Who Says There’s a Bubble? Quidsi Launches Pets.com Copycat.

Pets.com serves as the symbol for the height of the bubble, as one of the most memorable flameouts of its time.

But that isn’t deterring Quidsi from giving the online pet supplies business another try.

The company, which is the mastermind behind Diapers.com, BeautyBar.com and Soap.com and was bought by Amazon for $545 million last November, is launching Wag.com, an online purveyor of dog food and cat litter and 10,000 other products for your furry, feathered and scaly friends.

When Quidsi’s founders Marc Lore and Vinit Bharara tell me that they are seriously launching an online pet store, I have to ask: Does this mean we are in another bubble?

Lore, who has a little expertise in this matter as an investment banker turned entrepreneur, says we aren’t.

“Back then, the economics didn’t work and there were no revenues. It’s night and day … Today people are confusing high valuations and a little frothiness with crazy.”

Or maybe the two have been listening to one of Silicon Valley’s better-known VCs, Marc Andreessen, who predicted at D9 that “almost every dot-com idea from 10 years ago that failed will succeed. Pet food, diapers, deliveries, they’re all working again now.”

“It is a lot easier today,” Lore admits. “Back then [Pets.com] started off with front-end marketing. They didn’t invest what they needed to do on the back end, like warehouses and logistics. I’m sure that was the plan to do that, but they never had the opportunity.”

The launch of Wag.com represents Quidsi’s first as an independently operated subsidiary of Amazon.com. The company has many other sites in its pipeline, the next being a toy portal at Yoyo.com.

Bharara said they’ve developed a process for selling even the heaviest, most expensive items to ship — even dog food and baby formula.

Wag.com will be similar to Quidsi’s other verticals by offering free two-day shipping on purchases of more than $49. It will have the same 365-day return policy and customer service as its other sites.

(As a side note, Pets.com redirects you to PetSmart.com, which is currently charging $5.99 shipping on orders of $60 or more.)

Bharara said the strategy is to build a relationship with the customer by getting them to buy everyday stuff and then selling them on the higher-margin stuff. On Wag.com that might mean starting off with dog food or cat litter and then transitioning to dog toys and stylish cat collars. “It is very costly, but we’ve set it up well to do it fast and cheap.”

Before the company ever made a dollar in revenue, the founders spent two years building out its technology platform, which includes using robotics and software at its three warehouses around the country.

“Even with all that, it is expensive,” Bharara added. “It’s going to be expensive, and some people won’t make that investment, but if you play it out for the long run, the payout is well worth it.”

The company can no longer talk about its revenues because it is owned by Amazon, but Lore said that last year its revenues totaled $300 million, and most of that came from Diapers.com. Soap.com had just launched that summer.

One of the keys in launching multiple brands is being able to cross-sell across the sites and have one common shopping cart. That means shoppers can add items to their Diapers.com account and then check out on Wag.com or Soap.com.

“It seems fairly obvious that someone should be able to deliver the most basic household items,” Lore said. “We think that basic invention should be able to get done. When you have some perspective on all the other things we’ve been able to accomplish, it gives you some sense that we should be able to do this, too.”

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work