Chewy business model and how does it make money (2022)

Chewy makes money in a variety of ways. Here is a detailed overview of their revenue streams, as well as the Chewy business model, year-over-year revenue, and how Chewy works.

Chewy is an e-commerce company that offers various pet-related items both online and at 17 retail locations around the United States.

Chewy business model and how does it make money (1)

What is Chewy?

Chewy is an online retail and distribution business for pet owners, offering an easy and adaptable platform for customers to order pet food and pet-related items. Pet owners may choose from over 2,000 brands and categories including food, vitamins & supplements, toys, beds, and many more.

Furthermore, goods are available for practically every commonly kept animal. Dogs, cats, fish, birds, bunnies, reptiles, horses, and other animals are examples.

They have approximately 7 million things for sale in their store, with prices ranging from $1 to over $200.

Users may then personalize their purchase by selecting parameters such as pet size, breed type, age group, weight range, and more. Chewy has around 20 million consumers who shop the company’s 60,000+ goods on a daily basis.

Chewy: Origin & company history

Chewy is an online pet store based in the United States.

Ryan Cohen and Michael Day created the firm, which is headquartered in Florida, in 2011. The two met in a Java chat group and discovered that they shared the same interests. While Day was looking for a programmer for his website, Cohen was working as an affiliate marketer.

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They started an online jewelry business with $150,000 of their own money at first. However, due to a lack of enthusiasm for the business, the enterprise was a failure. They then pooled their leftover funds to buy pet goods from distributors. Soon later, a website was built, and a third-party fulfillment facility was arranged.

Chewy currently has over 7 million pet products for dogs, cats, birds, rabbits, fish, and reptiles.

Chewy was purchased by PetSmart for $3.35 billion in 2017. This was the highest-value acquisition of an eCommerce company at the time.

How does Chewy make money?

The chewy business model involves two major revenue streams. Chewy makes money by selling pet food and other pet-related products on its website. Health goods, toys, training equipment, and animal housing such as kennels or aquariums are examples of non-food things.

Customer service

Because the pet sector is as competitive as it is lucrative, the firm strives to differentiate itself by providing exceptional customer service.

Customers who have lost their dogs have been known to get condolence flowers from Chewy. On occasion, the firm may give clients pet drawings or handwritten messages.

How else does the organization set itself apart? Continue reading to find out!

Chewy business model and how does it make money (2)

Autoship customer sales

What is Chewy Autoship – Chewy’s Autoship program makes it simple for you to set up recurrent deliveries and save money on items you purchase frequently. With your first Autoship, you’ll get 35% off your order, but your discount can’t exceed $20. On all subsequent Autoship orders, you will also receive a 5% discount on select brands.

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Chewy generates all of its money through eCommerce sales, but in 2020, $4.89 billion, or 68.4 percent of Chewy’s total revenues, came from revenue produced through its Autoship subscription program.

Chewy’s auto-ship subscription offering allows clients to set up periodic product delivery with no membership costs.

Customers that use Chewy Autoship on their orders can save up to 35% on their initial order and 5% to 10% on subsequent recurring orders. Chewy Autoship users also get access to Chewy’s Pet Health service, which includes completing Pharmacy prescriptions, adding Vet Clinics, and digitally communicating with Vets.

In 2020, income earned by Chewy’s Autoship subscription service accounted for 68.4 percent of total revenues.

Connect with a vet

If Chewy client has a question about their pet’s health or behavior, they may use the Connect with a Vet service or a telehealth service to get in touch with a licensed veterinarian.

People also need to transfer their pets to veterinaries. For this, pet taxis are a preferable solution. You can also start with a smart pet taxi solution. Pet boarding and traveling is a smart business solution. Jugnoo.io can help you build a pet boarding app. Check out their website.

The objective is to improve the stickiness of its product even further. People are typically unwilling to transfer platforms and services they have grown to trust due to switching expenses. Pets, which are very sensitive issues for many people, accentuate this.

Customers had previously noticed that Chewy has begun to raise pricing in several of its product categories. As a result, the corporation may soon declare that some of its ancillary services would be charged as well.

Value proposition

Efficient delivery service: the company offers free one-to-two-day shipping on purchases over $45, as well as an auto-shipping option that allows clients to arrange goods to be dispatched automatically.

(Video) Chewy Affiliate Program Review - Can You Make Money With It?

Wide range of products: Offers a wide range of products from numerous brands, including toys, food, treats, and equipment for a variety of pets, such as dogs, cats, fish, reptiles, and rabbits.

Accessibility and flexibility: The ​​company maintains an easy-to-use online platform where consumers can browse items, schedule delivery, and manage payment settings. As well as provide 24-hour phone and online customer care.

Simple returns procedure: The company provides 365-day hassle-free returns to consumers who are dissatisfied with their purchases.

Industry expertise and knowledge: Chewy business model, employs a number of customer care representatives who can help clients with questions and inquiries about specific goods and brands.

Chewy business model and how does it make money (3)

Key partners

The chewy business model also consists of key partners to ensure smooth business operations.

Supplier and vendor partners: include vendors of items and supplies that the Company resells through its online and phone sales channels, as well as providers of technology, services, and equipment used throughout the company.

Distribution and delivery partners: These are third-party distribution and delivery service providers who help the Company with its shipping services.

Rescue & shelter partners: Group of non-profit and philanthropic organizations interested in animal rescue and care with which the Company partners on various initiatives

(Video) Chewy Affiliate program | Earn Money from Chewy.com

Strategic & alliance partners: A group of firms with which the Company works on collaborative initiatives and mutually beneficial activities.

Company cost structure

Chewy incurs expenses for the procurement of supplies and equipment, the management of its supply chain, the development and operation of its online sales platform, the maintenance of its IT and communications infrastructure, the operation of its logistics and distribution infrastructure, the management of its partnerships, and the retention of its employees.

The majority of the Company’s expenses are related to the purchase of products and supplies. As well as the payment of salaries and benefits to its staff of over 1,200 people. It also incurs substantial occupancy costs as a result of its network of offices, distribution centers, and warehouses.

Chewy business model and how does it make money (4)

Chewy profits, funding & revenue:

Chewy has garnered $451 million in venture capital investment over seven rounds, according to Crunchbase.

Among the notable investors are BlackRock, Greenspring Associates, New Horizons Venture Capital, Lone Pine Capital, and others.

Chewy was valued at $8.8 billion when it went public in July 2019, raising an additional $1.02 billion. The corporation is now worth more than $34 billion.

Chewy reported yearly revenues of $4.85 billion for the fiscal year 2020, up more than 37% from the prior year. Due to different growth initiatives, the corporation continues to lose money. In 2020, the net loss was $92.5 million, including $129.2 million in share-based compensation.

Chewy’s publicly available financial records, including annual reports, can be found on their website in the investor area.

(Video) Chewy CEO talks earnings and growth strategy

How to start your own online pet store

If you’re looking to create your own online pet store, the Jungleworks suite would be the best tool for you as it is a combination of powerful ordering, delivery, and growth tech stack. Book a demo with our business experts today and build your own online pet store with ease and without coding today.

FAQs

What is Chewy's strategy? ›

Chewy's strategy, from the beginning, has been one of winning over customers with online convenience and 24/7 customer service staffed by passionate pet owners, and to make repeat purchases easy with its Autoship feature.

What kind of business is Chewy? ›

Chewy, Inc. is an online retailer of pet food and other pet-related products. The Company through its retail website and mobile application offers pet food, treats, supplies, and healthcare products for dogs, cats, fish, birds, horses, and reptiles, as well as provides a range of pet clothing and medications.

Does Chewy make a profit? ›

Chewy makes money by selling pet food and other pet-related products on its website.

Why was Chewy so successful? ›

Increased its brand reputation thanks to its unique branding and excellent customer service. Unique personal touches include personalized hand notes and oil paintings of pets. Chewy built warehouses to fulfill orders more quickly, sent personalized hand notes, and even oil painting of pets.

Is chewy a hybrid? ›

For Herdtner and Chewy, the answer lies in the hybrid work model that employees – both at Chewy and in general – seem to favor over fully remote or fully in-person arrangements.

Does chewy make its own products? ›

American Journey is exclusively made for and distributed by Chewy! We work closely with production partners to create and develop our own recipes and oversee production to ensure it adheres to our quality standards.

Who is Chewy's target audience? ›

Stella & Chewy's goal is to help pet parents in making one of the most important decisions when it comes to their fur children: choosing the best food. Because Stella & Chewy's raises the bar in the industry, its target audience is dog and cat parents who go above and beyond for their pets.

What is the purpose of Chewy company? ›

To be the most trusted and convenient destination for pet parents (and partners), everywhere. Our Culture We work hard, and we win. At Chewy, we strive to deliver the best products with the best service – and we want to become even better.

Who are Chewy's competitors? ›

Chewy competitors include BARK, Amazon, Wayfair, Bitnami and Petco. Chewy ranks 1st in CEO Score on Comparably vs its competitors. See below how Chewy compares to its competitors with CEO Rankings, Product & Services, NPS, Pricing, Customer Services, Overall Culture Score, eNPS, Gender and Diversity Scores.

Is Chewy in financial trouble? ›

Based on the latest financial disclosure, Chewy Inc has a Probability Of Bankruptcy of 1.0%. This is 97.58% lower than that of the Consumer Cyclical sector and significantly higher than that of the Internet Retail industry.

Is Chewy losing money? ›

Net loss of $73.8 million, including share-based compensation expense of $85.3 million. Net margin of (0.8) percent expanded 50 basis points year over year. Adjusted EBITDA(1) of $78.6 million, a decline of $6.6 million year over year. Adjusted EBITDA margin(1) of 0.9 percent declined 30 basis points year over year.

Why is Chewy going down? ›

Chewy is now down a painful 44% so far in 2022, according to data provided by S&P Global Market Intelligence, while the S&P 500 is down 18%. The broader market decline was a factor in Chewy's slump this week, but the bigger driver was management's update on the pet supply retailer's latest operating trends.

What is the culture at Chewy? ›

Our mission is to be the most trusted and convenient online destination for pet parents (and partners) everywhere. We view pets (and pet parents) as family and are obsessed with meeting their needs and exceeding customer expectations through every interaction.

Why is Chewy going up? ›

Shares of Chewy (NYSE: CHWY) jumped this week, surging 24% through Thursday trading compared to a 4.4% gain in the wider market. The key factor behind Chewy's rise this week was a report from a market research company saying that sales trends could be strengthening in the current quarter.

Is Chewy good company? ›

Out of 2800 Chewy employee reviews, 90% were positive. The remaining 10% were constructive reviews with the goal of helping Chewy improve their work culture. The Legal team, with 100% positive reviews, reports the best experience at Chewy compared to all other departments at the company.

How do I quit Chewy? ›

How to cancel Chewy.com Autoship
  1. Log into your Chewy account.
  2. Click on Manage Autoship.
  3. Select your Autoship plan.
  4. Click on Cancel This Autoship at the bottom of the page.

Does Chewy have good employee benefits? ›

We offer competitive salaries and 401k, unlimited time off, comprehensive medical, dental, and vision benefits, in addition to wellness programs, online communities, and resources for improved physical and mental health... enabling you to be your best self - in and outside of work.

What benefits does Chewy offer employees? ›

We offer comprehensive medical, dental, vision benefits, in addition to wellness programs and resources... enabling you to be your best self in and outside of work. We're committed to providing impactful and relevant learning experiences, resources, and tools to help our Pack Members grow in their careers.

Is Chewy an ethical company? ›

HONEST AND ETHICAL CONDUCT

The Company excels through passion, dedication, and hard work, not unethical or illegal business practices.

Is Chewy sustainable? ›

Chewy, as you know, is a young company, and so far our sustainability efforts have started in the fulfillment center, where the [environmental] footprint is the largest, and we've transitioned to energy efficiency with solar lighting and panels and green initiatives and all of that.

Does Chewy use third party sellers? ›

Chewy uses a network of independent product and content suppliers, distributors, veterinarian clinics and other third parties to supply some of the Products and content advertised on the Site.

› Pets › Pet Stores ›

Chewy is an online pet supply retailer that offers a wide variety of foods, treats, supplies, and medicines. Customers can purchase goods for a wide variety of ...
“I can't say enough good about chewy. I'm going through a heartbreak losing my mini dachshund that I had for 15 years who just recently passed. In closi...

Chewy (company)

https://en.wikipedia.org › wiki › Chewy_(company)
https://en.wikipedia.org › wiki › Chewy_(company)
Chewy, Inc. is an American online retailer of pet food and other pet-related products based in Dania Beach, Florida. In 2017, Chewy was acquired by PetSmart for...

Who is Chewy's target audience? ›

Stella & Chewy's goal is to help pet parents in making one of the most important decisions when it comes to their fur children: choosing the best food. Because Stella & Chewy's raises the bar in the industry, its target audience is dog and cat parents who go above and beyond for their pets.

What is the purpose of chewy company? ›

To be the most trusted and convenient destination for pet parents (and partners), everywhere. Our Culture We work hard, and we win. At Chewy, we strive to deliver the best products with the best service – and we want to become even better.

How much debt is CHWY? ›

Compare CHWY With Other Stocks
Chewy Debt/Equity Ratio Historical Data
DateLong Term DebtShareholder's Equity
2020-01-31$1.34B$-0.40B
2019-10-31$1.25B$-0.39B
2019-07-31$1.18B$-0.36B
16 more rows

What is Chewy's revenue? ›

› chewy-com-my-experience-... ›

Chewy is a pet supply delivery company that was established in 2011. I use them to order supplies for my cats, but they have products for basically any type of ...

Is Chewy.com tech?

https://www.protocol.com › is-chewy-pet-supplies-tech
https://www.protocol.com › is-chewy-pet-supplies-tech
Is Chewy tech? From poaching tech talent in Beantown and breaking ground on its first automated fulfillment center to using its Chewy Innovation Blog to wax poe...

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