Retailers benefited from the expansion of the Internet, which contributed to improved methods of conducting business in the areas of communication, delivery of content, reach and so forth.
Vitacost.com, headquartered in Boca Raton, is a Florida-based leading online retailer and direct marketer of health and wellness products, including dietary supplements, as well as cosmetics, organic, body and personal care products, sports nutrition and health foods.
The company was incorporated in 1994, but it was 1999 when it entered the e-commerce area. It went public in September 2009.
In addition to the 30,000 SKUs that are offered to the customers, from 1,600 or more third-party brands, Vitacost has its own line of proprietary brands manufactured in its own plant in North Carolina, for which is using over 500 raw materials, imported from countries like Japan, Spain, France, Germany, China and for which it registered 75 trademarks.
The products are distributed from two main locations in North Carolina and Nevada. Vitacost underwent an expansion of the distribution facilities, which are able now to process 1000 orders per hour. Vitacost competes with businesses operating in a few distinct distribution channels, which include retail stores, online commerce, direct selling or catalog ordering.
In 2006, Inc. magazine included Vitacost in its list of 500 Lifetime Hall of Fame as one of the fastest growing businesses for five consecutive years, between 2001 and 2005. A few things made that possible: the vitamins and dietary supplements industry, estimated at $25 billion, went through a fundamental shift to online shopping and people got to be more concerned with prevention, versus care.
Vitacost’s success is a direct result of its business model. It kept its promise of delivering wholesale prices on thousands of products, most of them carrying a discount of anywhere between 30% to 75% versus the over the counter retail level. They managed to make this possible by constantly increasing their market share and benefiting from economies of scale. They also maintained the $5 charge for shipping within the US, regardless of the amount being ordered, while offering timely delivery and superior customer service. They are backing their products with a 30 day money back guarantee, when you get refunded if you are unsatisfied for any reason with your purchase.
The company is also trying to educate the public, through its website and catalogs that provide tips and resources on healthy living, medical developments or the attributes of the products. Vitacost is also known for its high conversion rate, the percentage of the casual visitors who end up making a purchase, that is considered to be a result of the promoting reviews.
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