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#69 – Ethical Breeding & The Economy…how are they related and unrelated

by | Aug 17, 2023 | Business Management, Dog & Puppy Management, People Management

In the last episode we discussed the idea of pausing your breeding program, what that might mean, what is happening in the economy, not just in the dog breeding market, but also in the economy as a whole.

Recently there has been a little confusion in the world of dog breeding. Some people are questioning if it is unethical to breed in a saturated market.

I thought this was a great opportunity to discuss what is ethical and unethical dog breeding. We’ll also talk about supply and demand and if that has an influence on whether breeding dogs is unethical.

Let’s talk about what ethical breeding is.

What is Ethical Dog Breeding

Ethical breeding, which I like to take a step further with honest breeding, is breeding with an intention to find the sweet spot of all parties involved. Who are all the parties involved? I’m glad you asked. Obviously there are the puppies and the buyers, then there is the breeding dogs, both studs and mamas. Then, the last part, the one many of you miss! It’s you, the breeder, and your family. Breeding has to work for you and your family for it to be honest in my book. No reason to breed if it makes you hate your life, and it definitely shouldn’t tank your finances, I never want you deciding if your kids get the new school clothes they need or if you can afford vet care or better quality dog food. I want you to have both.

Let’s talk about the puppy part of this. We have a responsibility to our puppies to give them the best opportunity for a high quality of life. This doesn’t just mean we raise them with love and care in a clean facility, but that we also think about the combinations of dogs we are putting together. A very common problem in German Shorthaired Pointers, my breed, is that breeders select for a super high drive dog that all it wants to do is hunt. They’ll literally hunt 16 hours a day, and then again in the middle of the night if you let them. This sounds like a super sexy selling point: my dogs LOVE to hunt! Yet, play that out for the family who goes bird hunting 6x per year. That means that 6 days out of 365 that dog is able to do the thing he was bred to do. What about the other 359 days? That dog is going to need an outlet for that bird drive. This might mean he lives on a hobby farm where he can terrorize the chickens and wild birds most of the day, or it might mean he needs the opportunity to run around in the wild for a while, so if you lived by a big park or some federal land, that would be ideal to take him to let him engage that nose.

What is Unethical Dog Breeding?

It would cross into unethical if we tried to breed this dog to be so birdy, then sold him to a family who lives in an apartment and doesn’t plan on ever hunting, and might be able to take him to the dog park once a month. That dog’s drives, his needs, won’t easily be met in an apartment. Does it mean it can’t be done? No, it doesn’t, I have a fair handful of dog owners who successfully have their GSP in an apartment, but they have their dog so involved in their life and daily tasks that it simply isn’t a solution for everyone.

As a breeder we have lots of options on how to handle this, we can market to people who live on land and have that sort of lifestyle, we can market to people who hunt all the time or have a lifestyle where the dog is always with them. We can also breed our dogs through selecting breeders and retaining puppies for our program that are less driven and better temperamented for a family lifestyle similar to what they’ll encounter.

In my case, I opted to reduce the excess drive in my dogs, better suiting them for families.

I know I’ve mentioned this before, but finding the right ideal puppy buyer is half the battle of running an ethical and honest breeding program. If they don’t fit, it’s not good for the dog nor the owner. Your job as a breeder is to bring these two into alignment, adjust your buyers or your breeders.

What Do You Do With Leftover Puppies?

I remember I was working with a guy who wanted to breed his female he bought from me, he was so good with her. We bred her and we were talking about puppies and selling them and he was like, “What happens if they all don’t sell by 8 weeks?!” It’s a question I hear frequently. It’s interesting how many people, ESPECIALLY in their first few litters, who don’t have all their pups sold by the time they’re 8 weeks old, have this question. It happens, people don’t know you yet, you’re still figuring out who will do best with your dogs, so your ideal puppy buyer is a bit more fluid. Anyways, I’m often surprised by how many people think puppies have an expiration date, like if they aren’t sold by 8 weeks they’ll somehow turn into pumpkins, and you’ll be stuck with these giant squash that’ll soon turn into mush…or where I live, they’ll turn into a feast for the javelinas, we have these giant rodents that look like pigs around where I live, google that if you want nightmares.

Anyways, your puppies aren’t going to turn into pumpkins. I promise. They might start turning into little velociraptors, but they are still salable.

What do you do when you have puppies who are over eight weeks? You just keep trying to sell them. There isn’t some magical thing that changes, you just haven’t found the right home yet.

Honest breeders take good care and provide quality of life for all their puppies and breeding dogs, no matter how old they are. We don’t skimp on vet care when it’ll really help, but that doesn’t mean you have to go to the vet for everything, maybe you’ve found some new solutions that are better priced and suited for your dogs.

Being an ethical and honest dog breeder means you are treating your dogs well, doing the right thing because it’s your responsibility. I’d expect a breeder to give the same care and love in an intentionally bred pup as I would an oops litter. If I sell a puppy for $200 or $2000, I’d expect that the same level of care went into that dog. That’s ethical, doing things right. Notice, I didn’t say I’d expect the same “cost” to go into that dog, but care. You don’t need to spend hundreds, definitely not thousands, of dollars to raise a puppy to eight weeks of age. Once you have your setup, your cost per puppy should be fairly low, I recommend around 10-15% of your total puppy price be the cost of raising your pups, including doing registration, vaccines, microchips, and puppy packs.

This means that if your dogs are $2500, your cost to produce and raise them is $250 or less. It also means that if I sold that puppy for $500 I’m still in the black on costs, my family might be upset, but I’m not taking financial resources away from the family.

Will there be unexpected things from time to time? Yes, they’re live animals, we aren’t perfect, dogs eat gross things, stuff happens. However, the goal is to take care of your dogs and do the best with your setup to avoid these excess costs. It’s also about putting systems in place that prevent you from needing to spend all this excess money unnecessarily.

You’ll lose money on some dogs, but that’s part of being ethical, you created this dog’s life, therefore it’s your responsibility. You’re responsible to find that pup a good home and, in all fairness, you should be there to support the owner throughout the life of the dog, and, if necessary, take the dog back and find him a new home. This is part of the game.

Being ethical is giving the dogs the best you can, regardless of the money you’ll make on them. Being ethical and honest is also about giving those puppies quality of life even if you don’t sell them right away.

Here is a place where UN-ethical breeders are very different. Often unethical breeders run the numbers on what will pay out, they are looking for the top of the bell curve for profit and seeing the minimal effort they can put in to get their pups sold for the price. They don’t consider the care the dogs need based on what is ideal for the dog, they base it off numbers and finding the best spot for profit. Unethical breeders adjust the quality of care they provide to their dogs based on their expected benefits.

This means they may not do the health testing assuming things are good-enough, they have less concern for what happens to the dog after they’re paid, they aren’t available to support their buyers.

Now here’s the thing, I get it, buyers can be needy and annoying. The goal, or at least my goal, is to help you, the honest breeders, to save time and energy, while providing better service to your buyers, making things easier to manage with your dogs, and to allow you to spend time with your family, so you never have to pick between dog breeding and your family. That’s an ugly place to be in. The technology today is amazing, there are so many ways to automate things, build processes, and other things that I can help you with to streamline this process, while not making you cookie cutter. I have personally spoken with hundreds of dog breeders and I’ve yet to find two breeding programs that were identical. Every single one is custom, and it should be, my goal is to help support you in that process, making things easier for you to accomplish, I know most of you are on your own, with a mostly supportive family, but maybe only with some part-time help.

Okay, so now we know, ethical breeding is all about HOW you take care of your puppies, breeders, and buyers, add in Honest Breeding, and that includes you, and your family benefitting.

Want to Get the Price Adjustments Based on Supply & Demand Cheatsheet?

Supply & Demand

Let’s discuss a little on supply and demand, this is a fairly basic concept that economists can make really fancy and intricate, but let’s keep it simple. I’ve already discussed in the last episode what has caused excess supply and reduced demand in the market.

Essentially right now, the market has more supply than there is demand. Supply and demand are an elaborate dance between buyers and products, and ultimately the result is the price. Price will change based on supply and demand. If the supply is low and the demand is high, you’ll see the price of the item increase. If the demand is low and the supply is high, then, naturally, the price will decrease.

Sometimes, when supply is in excess, similar to what we are seeing in the market with dog breeding, there is the potential that the price of production, the cost of creating and raising our puppies in this case, will exceed the price we can get for our puppies.

Now, if you’re following me, you know I’m all about making this process easier, and more structured, so you can reduce your overhead to produce high quality pups and place them in good homes without a hefty investment per pup. It can be done and ethically, honestly. Leaving you in profit.

However, reducing the cost of raising your puppies isn’t the only way to tackle this dilemma. Many companies who find themselves in this predicament opt to find better ways to market and explain the value of their product. For breeders, this means that we need to find a way to show our buyers that the price they are paying for our puppies, the price we are asking, is actually a killer deal for what they are getting.

In essence, if people aren’t willing to pay the price you’re asking, then they don’t think your dogs are worth that price. Often this is an education problem, they don’t know enough to know why you’re different, why your dogs are better, or what they are getting by getting your dogs over another breeder’s.

Think of how it goes when you go to buy something. Often there’s the cheap version, there’s the middle ground option, which is more than the cheap version, but is more durable, may have some extra features, then there is the fully-loaded option, with all the bells and whistles. There is a price difference for each one. While we may like the top-tier item, sometimes we don’t think the price is worth it. For example, if you can get a good steak for $20, do you want to spend $30 to get a slightly better steak? It all depends on how fancy you are with your steak. What about vehicles? Is it worth an extra $5000 to have leather seats? Maybe, maybe not? What if it was only $500 more to have leather seats…maybe more of you would say yes. See how the price difference for the benefits often dictates if buyers are willing to make that decision to upgrade, or in our case, opt to pay more for one of your dogs.

This is where a little bit of market research is important. If your dogs are 25% more than the average in your breed, will the buyers perceive getting at least 25% more value in going with you? Or will do they perceive you to be less than 25% better, in which case they won’t buy.

There is a lot of education to be done with dog buyers. It’s part of my goals for our community of Honest Dog Breeders. Essentially, there are still a lot of people who think all dogs in a breed are the same. While we breeders know that every dog in a litter is a little different. That’s a big gap in understanding. If we can educate buyers to find the right dog and we design our marketing around finding the right buyers for our dogs—the ones who have the right LIFESTYLE for our dogs—then that’s the sweet spot. It will help everything fall into place correctly.

Dogs are so unique that this isn’t an economy problem, it’s a marketing problem.

I will note that I believe there has been a bit of a bubble in the market that’s popping. I think a lot of breeds, doodle breeds especially, have been a bit inflated in their prices. What this means is these prices may normalize along with the economy, meaning these inflated prices will probably need to return to a slightly lower price. I don’t anticipate a crash in pricing, but I do expect to see a 20-30% price decrease. This means that the $4000 dogs will be down to $3000-3200, the $3000 dogs will be down to $2000-$2400. This hurts a bit, I get it, but you can still make great money with these prices. I expect to see a 10-20% decline in a lot of other breeds. This pairs with the normalizing of the market.

However, if you’re sticking to my suggested puppy cost being 10-20% of the price of the puppy’s sale price, then you should still be at a good profit. Essentially, I’d expect you to reduce your costs around 5%, and have a net profit margin of the original 100% – 20% in price adjustment – (20% + 5%) = 65% margin of profit on your original price, even at the reduced price. This means if your dogs sell for $2000, you used to have 20% in production cost, which means a net profit of $1600. If the price goes down 20% to $1600, then you spend 15% of the original price, $300, getting them ready to sell, so that means you’ll net $1300. You’ve lost $300 on this sale from what you were making before.

You’ll need to decide if this is worth it for you or not.

The other options are to reduce overhead by being more efficient in your operations, potentially passing some costs to the buyers, or buying in bulk, there are lots of options. You can also focus on producing higher quality pups and retaining your price or potentially even increasing it. Lots of that will play into niche markets if you can find yours. I have this information in a easy download using the form in the show notes below.

If your costs of production are well over 20% you need to evaluate what you are doing. I see a lot of breeders go overboard with the puppy pack, they’ll spend 10% of the puppy money on that, it’s not worth it. Get creative and personal with your puppy packs if that speaks to your ideal puppy buyer, but don’t buy them things they would expect to buy for their dogs, likes leashes and collars, this is part of them investing in their dog, taking ownership, and ultimately valuing their puppy more.

Well how does ethical and unethical breeding roll into economics and supply and demand?

Ah the question we’ve all been waiting for.

Simply put: it doesn’t. Supply and Demand doesn’t play into what is ethical or not.

If it did…then one day you could be ethical, then next day the market shifts and even though you’re doing the exact same thing, you’d be unethical. That doesn’t make sense.

Your quality of care and love to your puppies also shouldn’t change based on how much money they’ll make you. That would be unethical.

Being an ethical breeder has nothing to do with the market, nor the supply of dogs in the market. It is merely your ability to provide for your pups and give them the opportunity at a great life.

If the argument of being ethical was related to supply and demand, then it would be unethical to breed dogs if there are dogs without homes in shelters, but we know that doesn’t make sense. If you aren’t sure on those arguments, check out my episode on the adopt-don’t-shop-market and where they got it wrong.

The biggest flaw in the adopt-don’t-shop market is that they assume all dogs are the same. The truth is, all dogs are worth loving and deserve a good life, BUT they are NOT all the same. The same dog that does well in one home, will not be a good match for another home. Nothing is wrong with the dog, nor the family, they just aren’t a good fit.

People buy dogs from breeders to get their expectations met and reduce the probability of surprises.

If you are having a difficult time selling your dogs, there’s a good chance people don’t see how your dogs are any different from other dogs of your breed in the market, which, again, is a marketing problem. If people see other dogs in the breed at a lower price and don’t see why your dogs are worth the price difference, then that is also a marketing problem.

I’m not making any judgements on your breeding program or whether or not your dogs are worth the price difference, but it’s not me you need to convince, it’s your ideal puppy buyer. There are also breeders who raise their prices, but don’t do the work to justify what makes them different, they’ll be the breeders who have the hardest time getting their requested price.

So those are your options:

  • drop your price to be competitive.
  • reduce overhead to make more margin after reducing price.
  • reduce quantity of dogs produced to accommodate the inquires you’re getting to join your waitlist.
  • create better systems to provide improved service for the same or reduced cost (I’ve got lots of resources for you, both that are created and others that I’m working on releasing soon!).
  • really hone in on your ideal puppy buyer and make sure your dogs are the best dog for your buyers…then market it, effectively taking you and your dogs out of the market, since you have no competition for what you provide. Maybe that means changing lines, maybe that’s increasing the training you’re doing, or maybe it’s just getting more specific with your ideal puppy buyer.

Obviously you can do a combination of these. I believe the best choice is to do what’s right for you and your family, what feels in alignment with your goals.

Remember, I’m hosting an ideal puppy buyer cohort, which will take place over six weeks, one live 90-minute session each week, that’ll help you find and hone your ideal puppy buyer. You can sign up for the the interest list here.

I hope that helps bring your conscience peace if you were worried you were being unethical because of the market. The worst you’re doing is making a bad business decision by producing more dogs than you’re selling. So long as you aren’t dropping them off into the community to shelters and rescues, you’re fine.

Don’t forget to grab the cheat sheet to help you evaluate your options using the form below.

Thank you for joining me for another episode of the honest dog breeder podcast, with me, your host, Julie Swan. I’m really glad we get to have these philosophical discussions together, I enjoy them.

Thank you for being one of the honest dog breeders, your buyers and dogs are lucky to have you! Thank you again and I’ll see you in the final segment of this 3-part series where I discuss ways to reduce your breeding program, while not losing your bloodlines.

 

Show Notes

Referenced Links
Want to Get the Price Adjustments Based on Supply & Demand Cheatsheet?

Hey! I’m Julie Swan! I’m here to help you build a breeding business that you love, one that produces amazing dogs, places them in wonderful homes, gives you the life you want, also pays the bills!