Amazon is the largest e-commerce giant currently running in multiple countries. This platform offers products related to every category from food to electronic appliances. However, the platform only used to sell books in 1995 and expanded over time. In 2000, it started Amazon prime-membership for its customer providing free 48 hours delivery within US. According to Amazon’s website, current Amazon Prime membership rates are $14.99 a month or $139 per year.
On the other hand, Chewy, founded in 2011 by Ryan Cohen and Michel Day. This is a $11 billion dollar platform offering more than 100000 pet-related products such as food, multivitamins and beds. You can also get their $99 monthly subscription plan for dogs and cats. While chewy has limited shoppers in the market, their investor management cost is relatively low.
You may consider them the same business with two different names. However, both platforms differ in their business models, pricing strategies and audience. This blog will explore everything you need to know about these e-commerce platforms.
Product line
Amazon boasts an extensive product line spanning countless categories, including pet supplies, offering everything from food and toys to health products and accessories. It serves as a general marketplace for pet owners and beyond. In contrast, Chewy is a dedicated pet-focused platform, providing a specialized range of products tailored to the needs of pet parents.
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Category |
Details |
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Pet Food |
Dry food, wet food, freeze-dried food, raw diets, specialty diets like grain-free or weight management. |
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Treats and Chews |
Biscuits, bones, jerky, dental chews, and training treats. |
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Pet Accessories |
Collars, leashes, harnesses, pet beds, carriers, crates, and travel gear. |
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Grooming Supplies |
Brushes, shampoos, conditioners, nail clippers, and deshedding tools. |
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Pet Health Products |
Flea and tick treatments, supplements, vitamins, first aid kits, and ear cleaners. |
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Training Tools |
Training pads, clickers, bark control devices, and pheromone sprays. |
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Toys and Enrichment |
Chew toys, puzzle feeders, balls, squeaky toys, and interactive gadgets. |
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Aquarium Supplies |
Tanks, filters, heaters, water conditioners, and fish food. |
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Reptile Supplies |
Terrariums, heat lamps, substrates, and specialty foods. |
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Bird Supplies |
Birdcages, perches, feeders, and seed blends. |
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Small Pet Supplies |
Bedding, cages, exercise wheels, and food for rabbits, hamsters, and guinea pigs. |
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Horse Supplies |
Saddles, bridles, grooming tools, and horse feed. |
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Subscription Services |
Amazon Subscribe & Save for recurring delivery of pet essentials. |
While Amazon’s range is broader, Chewy’s curated focus offers depth and personalization for pet owners.
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Category |
Details |
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Specialty Pet Food |
Prescription diets, veterinary-approved formulas, grain-free, freeze-dried, and raw food. |
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Treats and Dental Care |
Dental treats, natural chews, training treats, and specialty treats for sensitive pets. |
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Pet Health Products |
Prescription medications, flea and tick prevention, heartworm treatments, and probiotics. |
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Grooming and Wellness |
Professional grooming tools, hypoallergenic shampoos, conditioners, and soothing balms. |
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Pet Accessories |
Personalized collars, engraved tags, orthopedic beds, crates, and feeding stations. |
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Toys and Enrichment |
Interactive puzzle toys, durable chew toys, training toys, and plush companions. |
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Bird Supplies |
Unique toys, premium seed blends, vitamin-enriched feed, and spacious birdcages. |
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Aquatic Pet Supplies |
Specialty tanks, reef supplies, protein skimmers, and custom lighting for aquatic pets. |
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Reptile and Amphibian |
Terrariums with heating and UV systems, reptile-safe food, and decor for habitats. |
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Small Pet Supplies |
Organic hay, specialty bedding, chew toys, and customized habitats for rabbits, guinea pigs, etc. |
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Auto-ship Services |
Scheduled delivery of food, medications, and other recurring pet essentials. |
Business Model
Amazon Business Model and Cost Structure
Amazon’s business model is vast, offering various ways for customers, sellers, and Amazon itself to generate revenue. Below are the key components of Amazon’s business model and associated costs:
- Retail Model: Amazon directly sells products to consumers and earns revenue by adding a markup to the cost of goods sold. This varies depending on the product and category.
- Marketplace Model:
- Referral Fees: Amazon charges a referral fee, which ranges from 6% to 45%, depending on the category (e.g., 8%-15% for most product categories).
- Fulfilled by Amazon (FBA): Sellers using Amazon’s FBA service pay storage fees, fulfillment fees, and additional charges for returns or long-term storage. The storage fees typically range from $0.75 to $2.40 per cubic foot per month depending on the season. FBA fulfillment fees start at around $2.50 for small items and increase with size and weight.
- Subscription Fees: Amazon charges a monthly subscription fee of $39.99 for Professional sellers, whereas Individual sellers can sell without a subscription but incur a $0.99 fee per item sold.
- Advertising: Sellers who use Amazon’s advertising platform pay for sponsored ads, which can vary depending on the competitive nature of the keyword but often range from $0.10 to $5.00 per click.
- Amazon Prime:
- Subscription Fee: Amazon Prime offers a subscription fee of $14.99 per month or $139 per year. Prime membership provides access to free shipping, video streaming, and other Amazon services.
- AWS (Amazon Web Services):
- Cost: AWS offers cloud computing services with a pay-as-you-go model. Pricing is based on factors like usage, storage, data transfer, and compute capacity. For example, Amazon EC2 instances can cost from $0.0116 per hour to more depending on the machine’s capacity.
- Device Sales: Amazon generates revenue from the sale of Echo, Fire TV, and Kindle devices, typically with a low profit margin. These devices act as gateways to increase sales within Amazon’s ecosystem.
Cost Summary for Sellers:
- Referral Fees: 6%-45%
- FBA Fees: $2.50 and up (based on size/weight)
- Monthly Seller Subscription: $39.99 (Professional Sellers)
- Amazon Prime Subscription: $14.99/month or $139/year
Chewy Business Model and Cost Structure
Chewy operates a highly focused e-commerce platform for pet products, emphasizing convenience, customer care, and subscription services. Here’s an outline of Chewy’s business model and associated costs:
- Retail Model: Chewy purchases inventory from manufacturers and suppliers, and resells directly to customers. It earns revenue based on markup and product sales.
- Subscription Model (Auto-ship):
Auto-ship Discount: Chewy’s Auto-ship service allows customers to set up recurring deliveries of essential pet supplies. This service offers customers 5%-10% discounts on recurring orders, depending on the product.
Free Shipping: Chewy offers free shipping on orders over $49. However, customers can incur a shipping cost of $4.95 for orders under this threshold.
Pet Health Products: Chewy offers prescription medications and works with veterinarians to fulfill orders. Prescription products may incur additional processing and verification costs.
Customer Support:
No Direct Cost: Chewy’s exceptional customer service is an investment in long-term customer loyalty, with no additional cost to customers for support calls.
Personalized Recommendations: The cost to Chewy for providing personalized pet care advice and customized product suggestions is not explicitly passed to the consumer but is embedded in their business operations and marketing strategy.
Cost Summary for Customers:
- Auto-ship Discounts: 5%-10% on recurring orders
- Free Shipping: Orders over $49
- Shipping Cost: $4.95 for orders below $49
Key Differences
Product Offering
Amazon provides a vast selection of products across nearly every category, from electronics to clothing, books, groceries, and more. It serves a broad customer base, allowing sellers to offer almost any product. In contrast, Chewy is a niche e-commerce platform that focuses exclusively on pet products, including food, health care, grooming supplies, and accessories. This narrow focus allows Chewy to deeply cater to pet owners’ specific needs.
Business Model
Amazon operates with both a retail model (selling its own products) and a marketplace model (allowing third-party sellers). Sellers pay fees like referral charges and FBA fees. Additionally, Amazon has subscription-based services like Amazon Prime. Chewy, however, operates purely as a retailer and does not have third-party sellers. It relies heavily on its subscription service, Auto-ship, which provides discounts and recurring orders for pet products.
Target Audience
Amazon serves a diverse range of customers worldwide, catering to individuals across various interests. Its product categories attract almost all consumer demographics. Chewy’s target audience, on the other hand, is much more specific: pet owners. Chewy customizes its offerings and services to meet the needs of people with pets, offering personalized recommendations based on pet health and age.
Subscription Services
Amazon’s subscription services like Amazon Prime offer a wide range of benefits, including free shipping, video streaming, and exclusive deals. The cost of a Prime membership is $14.99/month or $139/year. Chewy’s subscription, Auto-ship, focuses exclusively on delivering pet supplies at discounted rates, with free shipping on orders above $49. It encourages repeat purchases for essentials like food and medications but does not offer the broader lifestyle benefits of Amazon Prime.
Customer Support
Amazon provides robust customer support with a mix of self-service options and customer service representatives. It handles a wide variety of inquiries and problems related to the massive range of products it sells. Chewy, however, excels in customer service within its niche, providing 24/7 support tailored specifically to pet owners. Its staff is trained to offer pet care advice and resolve issues related to pet health and product concerns.
Marketplace vs. Direct Retail
Amazon allows third-party sellers to list and sell their products, which contributes to its vast product catalog. Sellers manage their stores but pay Amazon a referral fee and additional costs for fulfillment and advertising. Chewy, on the other hand, does not support third-party selling and operates exclusively as a retailer, sourcing and selling its own inventory. This direct relationship gives Chewy more control over product quality and customer experience.
Shipping Policies
Amazon offers free two-day shipping with Amazon Prime or has free standard shipping for orders over $25 (non-Prime). Its shipping services are fast and efficient. Chewy also offers free shipping on orders above $49, but unlike Amazon, which ships almost any type of product, Chewy’s shipping is exclusively focused on pet supplies. Chewy also provides fast shipping and reliable delivery for pet products, especially for recurring needs through Auto-ship.
Pricing Structure
Amazon has a complex pricing structure due to its combination of retail sales and marketplace listings. Sellers set their prices but must pay Amazon’s referral fees, FBA costs, and potentially advertising fees. Chewy’s pricing is straightforward, as it handles all retail sales and offers consistent prices across its product range. Additionally, Chewy’s Auto-ship service provides customers with recurring discounts of 5%-10%, while Amazon Prime members also get various shipping and content benefits.
Marketing Strategies
Amazon
Amazon’s marketing strategies are driven by data and a deep understanding of consumer behavior. One of the core strategies is personalization, where Amazon uses customer data to recommend products based on browsing history, past purchases, and search behavior. This targeted approach increases conversion rates and customer retention. Amazon also leverages SEO techniques to rank product listings highly in search engine results, attracting external traffic.
Another important strategy is Amazon Prime, which incentivizes customer loyalty through benefits like free shipping, exclusive discounts, and access to video streaming. Prime membership boosts sales by encouraging frequent purchases. Amazon also invests in pay-per-click (PPC) advertising, allowing sellers to promote their products directly on the platform to targeted audiences. Email marketing plays a vital role, with personalized emails promoting recommendations, deals, and exclusive offers. These combined strategies help Amazon dominate the e-commerce space by attracting a diverse customer base.
Chewy
Chewy’s marketing strategy focuses on building strong, long-term relationships with pet owners. One of the key elements is its Auto-ship program, offering discounts for setting up recurring deliveries of pet products. This service not only provides convenience for customers but also drives repeat business, creating a steady revenue stream. Chewy’s customer service is also central to its strategy. With 24/7 support and expert advice, Chewy fosters trust and loyalty among its pet-owner customers.
The company also invests heavily in social media marketing, where it shares engaging content like heartwarming pet stories, useful pet care tips, and funny videos. This approach strengthens emotional connections with customers. Content marketing is another important strategy, with Chewy publishing educational materials on pet health and care, positioning itself as a trusted authority. Chewy’s focus on personalized service, emotional engagement, and pet care expertise drives its success in the competitive pet retail market.
Account Creation
Amazon
Creating an Amazon account is simple. Users visit the Amazon website or app, click on “Create an Account,” and fill in details like their name, email address, and password. Once registered, they can customize their profile, add payment methods, and start shopping. Sellers go through a more detailed process by providing tax information, bank details, and verifying their identity.
Chewy
To create a Chewy account, users go to the website or app and click on “Sign Up.” They enter their email, create a password, and optionally add pet details for personalized recommendations. The account allows users to save payment methods, track orders, and set up auto-ship. Unlike Amazon, Chewy does not support seller accounts as it operates exclusively as a retailer.
Factors to Consider When Choosing a Platform
Target Audience: Consider the platform’s audience; Chewy specializes in pet products with a dedicated pet-owner community, while Amazon has a much broader customer base across various industries.
Fee Structure: Analyze the fee models—Amazon charges referral fees, fulfillment fees, and advertising costs, while Chewy generally offers competitive commission rates but targets a more niche market.
Market Reach: Amazon provides global exposure, making it ideal for businesses aiming for international growth, while Chewy primarily caters to the U.S. market.
Customer Support: Chewy offers personalized support, particularly in pet care, creating a more tailored experience. Amazon provides broader support but lacks the same level of specialization.
Product Category Compatibility: Ensure your products align with the platform’s strengths. Chewy is best for pet products, while Amazon covers almost all product categories.
Conclusion:
Choosing between Amazon and Chewy depends on your target market, product type, and marketing strategies. While Amazon offers global reach and versatility, Chewy’s specialized focus on pet products provides a more tailored approach for pet owners. Evaluate these factors to determine the platform that best fits your business needs.
FAQs
- Which platform is better for pet products?
Chewy is specialized in pet products and offers a dedicated audience, making it a great choice for pet businesses.
- Are the fees higher on Amazon than Chewy?
Amazon typically has higher fees due to its broader marketplace, including referral and advertising costs.
- Can I sell on both platforms?
Yes, many sellers choose to list products on both Amazon and Chewy to increase their reach.
- Which platform offers better customer support?
Chewy offers personalized customer support, especially for pet-related inquiries, whereas Amazon provides broader, less specialized support.
- Which platform has a larger market reach?
Amazon has a global presence, while Chewy mainly focuses on the U.S. market.
