How Much Does it Cost to Open a Pet Store?

Fido and Fluffy are treated like royalty in North America where pet owners love to dote on their fur-friends. Dogs and cats are far and away the most popular animals in the United States, but the list of much-loved animals includes everything from hamsters and gerbils to fish and finches. When it comes to pet care, the pet shop is a necessity where pet owners buy everything from food and medicines to pimped-out beds and other toys.

If you’re wondering about the costs to open pet stores, there are all sorts of variables you’ll need to consider, but one thing is for sure – this isn’t a business for people who don’t have a passion for animals. You’ll need to have an affinity for animals and an understanding of what pet owners want and need for their pets.

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There are far too many variables at play to put a tidy ballpark on opening a pet store. Depending on where you are and the size of the store in question, a minimum of $50,000 to over $1 million is possible.

The average home spends about $500 yearly on their pet, but affluent pet owners polled say their pet indulgences come in at over $1,500 annually. This includes toys, food and medical basics, but medical intervention can send those costs far higher – and isn’t relevant, really, to the pet store.

In 2019, it’s estimated that American pet owners spent $36.9 billion on food and treats alone – up from $19.85 billion in 2011. Veterinarian care and product sales came in at $29.3 billion, which is more than double the $13.41 billion spent in 2011. Supplies, over-the-counter medicines and ever-decreasing "live animal" sales combined for $19.2 billion in 2019 with other services like grooming and walking coming in at over $10 billion. All told, it’s just shy of a $100-billion-per-year industry in the United States alone.

In 2017, nearly 90 million dogs were estimated to be pets in the United States, just short of the 94.2 million cats. All told, about 68 percent of American households had pets in 2017, and each one needed food and other supplies along the way.

It’s impossible to tell you how much a pet store will cost to open because the expenses will vary neighborhood to neighborhood and state to state, and regulations will vary too. Your biggest ongoing expense will likely be securing a lease. In a strong economy, you’ll have to pay a premium for a lease space, but economic downturns can make it prudent to buy while commercial space prices are low.

You should check the zoning laws before you double down on a location, and check civic plans for the region because picking a property only to discover there’ll be three years of construction for a new light rail transit station could sound the death knell for your business before your doors even open.

Beyond that, you’ll have to scope out the competition and see where the nearest competitor shops are. What's the local community like with pet ownership? You might be able to find out more at the community newspaper, which may have an idea on area demographics. Keep in mind that millennials are the fastest-growing pet ownership segment, making urban spaces and apartment-heavy areas a potentially booming market for boutique and independent pet stores.

First up is building out the location – that means paint on the walls, flooring, shelving, signage, cash registers or computers, scanners, a security system and so much more. Before that happens, you’ll need business licenses and building permits, business insurance and a corporate structure – all of which costs money too.

Fitting out the store with the basics of a buildout will take anywhere from $30,000 to $175,000, which is contingent on how unfinished the space is when you take possession. The computer system alone will likely run over $10,000, and that depends on the point-of-sale system you incorporate. Shelving and other fixtures are likely in the $20,000 to $60,000 ballpark and will depend on your aesthetics and resourcefulness.

You can expect inventory to be a big hit, and it’ll be $30,000 to $70,000 or more, all depending on what you choose to stock and how much of it you decide to carry. Stocking a store is a double-edged sword because having too much stock ties up your operational cash whereas having too little can be off-putting for shoppers and can cost you sales if you haven’t got what they need when they need it.

Now that you understand the sheer magnitude of the pet industry and how quickly it has grown in recent years, it’s easy to understand the appeal of jumping into a growth industry. But is a pet store franchise right for you, and if so, what kind?

Franchises are popular because they’re an established business model with a good basic game plan, but they’re still a risk because you’ll need the right location, good service, competent management and demand for your services. And, as well as you may execute all those variables, there’s still that which you can’t control – regional traffic, existing competition, who might decide to move into the area and on it goes.

When you buy into a franchise, you’re paying for franchise fees, the training they’ll provide, a fixed array of brand-approved furnishings and marketing materials, corporate-chosen store inventory and so on. Then, of course, they’ll take a chunk of your profit, too, as the franchising royalty.

Entrepreneur magazine has its “Franchise 500” list of promising chains investors can buy into, and among the pet store franchises at number 50 on the list is Pet Supplies Plus, which reports its average unit volume to be in the $2.2 million range. The company has been investing in more corporate-owned stores, but the store is about 50-50 between company- and investor-owned franchises. One wanting to buy in can expect an initial investment between $440,000 and $1.3 million depending on retail spaces and regions. They require a net worth of $600,000 with $200,000 in liquid cash, on top of the $49,900 franchise fee, and then there’s the ongoing royalty of 2 to 3 percent on top of their monthly advertising royalty fee.

Lower on the list at spot 118, Petland has been going strong for half a century and boasts 71 U.S. franchise stores, 144 international franchises and 17 company-owned stores. To buy in, initial investment costs are between $290,000 and just over $1 million with an initial franchise fee of $40,000 and an ongoing royalty of 4.5 percent. They do offer incentives for military veterans getting into the pet biz. An investor’s net worth must be in the $500,000 to $1 million range with a liquid cash requirement of $150,000 to $500,000.

Companies like Shopify have made it possible for entrepreneurs to create online stores that are doing big business today. The consumer's apprehension over shopping online is long gone, and they're more willing to buy products over the web than they’ve ever been.

As a startup pet shop with virtual stores only, you take care of the biggest expense – retail space leasing. You may need shelving or other storage, but you won’t need it to be retail-grade for the hard wear and tear of daily shopping. You’ll still need things like insurance and on-hand stock for quick delivery, but some risks will be reduced for a new business. On the other hand, those operating costs that are alleviated by having no physical storefront will be offset by delivery fees and higher marketing spends.

And don't forget pet services – from dog walking and grooming to pet therapy and boarding, business is booming in all sectors.