In the pet food industry, there’s one question every pet shop owner should ask before signing a supply contract: Does this supplier sell retail? This seemingly simple question largely determines the fate of the business. This article analyzes why a pet food importer not selling retail is a fundamental condition for a sustainable distribution system, not just a beautiful promise.
The channel conflict mechanism begins with a difference in cost prices.
Distribution channel conflicts aren’t about business ethics; they’re a mathematical consequence. In the supply chain, importers have the lowest cost of goods because they buy directly from the factory and bear the costs of large batches. Every link downstream buys at a higher price. When importers move into retail, they don’t compete on equal footing with distributors, but rather compete from an unbeatable position. They can sell at wholesale prices and still make a profit, offer freebies, or provide free shipping, while distributors have to add a profit margin to cover rent and staff costs. As a result, distributors lose the incentive to invest in display, inventory, and sales staff training, because all those investments ultimately lead customers to a cheaper place. Distributors should understand this before signing a contract: the difference in cost of goods sold cannot be compensated for by sales efforts alone.
The internet has cleared away the dark side of price lists.
Ten years ago, an importer who sold both wholesale and retail could still survive because pricing information was geographically fragmented. Provincial distributors didn’t know the price of the same product in the city. That’s no longer the case. According to Metric data from 2025, the pet supplies industry alone has thousands of sellers competing, with Shopee accounting for approximately 65.4% of revenue and TikTok Shop around 30.6%. Each product has a publicly available price comparison page, updated hourly. Customers can simply photograph the packaging and search to find all the circulating prices. In this environment, any discrepancies between the importer’s selling price and the distributor’s listed price are immediately apparent, along with a feeling of being cheated. Distributors should take advantage of this transparency: before distributing a brand, check the product name on various platforms and see which vendors are selling it, who owns it, and what the price is.
Why can Pet Food importers maintain market share without retail sales?
Distributors don’t react by arguing; they react with cash flow. The first step is to reduce imports, keeping inventory to a minimum to avoid tying up capital in a competing brand. The second step is to steer customers toward other brands during consultations, as salespeople always prioritize products where the store still maintains a profit margin. The third step is to stop importing altogether. This entire process happens silently, without any notification, and the importer only realizes it when market coverage has thinned. This is a real loss, because according to Mordor Intelligence, specialized stores including pet shops and veterinary clinics still hold about 72.44% of industry revenue. A non-retail pet food importer retains that market share intact, while independent retailers only touch a very small fraction of the remainder. Distributors should consider supplier market coverage as an indicator of the health of the system they are about to join.
Retailing diverts resources away from the core activities of upstream businesses.
The second issue, though less discussed, is equally serious: retail consumes a very different type of resource than distribution. A store or showroom needs people to handle chat, process individual orders, manage advertising, and handle returns for every single bag of nuts. It’s detailed, time-consuming, and never-ending work. Meanwhile, the proper work of an importer involves entirely different things: maintaining market price order, negotiating with factories, forecasting demand to place orders months in advance, managing the expiration dates of the entire inventory, and training a team of consultants for the system. When the team is drawn into retail, these tasks are neglected, and the consequences fall on the distributors in the form of shortages, near-expired goods, and erratic price changes. Distributors should evaluate suppliers by the quality of these upstream operations, rather than by the grandeur of the retail channel they operate in.
When there is a shortage of goods, which channel is prioritized first?
There’s a very clean test to see the nature of the model: what happens when goods arrive late or are in short supply. Importing is an activity with long delays; a week’s delay in shipping or a few extra days for quarantine paperwork is enough to cause inventory shortages. At that point, the importer with their own retail channel is forced to choose: keep the goods for their own store, where revenue comes in immediately and profit margins are highest, or share them with distributors, where payments come later and prices are lower. The benefit structure always favors the former, no matter how well-intentioned the manager is. The same logic applies to sales data: when importers sell directly, they know exactly which products sell in which areas, and that information can be used to open sales points that compete with distributors. Distributors should directly ask about the allocation mechanism when shortages occur and demand that the priority principle be clearly stated from the outset.
The most important screening question when choosing a supplier.
From the perspective of someone opening a pet shop, choosing a supplier often boils down to comparing discounts. This is a poor screening method, as discounts are the most volatile factor in any relationship. A much more effective question is simply: Do you sell retail? The answer reveals where the partner prioritizes their interests in a conflict, and it cannot be ambiguous. If the answer is yes, any commitment to price protection for distributors is temporary, as the protector is also the beneficiary when the deal is broken. If the answer is no, ask for verification: who sells this brand on the platform, and does the importer have an official storefront? Partner trust in this industry doesn’t come from promises; it comes from verifiable commitments.
Critiquing the retail argument to understand the market.
The most common argument sounds quite reasonable: you need to sell retail to understand consumers and know which products sell. This argument is flawed because it equates the need for information with the need for revenue. To understand the market, an importer has many cheaper and less disruptive ways. The first is to obtain sales data from the dealer network itself, in exchange for discounts or display support; dozens of sales points provide a much more accurate picture than a single booth. The second is to conduct regular surveys of breeders and sales staff at the counter, where feedback on taste, digestion, and return rates is most readily available. The third is to operate a non-commercial model store, located in a warehouse or showroom, used for testing displays and training, not for taking orders from walk-in customers. The distributor should consider which method the supplier chooses as an indicator of their seriousness.
The price of discipline and its long-term rewards.
Let’s be frank: the non-retail distribution model has its price. First-year revenue is lower because each order goes through a distributor and is subject to a shared profit margin. Product coverage is slower because they have to wait to find suitable partners instead of opening their own stores immediately. Cash flow is also tighter due to the credit terms associated with wholesale sales. In return, what’s built is a completely different asset. A system of several hundred self-operated sales points, finding their own customers and providing their own advice, will generate stable sales volume that no importer can achieve through advertising alone. More importantly, it doesn’t depend on the ever-increasing advertising costs on e-commerce platforms. In other words, retail buys short-term growth by selling long-term capacity. Distributors should accept that disciplined partners tend to have fewer flashy promotions, but much more stable prices.
Written commitment from the Pet Food importer: No retail sales.
A commitment is only valid when it’s in the contract and has enforcement mechanisms. The distributor should request four clearly stated points. First, a clause stipulating that the importer will not sell directly to the end consumer, in any form, including through e-commerce stores under different names. Second, a proposed nationwide unified retail pricing policy, along with a mechanism for handling price undercutting by distributors, because price protection for distributors is only truly possible when a two-way market price system is implemented. Third, principles for allocating goods when supply is insufficient, clearly stating priorities and how to notify in advance. Fourth, a commitment regarding the geographical scope and density of sales points, so the distributor knows how many neighbors will be selling the same brand. These four clauses do not pose difficulties for any party intending to do business long-term, and therefore they are quickly categorized.
Petkin and the Pet Food importer model do not sell retail.
Petkin imports and distributes pet food, and we choose not to sell directly to consumers through retail outlets. This choice stems from a simple calculation. With only about 5% of dogs and cats in Vietnam using specialized pet food as per the Ministry of Agriculture and Rural Development regulations, the biggest challenge for the industry is convincing the remaining 95%, and that can only be done at the counter by the person directly interacting with customers every day. We cannot handle thousands of such consultations, so it makes sense to strengthen the people already doing it. Therefore, Petkin’s resources are focused on official imports, maintaining stable prices, and securing inventory for our system. If you are looking for a long-term partner, ask questions about retail practices with every supplier, including us, and request written answers.