How where you buy dog food impacts price and quality
You can buy dog food from a lot of places these days. From supermarkets, pet stores, vets, online stores and direct from some brands themselves. So how does where you buy dog food from impact the price and quality?
How Mark-Up Works
The first step is to understand how markup works. Every time a product is sold along the supply chain, businesses will add a mark-up % to work out the price they need to sell it for. This mark-up is to cover all their expenses like rent and wages as well what they hope is some profit remaining. The more times a product is bought and sold before you buy it, the lower the % of that price was spent on raw ingredients.
Most dog food is bought from supermarkets. Dog food brands sell direct to supermarkets and supermarkets generally mark up around 80%. Supermarkets only sell things that move a lot of product otherwise you lose shelf space, so they love sales. How often do you see discounts of 25% or even 50% off? It is not the supermarket that generally absorbs this cost, it is the brand. So they need to make sure the price they sell to the supermarkets still makes them money at massive discounts. Supermarkets now also have their own brands of products, sometimes made by the same manufacturers as other branded product on the shelves. Put all this together, and supermarkets are where you will find the cheap dog foods- mostly grain and cheap fillers.
Pet Stores are the next most popular place to buy dog food. The biggest chains will buy some of the food direct from brands, but most pet stores will buy from a wholesale distributor. Pet stores then mark-up to approx 100%. The big chains have now also followed the supermarkets by starting their own brands and having regular sales. The quality of the food in pet stores is generally higher than supermarkets, but the price is much higher.
Online Pet Stores
Online stores are the same as pet stores. Instead of spending lots of money on staff and rent, it generally goes to online advertising and shipping. Some will stock a broader range of products so that you can buy things usually sold at supermarkets right through to product only available at vets. If you live in a capital city, you will probably find these better value than physical stores.
Vets generally sell very specific dog food targeted at specific health issues. Once again it is bought through distributors, and they don’t sell much off it, so the mark up is the largest of all channels. Until recently the food they sold was considered therapeutic and was regulated by APVMA. It is now unregulated like all other pet food. These foods are often very high in grains but have some special functional ingredients or formulations you don’t get elsewhere. Buying from your vet will definitely be the highest prices you will find and would be like buying all your food from a pharmacy.
Direct from Brands
In the last 12months, a new way of buying dog food has emerged that has the potential to shake up the industry. These are the new Direct to Consumer Brands. Buying directly from the brand itself cuts out all those buy and sell mark-ups along the way. The result is a lot more of your money is going to ingredients. Brands can use this two ways. They can either sell their product cheaper than you could get the same elsewhere, or try to keep to a similar price, but invest more in quality ingredients. The main problem with this model is that dog food is heavy and so is expensive to ship long distances. This new model has the potential to be the best value for money, and more people are switching every day.
So why is it only new brands that are doing this? Well, the retailers have a lot of power. If they think that the brands are trying to go direct to the consumer, they will de-range them, and that is too significant a risk for existing brands to take.
Now you understand the different places to buy dog food, read this to learn how to choose the best dog food.