PetFlow Paws its Way to the Top of Facebook, Sniffs Out Growth Path
In February 2011, the website Business Insider quoted PetFlow.com co-founder Alex Zhardanovsky criticizing the pioneer of the online pet-supply business—Pets.com, which famously blasted onto the Web in the early 2000s and then shut its doors when it couldn’t find a path to profitability. In the article, Zhardanovsky contended that Pets.com got in trouble by selling pet food below cost.
That didn’t go over too well with Julie Wainwright, the former CEO of Pets.com, who wrote a sternly worded response to the article pointing out all the resources that e-commerce entrepreneurs have today that she didn’t, namely low-cost “plug and play solutions” for running warehouses and customer service sites. “Cloud computing did not exist, which means that we had to have a server farm and several IT people to ensure [sic] that the site did not go down,” she wrote.
But PetFlow.com has something else that Pets.com didn’t: Facebook. As it turns out, the social media giant has been vital to helping the two-year-old startup stand out against a rapidly expanding group of competitors, including Amazon’s Wag.com. When Xconomy sat down recently with Zhardanovsky at his company’s New York headquarters, PetFlow.com had just surpassed Wal-Mart to become the most talked-about retailer on Facebook, according to PageData, an independent research firm that tracks Facebook metrics.
PageData looks at a combination of factors to come up with its rankings, including the quantity of likes, shares, and comments that retailers generate on Facebook. “What they measure is actual engagement,” Zhardanovsky says.
Zhardanovsky credits Facebook for fueling PetFlow’s recent growth. The company is charting about 35,000 orders per month for pet food, cat litter, and toys, he says. It ships more than 1.5 million pounds of food per month and Zhardanovsky says it took in about $2.5 million in revenues last month. The company’s sales are growing about 10 percent month-over-month, he says. And half of sales come from customers who sign up for the company’s auto-ship option—a feature that allows them to ensure that bag of kibble or litter will show up at their door on a time schedule that they dictate—Zhardanovsky says.
PetFlow.com was founded by Zhardanovsky and Joseph Speiser, entrepreneurs who founded AzoogleAds, an online advertising firm that was bought by a private equity company in 2005. The idea for PetFlow came from Zhardanovsky, who kept running out of the premium food he feeds his dog, Ruby. “I would call Furry Paws on 8th Street and beg the guy to deliver a bag of food at 7 p.m.,” he recalls. “Sometimes they wouldn’t have it. This is a hassle that most pet owners go through when they want to get high-quality food for their pets.”
In 2009, he put a bare-bones landing page for PetFlow on the Web, advertised its auto-ship feature on Facebook, and was stunned by what happened next. “We had an overwhelming response. Ten percent of people who went to the page filled it out,” he says. “The typical response to something like this is 3 percent.”
PetFlow’s Facebook strategy quickly evolved into the company’s most important customer-recruitment tool. “At the beginning we made the same mistake everyone else does on Facebook, which is … Next Page »