OLIVER'S Petfood - don't let the flop happen again!

A € 80 000 loss, one year wasted (of which only four months in operation) crowned with a bankruptcy. That is the conclusion after launching and running OLIVER’S Petfood in Belgium. If you consider to do the same in another country, here is some advice.

OLIVER’S Petfood is a licence agremeent. Basically you pay for the right to use the brand for a designated area. The licence agreement consists of a complete business model, with a vaste range of assistance like website, marketing material, online support, a “hotline”, training and so on. Despite certain similarities with a franchise agreement it is still a licence and should be considered thereafter.

OLIVER’S Petfood is a premium product, with outstanding quality. A main principle is direct distribution, with internet and telephone sale only. OLIVER’S products are never sold through vendors, shops or other traditional outlets. That means no commission to retailers but at the same time nobody else does the sales work for you. You have to make every single transaction moving.

If you are considering a partnership, or going into whatever licence agreement whatever, we would like to give you some advice before you take a final desiscion.

1. Consider if the business model is relevant for your market, not only the product and the concept. Is licensor’s experience applicable in your country? Does it offer any substantial contribution to your prospective business?
2. Be aware that entering a market with an unknown brand, by only selling via internet, telephone and personal contact requires immense marketing resources. Intense canvassing may compensate for lack of money but is on the other hand extremely time consuming. Do you have both time and money to reach break-even within a reasonable time frame?
3. Do not overrestimate yourself. Do you posess skills about petfood and pet nutrition? Do you have a network of prospective clients? Do you have sales experience? If the answer is no, hardly, just a little on any of these questions you should really reconsider.
4. Scrutinise the licensor. Do they have the ability to conduct business on a worldwide scale? The capacity and competence to operate on an international market, in different countries? Are they mature, experienced and skilled enough, to understand cultural differences, local circumstances, perceptions and habits? This is a question of having the capability of going abroad rather than making quality petfood. Success in the home market does not necessarily mean success in other countries.
5. In order to provide adequate training and assistance, one should have some education, academic background and not just “on site experience” from own company. Simply check the licensor’s CV!
6. Check independent references. Not only the company itself, their partners and customers. Try for instance to get hold of previous employees – or licencees, like us.
7. Keep it on a strictly professional level and steer away from any personal involvement. Refrain from any ”family talk”. Notions like value, constitution, mission etc. should not be put into a personal context.
8. If you opened up a shop on the corner, would you pay a fee to your suppliers to have them deliver? Consider if the entrance fee is in proportion to the goodwill, business model being delivered and the tools included. The brand offered is unknown – you must do the brand and image building on your own. What about the remaining stuff? Check and scrutinise all tools like website, content management system (publishing tools), advertising material etc. Have some local professional to look at it. Can you use it? Is is worth paying for?
9. Insist to run your business from home. Put the stock in your garage and park the car outside. Do not meet any demands for office and warehouse, unless licensor offers to pay the rent. You are the only one to pay the bills so you should decide what the money should be spent on.

Note: It may very well be that you are suitable for any concept in the petfood business – or other licence for that sake. This is an advice, based on our own experiences. After all, it comes down to your own decision that you are solely responsible for. More information about OLIVER’S Petfood can be obtained from their website. Read and make your own judgements.