Profile of a public company in Florida
Discount mail-order business PetMed Express tops $200 million in revenue. Consumers love it, but vets have never gotten over the competition.
PetMed CEO Menderes Akdag says he plans to continue the company’s aggressive pricing while increasing advertising and expanding its product line. [Photo: Miami Herald]
To date, only one manufacturer has reversed its veterinary-exclusive sales policy. In 2010, Bayer Animal Health began selling its flea and tick products to brick-and-mortar and online retailers. PetMed Express says it will continue to try to establish direct purchasing arrangements with the major pet pharmaceutical manufacturers.
Meanwhile, PetMed Express faces challenges, including increased competition both from online vendors like Amazon.com and retailers like Walmart, Costco, Target, Kmart and Kroger. Economic pressures have also affected sales in the $3.8-billion market for pet medicines. In an investor presentation last fall, PetMed Express acknowledged that cost-conscious consumers have been “trading down” and purchasing less expensive medication brands.
To boost sales, the company has spent more on advertising and slashed prices — moves that in the short-term have taken a toll on its bottom line. Profit fell to $16.7 million in fiscal year 2012 from $20.9 million in 2011.
PetMed Express continues to aggressively protect its economic turf, filing trademark or copyright infringement lawsuits against almost any online competitor that adopts a name anything like its own or uses its trademarked terms in advertising.
Sales/Profit (in millions)
Akdag has seen the Pet Meds-veterinarian dynamic before. Before joining Pet Meds in 2001, he was CEO of Lens Express. When the online retailer of contact lenses and supplies went into business, it undercut optometrists and ophthalmologists, who had enjoyed a near monopoly on contact lens sales to that point.