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Business Operations Business Models

How Does Chewy Make Money (Business and Revenue Model)

The Chewy business model

How Does Chewy Make Money?
Here’s what you should know:
  • What is Chewy, and how does Chewy work?
  • How does Chewy make money?
  • Autoship Customer Sales
  • Other Non-Autoship eCommerce Sales
  • Chewy’s profit and revenue
  • What is the Chewy business and revenue model?
  • Chewy’s funding and market cap

How does Chewy make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Chewy business model, their year-over-year revenue, and how Chewy works.

What is Chewy, and how does Chewy work?

Chewy is an eCommerce retailer that sells pet food and pet related products.

Founded in 2011 by Ryan Cohen and Michael Day, Chewy went on to get acquired by PetSmart on April 18, 2017, for $3.4 billion. Since that time, Chewy has become one of the largest pet food and pet related retailers. Partnering with more than 2,500 pet brands offering over 75,000 products to more than 20 million active customers.

How Chewy works is: Customers must first create an account to shop on Chewy.com. Once signed up, customers can browse from over 75,000 products on the site and checkout with or without Chewy’s subscription program, autoship, to set up recurring product deliveries.

Some of Chewy’s competitors include Petco, PetSmart, and other pet related product companies.

Chewy App in Apple App Store | Chewy Business Model | How Does Chewy Make Money?
Source: Apple App Store | Chewy

How does Chewy make money?

According to Chewy’s 2021 Q2 Form 10-Q, the company has more than 20 million active customers. So how does Chewy make money off of all these customers?

Below is a breakdown of how much money Chewy makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Chewy makes money (in 2021):

Chewy has a revenue model that makes money in two (2) ways – autoship customer sales and other non-autoship eCommerce sales.

#1. Autoship Customer Sales

Chewy makes all of its money through the sales on its eCommerce site, but $4.89 billion or 68.4% of Chewy’s total sales came from revenue generated through its Autoship subscription program in 2020.

Chewy’s autoship subscription program is a way for customers to set up recurring deliveries on products with no membership fees.

Perks of customers setting up Autoship on their orders is saving up to 35% on the first order and 5% to 10% on recurring orders, thereafter. Autoship customers also get access to Chewy’s Pet Health service, which includes filling Pharmacy prescriptions, adding Vet Clinics, and connecting with Vets on-demand virtually.

Chewy Autoship | Chewy Business Model | How Does Chewy Make Money?
Source: Chewy

Note: 68.4% of Chewy’s total sales came from revenue generated through its Autoship subscription program in 2020.

#2. Other Non-Autoship eCommerce Sales

The rest of Chewy’s revenue is made through its non-autoship sales on its eCommerce site.

As mentioned above, Chewy carries approximately 2,500 pet brands that offer more than 75,000 products ranging in price from a few dollars to a few thousand on its eCommerce site, chewy.com.

Chewy Prices:

  • Products can range from $1.27 to $1,188+

Chewy’s profit and revenue

In 2020, Chewy reported $7.15 billion in revenue.

Note: Because Chewy, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Chewy’s publicly released financial reports, including annual reports, through Chewy’s investor section on their website.

What is the Chewy business and revenue model?

Chewy makes money through a few revenue models that they combine within their company, they are:

  • Subscription based business model
  • Fee-for-service (FFS) business model
  • B2B2C (partnerships) business model

Chewy’s funding and market cap

According to Chewy’s Crunchbase profile, Chewy has raised $451 million over 7 rounds and has a market cap of $32.26 billion as of September 2021.