What should I check before buying an online pet food store?
Check whether brand supplier accounts and dealer approvals carry over to you, what shipping heavy bags costs the business, how autoship subscribers and cancellations are tracked, the fulfillment or warehouse terms, and who controls the domain, platform and advertising accounts.
An online pet food retailer resells food that other companies make. That is different from a brand selling its own products, so the buyer’s questions are different too. Much of the business sits in accounts held by someone else: the brands, the shipping carriers, the platform and the ad networks. Here is what to look at before you go further.
Brand accounts and approvals
Ask each major brand whether the store’s dealer status or wholesale account continues under a new owner. Some brands approve each retailer individually and may say no. Get any answer in writing. Without those accounts, the website may have little left to sell. Our page on checking supplier relationships lists more questions.
Shipping heavy bags
Dog food is heavy and shipping can eat into what each order earns. Ask how the store ships, which carriers it uses, who pays for damaged or lost parcels and whether any shipping rates are agreed in writing. Look at a sample of orders to see what the business actually keeps after postage.
Autoship subscribers
Repeat orders are the steadiest part of many online food stores. Request records showing subscriber numbers over time, cancellations, skipped shipments and failed payments. Ask how long a typical subscriber stays. Ask your lawyer how customer information can be passed to you, and do not assume you may simply take it.
Fulfilment, domain and accounts
If a warehouse or fulfillment partner ships the orders, read its terms and ask whether they can be transferred. Confirm who owns the domain name, the store platform account, the email list and the advertising accounts, and that the seller can hand each over.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
- Expert answerHow do I check a business’s supplier relationships?
- Expert answerWhat if there are no written contracts with key customers?
- Expert answerHow do I build an operating model from my due diligence findings?
- Expert answerWhat if due diligence finds debts the seller swears are paid off?
- Expert answerHow do I check a pet store’s live animals and stock before buying?
- Expert answerWhat should I ask about a pet store’s relationship with its pet food brands?
Selling
Brokers
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canadian Food Inspection AgencyGovernmentRecall procedure: A guide for food businesses
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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