Is it a sign of a bad bubble that we're re-hashing ideas from the first dot-com boom? Or are some ideas right, just too early? The team at Quidsi, which runs Diapers.com and Soap.com and which was bought by Amazon for $540 million this year, believes the latter, and they're launching Wag.com today to prove it.
Wag.com is a bubble 2.0 stab at Pets.com. For those of you too young to remember, Pets.com was a high-flying Internet retailer in 1999 and 2000. It sold pet food and other pet supplies online. Even in the frothy 1999 tech bubble, though, it was a puzzler that a company could make money selling dog food cheaply online and then paying for shipping on top of it.
In fact, Pets.com lost money selling and shipping low-margin pet consumables. So much that the company burned through its funding and folded less than two years after it launched.
Lesson learned, right? Apparently not. Quidsi believes that if they "start with the customer, and work our way back," as Quidsi's Marketing Director Earl Gordon says, they can make an online dog food business work. Because, clearly, nobody else has thought of this before.
The real secret is simply better logistics. There are three Wag.com warehouses, each with the entire inventory selection in them, to reduce shipping distances. Quidsi also uses proven Kiva robots to move items throughout its warehouses and help shop floor workers pack and pick shipments. "We've been doing this for a while," Gordon says. "We can efficiently deliver a a 40-pound bag of dog food."
The other trick to Wag.com, in addition to its ability to leverage Amazon's own marketing muscle, is that, "It's not all about dog food and cat litter." Josh Himwich, who runs commerce solution for Quidsi, says that the company would barely squeak by if it focused on selling commodities, as the Diapers.com brand already appears to do with its eponymous products. "Diapers are loss leaders at every single [retail] store. Not quite for us, but approaching it. If all you do is sell dogfood, you won't stay in business." … Read more