Why Is Chewy So Cheap? (10 Reasons Why)

Chewy has managed to grow into one of the leaders in the segment of national retailers focusing on pets. They have several models of dog feeders.

Chewy is one of the most affordable dog food brands available, because they use ingredients that are as close to natural as possible, and they use a lot less packaging.

Why Is Chewy So Cheap In 2022?

The company is cheap because it is a newcomer and is a one-stop shop for pet owners. Chewy has managed to keep costs low by focusing on the products and services it can provide while having a warehouse in every major city in the U.S. to deliver products to stores and to make fulfillment faster and more convenient.

The first reason is that Chewy has managed to remain so cheap, so keep reading to learn the following 10 reasons behind Chewy’s success as a bargain retailer!

1. Being Fully Online

It is a website-only business with no retail stores, making it difficult for their team to get to any of the locations to check everything in stock, check on store schedules, etc.

They don’t have to pay for the space, and there’s no rent or utilities for that space.

For Chewy, expanding means adding more items to their catalog. Occasionally new fulfillment centers or warehouses might be built.

2. Tying Bulk Buys to More Savings

Chewy has various initiatives to encourage customers to purchase in bulk.
They also operate a rewards program for customers who buy in bulk, for a $5 reward points, which can be redeemed for rewards at the company’s site.

To receive free shipping, you have to wait up to 45 days for your order, but if you do it through Chewy, they will ship your package to you for free.

To increase your chances of getting a free shipping, buy as many items as possible at once.

Chewy lets you set up regular deliveries for your favorite items so you never have to go shopping again!

I also think that it’s easier to set up large orders now because you can set up multiple deliveries within your account settings. It’s easier because you don’t need to set up one order for your entire delivery, you just need to set up 1 or more individual delivery orders.

3. Using Third Party Shipping

Chewy uses FedEx Home Delivery and other premium shippers to deliver its orders.

Chewy uses a service that has an established network of drivers and their own fleet, so it can keep costs down by not having to develop new drivers from scratch.

And Amazon Logistics would only have to be good enough to deliver $50 billion worth of packages annually to make this work.

4. Maintaining Relatively Small Scale Operations

Chewy has lower costs of doing business than its competitors, which means customers benefit and this is usually reflected in lower pricing.

Chewy does not have to take a lot of human resources in order to run the company.

The store allows you to pay with your Chewy card and never worry about the cost of the items you buy.

Chewy also has a limited delivery network, only shipping within the contiguous United States, not including Alaska or Hawaii. If you live in a small city, Chewy may no longer deliver.

Because the company doesn’t cross borders into other countries like Canada, it avoids having to pay customs fees. The same goes for shipping.

This is extremely useful for small businesses with large warehouses that want to get their product to customers easier, without the need of having to send large amounts of product back to the warehouse.

5. Receiving a Boost in Financing

When Chewy was purchased by PetSmart, the purchase was paid for in cash.

This allows Chewy to grow faster, and receive a lot more funding, and the company is now doing well.

The deal allowed Chewy to stay as usual, meaning its plans with the deal were even easier to implement with little hassle.

But it’s also possible to paraphrase these sentences by using the same words in the new sentences but in a different order.

6. Having a Year Round Business Model

Chewy does not have to try to fit all its business into certain seasons, it has all its products at all times like every other business.

Having a steady stream of sales means we don’t have to worry about paying suppliers and workers because they have a guaranteed paycheck every month.

7. Making Cheap Part of Its Growth Strategy

I know several of the companies that have been acquired by Chewy, that is why I know that Chewy sells for a lot less than the companies Chewy purchased it from.

Right now, Chewy is taking a lot of money and is reinvesting it back into the company’s growth. This includes advertising, distribution, and improving stock.

I think it was a strategy to be profitable by building the company.
If Amazon was to become profitable from the beginning, it would already have been profitable.
But the growth strategy is to grow big to get the revenue, so the focus is on growth.

8. Buying Goods in Wholesale

The company sells the products it sells directly to the manufacturers and in wholesale numbers, so it gets the best possible deals from these manufacturers, which translates into lower prices for the customers.

When you shop at Chewy, you can access special promotions only available through Chewy.com.
Chewy is the only platform that allows you to order from more than 150 brands.

9. Having National Coverage

I want to make a product for all of the US. My only constraint is that my customers can only ship to one of the 48 states.

For the most part, Chewy has warehouses and fulfillment centers in 11 states spread out all over the country.

Therefore, the company is able to ship anywhere within its stated region of operation (i.e. the US-West Coast) fast and cheaply.

10. Having Fewer Services

However, Chewy doesn’t have any services that draws people to their stores. They are just a site on the Internet.

These services include things such as vet care, grooming, and more, and they all increase the cost of operations, e.g. through the salaries for the people that perform these services, for starters.

I’ve always wondered when I need to ask my cats to stop doing that, why I have to pay for something I could do myself for free.

I’m glad you asked that question, because I didn’t know and I was worried. This is the best forum to get the answers to that question.

Conclusion

Chewy has successfully been able to cut costs by directly purchasing their products in wholesale. They have also taken advantage of shipping through third parties and online shopping, to reduce the cost of running their business.

Chewy has to focus on growing and building their customer base since they can’t afford to pay their debts due to the downturn in demand for pet products.