 38 years ago, it was all about the animals — specifically, lizards, snakes, turtles, spiders, and amphibians. At the time, there weren’t many reptile-specific accessories available, so most owners made do with domestic-animal supplies found at traditional pet stores.

Today, live animals are the smallest sales category for pet stores nationwide, including TCR. Rather, they make their profit on products and services related to maintenance and care — a pet owner only buys the animal once, but returns for food and other supplies for its lifetime.

Margins are more predictable on dry stock versus live animals, which require not only labor to care for them, but also cages, food, bedding, lighting and other goods. Depending on how long it takes to sell an animal, its in-store maintenance can cost more than what it eventually sells for. “It’s a lot of investment,” says Delles. “And that is because I keep stuff clean and I keep it fed. It’s a living animal, it’s not just a commodity.”

While behemoths PetSmart and Petco make up more than half of the pet store market share nationally, most pet stores are independently owned and operated. Chain stores now carry a selection of reptiles and coordinating supplies, and Delles says small shops like his can’t compete on price against big-boxes with volume buying power or online-only retailers with low overhead.

“What separates us is the quality of our animals, the knowledge of our staff, and that we’re willing to work with people rather than push something on them,” he says. “I’m not going to sell you something you don’t want, don’t need and that’s going to die because you don’t know how to take care of it.”

Industry snapshot

Pet Store Industry:
$17.5 billion

Market share leaders:
PetSmart 38.6%
Petco 18.8%

Starting at about $100 each, baby ball pythons are TCR’s best-selling animal, many of which Delles breeds in the shop. While breeding animals has its risks, both to the animal and the breeder, Delles says the bigger concern is dispersing the animals, particularly out of state. Pet stores must keep up on local, state and federal regulations for protected animals, which vary greatly.

Located near Midway, the shop is more than three miles from the nearest PetSmart, Petco, or Chuck & Don’s — and surrounded by a slew of pet-friendly apartment complexes and condo buildings. Thus Delles stocks a small number of dog and cat products to serve them.

This article is reprinted in partnership with Twin Cities Business.

Comments (1)

  1. Submitted by Pat Berg on 01/05/2016 - 07:17 am.

    Not unique to reptiles

    From the article: “Margins are more predictable on dry stock versus live animals, which require not only labor to care for them, but also cages, food, bedding, lighting and other goods. Depending on how long it takes to sell an animal, its in-store maintenance can cost more than what it eventually sells for.”

    The article implies that the above statement is unique to businesses that deal in reptiles. In fact, this statement applies to ANY business that sells live pet animals as part of what it offers.

    Of course, providing quality care costs more than providing minimal care, thus affecting the eventual margin of profit, but once again, this applies to ANY live animal sales model, not just reptiles.

    Just wanted to clarify that as I found it odd that the article seemed to imply that these factors are true only when the animal being offered for sale is a reptile.

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