Home' Forge : Vol 2 No 1 Contents 16 // TIPPING POINT
that no-one's making money from
online retailing unless they are
selling their own goods, and they
are vertically integrated,' he adds.
He says the state-based distribution
model that My Pet Warehouse now
uses is suitable for the Australian
market, where retailers sufer from
the tyranny of distance given the
vast stretches of land between major
population centres across the country.
In contrast: in the United Kingdom,
for instance, it's possible to have
a single distribution centre, given
the small geographic size of the
nation. But that's not appropriate in
Australia, says Bartholomew.
'The biggest challenge is freight,
which is why we have distribution
centres in four states. Also, it's
impossible to control freight. Sending
goods interstate, people might wait
up to fve days to receive an item.
But these days people want things
now, so that's not good enough.'
Questioned as to the suitability of
the dropshipping model for the
Australian market, Bartholomew
says this is not appropriate for
a business of his type. In the
dropshipping model, the retailer
does not manage the supply chain;
rather, they outsource warehousing
and distribution to an external
party. Typically, online retailers
that use this model look after
customer care themselves, and
manage external providers for other
'You don't have any control, and
you get charged for everything.
Then, if someone phones in sick at
the dropshipper 's end, orders slow
down and the customer misses out.
It might be okay for customers who
are prepared to wait, but it's not
suitable for people who want their
One of the big advantages of
maintaining the distribution
network in-house, says
Bartholomew, is that it's possible
to respond to customer queries
and returns much faster. 'If
someone needs to return an item
under our model, they won't need
to send it a long way, so our cost
of managing returns is not too
high. Also, by having a physical
presence in each state, we're a
local business, so we can ofer a
more personalised service. It's also
better for Google rankings to have
a local telephone number, and
it's great in terms of engagement
with the customer. We still have
a central service centre, but each
state has its own phone number.'
A disruptive force
Businesses like My Pet Warehouse
have been disrupting traditional
players in the pet supplies market
– but it has a point of diference in
the market that its competitors will
fnd hard to match. Customers can
shop online from within the store,
and receive same-day delivery of
their order. The idea is that if people
cannot fnd what they want in the
store, they can use a device to see
the options available, transact on
the spot, and have the items sent
straight to their home.
'We have introduced cloud-based
software that allows us to engage
more fully with customers,' explains
Bartholomew, who says the idea
is to ensure that even if customers
can’t fnd exactly what they want in
the store, they won't have to leave
'We were thinking about Uber when
we were visualising our approach
to customer service; it's all about
ease of use. We are always thinking
about how to get products to
customers faster, and how to satisfy
them more,' he says.
Top tips for entrepreneurs
A second-generation retailer with
30 years' experience in retailing,
specialising in pet supplies,
Bartholomew has sound advice for
'Choose something you're passionate
about -- something that interests you.
If you're not passionate about your
business, don't do it.'
He also says it's essential not to
spend more than you earn, and to
stay close to the business by being
physically present in it. 'You need to
walk the foor.’
As to the future, Bartholomew
hopes to open distribution centres
in Adelaide and Canberra this year.
'We send 14,000 packages a month,
which gives us a heat map of where
our customers are, as well as an
indication of where the hotspots
for customers are. So we are able to
position stores where they will have
the greatest customer reach.'
Bartholomew is targeting annual
revenue of $50 million in sales
within the next three years. 'I'd
like to think we could reach
$100 million in revenue in under
fve years,’ he says.
As for an exit strategy -- at the
moment, he is the sole shareholder
-- Bartholomew says his aim is to
allow the business to grow further
in the short term, before considering
a share market listing. 'An IPO is
the perfect vehicle, but this isn't
an exit strategy; it would allow the
business to raise funds.'
He does have a plan to grant shares
in the business to key people. 'If
they sell, we can raise money.
But the business was not started
for purely fnancial purposes;
we genuinely love retail and pet
supplies. But you never know what
will happen in the future.'
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