After cats and dogs, the next most common pet in the United States is the ferret. Who knew? L.A. businessman Alex Tabibi is looking to amass an online pet empire based on such knowledge.

Already the proud owner of dog.com, ferret.com, bird.com and horse.com, Tabibi has just paid $1 million for fish.com, the highest cash price for a domain name this year.

But is this just a replay of the online pet store debacle of the dot-com years when Pets.com burned through $130 million in cash, went public and collapsed? Tabibi, and his brother and co-owner Carlo, believe that they have learned from others’ mistakes. “My brother and I are contrarians,” Alex Tabibi said.

Pets.com was famous for its sock-puppet spokesman who made appearances in multi-million-dollar Super Bowl commercials. Dog.com and the related sites will not have nearly as high a profile, according to Tabibi. Instead, they will rely on heavy consumer research and targeted marketing. “One reason we bought horse.com is because horse owners, on average, own 2.5 dogs,” said Tabibi, who owns two German shepherds (though he doesn’t ride much and has never been much of a fish person).

Dog.com, Ferret.com and Horse.com sell beds, treats, toys and grooming products. Plans for Fish.com, which is still under construction, include aquariums, fish food and tank decorations, and Tabibi said he’s looking into the possibility of selling tropical fish but wants to make sure it can be done “in a humane manner.”

All the sites are managed from the same facility in Hazleton, Penn. and orders are transmitted to the company’s warehouses for fulfillment. All told, Tabibi said there is about $6 million-worth of inventory. “Toys which retail in a local store for $10, we probably sell for $1.99,” he said.

Outsourced operations


Despite Tabibi’s optimism, analysts are hard-pressed to say that the market is ripe for a new online pet retailer.

“Pets.com was a big to-do a few years ago,” said Joan Storms, an analyst at Wedbush Morgan Securities. “But Petco and PetSmart both have Web sites and Wal-Mart sells pet stuff online too.” (Retailers Petco Animal Supplies Inc. and PetSmart Inc. do not identify how much of their revenues come from online operations.)

The biggest expense for a pet owner is food, she added, “and wouldn’t you rather just pick it up at the grocery store rather than paying for shipping?” Tabibi said dog food sales are minimal and cat food isn’t sold at all because shipping costs would be too high.

Though Tabibi wouldn’t give specifics, he said revenues have grown 80 percent and Dog.com is on schedule to turn a profit this year. He said there are 60 employees, with some of the operations outsourced. Tabibi works out of his home office in Beverly Hills, and the company ships supplies from warehouses in Pennsylvania and Missouri.

The 36 year-old Tabibi didn’t set out to build a pet empire. Originally from England, he did his undergraduate studies at the University of Southern California, as well as attending medical school there. He said he completed his first year of an oncology fellowship at Cedars-Sinai before quitting to run the investment company ZCapital LLC with his brother full time.

One of their first investments was in a general pet-supply site, PetQuarters.com, but the company folded in 2001. The Tabibis bought the assets of PetQuarters out of foreclosure, as well as assets from another bankrupt pet supply company, DogsOutfitter.com, in 2002.

Simple strategy


The key was to find a simple name that could market itself. Dog.com had already been taken, but Tabibi managed to acquire the name in 2004. Tabibi realized that he would have to act fast to snatch up the other simple Web sites bird, ferret, horse. “We had to buy them all,” he said. That includes petsupplies.com, horsesupplies.com, fishsupplies.com and the toll-free numbers made up of those letters.

Cat.com still eludes him it belongs to construction equipment manufacturer Caterpillar Inc. “That’s the only one I couldn’t get,” he said.

Tabibi didn’t intend to shell out $1 million for the fish, but in order to keep competitors out, “We had to do it,” he said. “That’s what the guy wanted.”

But fish.com will be the company’s last domain-name purchase, according to Tabibi. He doesn’t regret spending the cool million he just wants to focus on the business now. “Many people have buyers’ remorse, but not me,” he said. “I’m very happy that we have it.”