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THIS WEEK'S TOPICS:

• 🐶 Australian Kelpie sells for $27k

• 💼 Business Barkdown: Dog collar business for sale

• 🧹 Why is my dog shedding SO much?

🐶 AUSTRALIAN KELPIE SELLS FOR $27K

Crikey! That’s some serious coin for a herding dog.

The 26th annual Australian Kelpie Muster in Casterton, Victoria, set new records. With a record-breaking turnout of 10,000 attendees, the event injected a whopping $1.7 million into the local community, affirming its significance not only as a cultural extravaganza but also as a substantial economic booster.

The highlight of the event was the Australian Premier Working Dog Auction, where Kimmy, a 33-month-old black-and-tan kelpie from Dubbo, New South Wales, fetched the top price of $27,000.

Kimmy's new owners, a young brother-sister duo from Tasmania, couldn't resist her blend of practicality, friendly nature, and robust working spirit. This purchase marked their debut in the working dog world, adding a new dimension to their merinos and rams farm near Oatlands.

Kimmy was just one of 49 dogs that went under the hammer, which included a diverse range of dogs in terms of age, skill, and regional origin, spanning New South Wales, South Australia, Victoria, and Tasmania.

While Kimmy's price tag was impressive, it did not surpass Australia’s national record sale of $35,200 set the year before. On average, dogs at the auction were sold for $3,400, contributing to a total turnover exceeding $400,000!

The interest and investment in working dogs is also evidenced by the popularity of shows like "Muster Dogs" on Netflix. This show, released in 2022, follows five farmers as they attempt to transform Australian Kelpie puppies into champion herding dogs in record time.

💼 BUSINESS BARKDOWN: DOG COLLAR BUSINESS FOR SALE

It's time for another dog business barkdown, err, breakdown.

This week, we are looking at a US based e-commerce business selling dog collars that help with training.

This business has been listed for sale on Acquire.com for $315,000, and reportedly has made $442,382 in revenue over the last 12 months.

Let's dive in snout first!

The Numbers 📊

Here is the excerpt from the posting:

So let's break this down a little more and add in some detailed info:

• Last 12 month margins = 27%

• Last month's margin = 28%

• Earnings multiple (how much more the asking price is than the earnings / profit) = 2.75x

• Unit price = based on the cost of their competitors collar, we guess the average order is $150

• Customers = they list between 10,000 - 100,000 (kind of a big range)

• Average web traffic = 15k visitors/mo

• Top acquisition channel = Paid search, which makes up roughly 75% of new customers

• What is this built with? = Shopify, Amazon FBA, ShipBob

• Business model - Dropshipping. This means they don't hold the inventory, but instead they make the sale and then order if from a manufacturer to ship to the customer

A look at recent web traffic:

What we'd want to know 🤔

This posting doesn't tell us everything, but if we were thinking about buying, here is what we'd want to dig into with the seller:

• 🖥️ Expenses - since this is a dropshipping business we are guessing that it's primarily the product and logistic costs.

• 🧍Customer acquisition cost (CAC) - one of the most important metrics in ecommerce. How much does it cost to get a customer, and how much is the average order

• 💵 Is their profit calculation net or gross? - meaning, the the profit what the owner makes, or just how much is left after paying for the product?

• 📧 Marketing programs successes and failures - what channels worked, which ones didn't, which ones haven't you tried?

• 🏪 Fulfilled by Amazon (FBA) store - they mentioned in the post they launched a FBA store and have done $10k/month in revenue and $5k/month in net profit (50% margin!). That seems great, tell us more.

• ⏰ Time spent and reason for selling - what does the owner do each week, and why are they selling a seemingly healthy business?

What we'd do if we ran this thing 👔

If we were to take the leap and purchase this business, there are a few areas we'd analyze and see if changes could help growth.

First off, we would be looking at new marketing channels, especially visual social media like TikTok or Instagram.

There is a growing amount of micro pet influencers that could potentially drive a lot of interest in the business.

For example, Instagram dog trainers like:

• Adam Spivey (@southenddogtraining, 1 million followers)

• Bethany Johnson (@walkingdogtraining, 60k followers)

Next would be to learn more about the Amazon FBA store. Those margins sound pretty great, but has demand been steady, and what would we need to do to increase sales?

Finally, looking to add complementary products to increase our average order size.

For example, if leashes and toys aren't part of the inventory, those are great add-ons to consider selling.

Do we think this is a good idea? 🤨

This is a tricky one.

On one hand, according to Shopify, high end profit margins are 20%, and if the profit margin of 27% is after ALL expenses, that is pretty fantastic.

Also, the Amazon FBA store seems to be working well, and could provide increased growth.

If this is truly run by one person, there might be pieces that can be outsourced for a low cost to make this a nice lifestyle business.

Though a few things concern us.

First off, it's unlikely the business has any control of the product. Most dropshippers are selling other people's products.

They just provide the marketing and sales. So there might not be much of a brand or ability to create a brand.

Second, the asking price isn't crazy, but it is a little higher than some benchmarks we found. They are asking for 0.7x of revenue and 2.75x of earnings (which we aren't sure if it's fully earnings).

So if the price isn't a bargain, are there possibly better opportunities out there?

The verdict?

We will pass ❌.

Not because this likely isn't a good opportunity, but because we'd like to own the product or brand.

Also, we like the idea of buying an ok business that isn't doing some standard marketing strategies. For example businesses that don't advertise much, or don't use tools like Shopify.

🧹 WHY IS MY DOG SHEDDING SO MUCH?

Maybe it's a dumb question, but why do most dogs (not looking at you, doodles) shed so much?

We get that when the weather gets hotter, they lose some coat, but even in the cold months our house is covered!

Seasonal Shedding 🍂 🌨

This is the part that makes sense.

According to Dr. Angela Martin, dogs seasonally undergo heavy shedding about twice a year to help them control their body temperature.

This usually happens in the spring and the fall. Spring shedding helps pets lose their heavy winter coats, whereas fall shedding helps them prepare to grow winter coats.

How much this occurs can depend on how much time your dog spends inside or outside. More time inside likely means more air conditioning, heat, and artificial light, which can confuse their internal clocks and cause more consistent shedding throughout the year.

Aha! That's an important insight, constant shedding can be due to soaking up excessive couch time.

Other Reasons to Shed 📝

In general, shedding is good, as it removes dead hair and helps release natural oils that promote skin health.

I mean, we shed too, but it's just not as noticeable since humans have roughly 1,000 hairs per square inch, while dogs have 15,000.

Can you imagine what it would be like if people shed that much!? That would be gross, no thank you.

There are also a number of non seasonal reasons dogs may shed:

• Breed. This plays a big part, though it's a myth that longer haired dogs shed more. Some big shedders include huskies, labs, terriers, and shepherds (or shed-herds, get it? 🥴)

• Nutrition. Food sensitivity or poor diet can lead to excess shedding

• Stress. You might notice that Fido sheds a lot more when you get to the vet

• Underlying health condition. Diabetes, thyroid disorder, and other conditions can cause increased shedding

If you notice patchiness or a thin coat, this could be non-seasonal shedding related to a health issue, so make sure to schedule a vet visit and get it figured out!

KIBBLE BITS:

Every week we love to shoutout a pooch that has made another trip around the sun.

Happy second birthday 🎂 Neptune! May your overabundance of cuteness continue to grow and shine through!

That's all there is to bark about this week.

If you want more, be sure to follow our Twitter (@dogonomist).