Exotic pets business

Exotic pets now represent a $15 billion industry. Plenty of entrepreneurs have found a way to make money peddling kinkajous, hedgehogs, and other rare beasts.

When Paris Hilton takes to the red carpet with a new look or a new man in tow, people buzz. So it's no surprise that little girls everywhere began begging their parents for kinkajous last spring, after the hotel heiress started surfacing at parties with an adorable kinkajou perched on her shoulder. Even after Baby Luv garnered tabloid headlines by biting Hilton, the nocturnal mammals remain objects of desire.

As it turns out, kinkajous -- not to mention hedgehogs, sugar gliders, llamas, and other exotic animals -- have become increasingly common as household pets. That growing demand has helped transform exotics into a $15 billion industry, with plenty of entrepreneurs finding ways to earn part or all of their livelihoods from related businesses.

So why is Fido, at least in some circles, losing his status as man's best friend? "People always want something that nobody else has," says Marc Morrone, owner of Parrots of the World in Rockville Center, N.Y, which sells parrots as well as pygmy possums and other mammals and reptiles. "It's human nature to want to stand out in a crowd."

Morrone opened up shop in 1978, and says that as the popularity of exotics has grown over time, the industry has been forced to rehabilitate what some consider an unsavory reputation through increased regulation of animal importation and sales.

"In the old days, people went out and they caught animals in the wild and they brought them back," Morrone says. "Those days are gone."

Such improvements have brought new opportunities -- and more entrants to the industry.

For Brigitte DeMaster, owner of Bahr Creek Llamas and Fiber Studio in Cedar Grove, Wisc., breeding llamas began as a 4H project for her children. Her family is in the dairy business, and at an industry convention, she met a colleague who also raised llamas on his farm. After visiting the animals, the family purchased four and started to show and train them. "They were very clean, quiet, and easy to raise," DeMaster says. "And we fell in love with their eyes."

DeMaster can sometimes be seen transporting one of the family's 35 llamas in her minivan as she takes them to nursing homes, schools, or parades. The DeMasters sell baby llamas, called cria, as pets or breeding stock, but the bulk of their income comes from shearing the llamas to make yarn from the fiber. What began as a kids' project has blossomed into a business that includes a yarn shop and spinning-and-weaving school.

"Since we were involved in dairy and livestock, it was an added value to the farm," DeMaster says. "We feel that it's really enhanced everything on our property."

When he needed to finance his seminary education, Mike Smith, of Jack-A-Roo's Bennett's Wallabies in Swansea, Ill., began raising wallabies. "Raising and selling the animals paid for my doctorate work," Smith says. "Then it paid for vacations and little extras along the way."

"Fifteen years ago, I was raising ferrets just for fun and enjoyed them," Smith says. "We were struggling and needed some extra income. We live in goat country, and someone had included a pallet of wallabies from New Zealand along with a shipment of goats. I wanted them but I couldn't afford them, so I asked a friend if he wanted to go into the wallaby business. He said yes, and I've been making money and having fun with it ever since."

For David Lombard, owner of birdfarm.com, exotic pets have been more than just a sideline business. Eleven years ago, he lost his job as a sales manager and decided to go into business for himself. At the time, he had two small birds, and he saw how people who buy birds also buy plenty of toys and accessories for their pets. He started selling birds and bird accessories through his website, then opened a retail store in Boardman, Ohio, three years later. He sells bird food and cages, as well as more unusual products such as bird diapers with a patented "poop-pouch" and a hands-free vest-style carrier which lets pet owners bring their small-bird wherever they go.

"At first it was really scary," Lombard says. "I had no retail business experience myself so I surrounded myself with the best people I could find."

"Before I started the business, I used the last of my savings to fly down to Florida and learn as much as I could from breeder friends," he says. "I knew if I was going to do this, and make a living at it, I had to learn from the people I was going to do business with."

His business has expanded quickly, outgrowing three retail spaces in the past seven years. He recently sold the Boardman-based retail store and plans to continue selling online and open additional stores in Las Vegas and Myrtle Beach, S.C. "Since a lot of my business is not local -- of 100 birds, only 35 stay in the area -- I can do it from anywhere," Lombard says.

Like Lombard, Ken Korecky, president of Exotic Nutrition, saw an opportunity in the exotic-pet accessories and food market. At the age of 17, Korecky convinced his father to invest in the pet store where his son worked. Father and son became partners and ran the store for 20 years. Korecky then entered the sales department of a wholesale pet supplier.

"When I recognized a need for 'species specific' products for the exotic pets many of the stores sold, I began formulating, manufacturing, and packaging products for the exotic-pet trade," Korecky says. "I originally marketed the products to the 100-plus stores the company I worked for serviced. When my business grew, and the product line was in full demand, I left the company to run my business full-time."

Exotic Nutrition originally only sold its food and other exotic-pet accessories wholesale to pet stores, but in 2001, Korecky decided to offer the products directly to the retail market. "Once we designed the website and marketed our products via the Internet, our business grew," he says. "Cash flow enabled us to then broaden our wholesale marketing campaigns."

Exotic Nutrition is growing about 20 percent a year, and Korecky expects the opportunities in the exotic-pet industry will continue to expand, if for no other reason than by law of the jungle. "A pet owner that purchases a pair of animals will sometimes end up with five or six animals after a few years," he says. "Then they sell the offspring, which in turn creates more hungry mouths to feed -- and more customers that require our products."

(c) Inc.com