The Pros and Cons of Selling on Walmart's Marketplace

Learn about:

• What Walmart's Marketplace is 

• Three pros of selling on Walmart 

• Three cons of selling on Walmart

• How to sign up for Walmart's Marketplace

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As e-commerce continually grows, more and more businesses are seizing the opportunity to reach out to new customers online. For many, Walmart Marketplace has become a place where that goal can be easily achieved. If you're a brand or independent retailer thinking about joining the ranks, it's important to know the full picture---both the perks and the pitfalls. 

What is Walmart Marketplace?

Walmart Marketplace is an e-commerce platform that allows third-party sellers to list and sell their products directly on Walmart.com. Unlike some marketplaces that serve as intermediaries, Walmart Marketplace gives sellers more control, allowing them to manage their own product listings, inventory, and fulfillment methods.
 

Source: marketplace.walmart.com

Sellers can opt into programs like Walmart's Expedited Delivery options that include OneDay, TwoDay, and ThreeDay shipping. Participation in these programs can increase Buy Box wins and higher search rankings due to improved listing quality. Sellers can manage expedited shipping themselves or through Walmart Fulfillment Services (WFS).

Source: marketplace.walmart.com/expedited-delivery/

With Walmart's enormous online presence, vendors can now sell to millions of customers who visit Walmart.com every month. For companies looking to gain more online exposure and profit from Walmart's considerable customer base, being part of Walmart's Marketplace is a very attractive option. However, there are several factors that each seller should consider before joining.

3 Pros of Selling on Walmart's Marketplace

1. Cost-Effective Entry

With no monthly, setup, or subscription costs, Walmart Marketplace provides a seller-friendly fee structure. Sellers are only charged referral fees, which vary by category of product and generally are taken off after a sale is made. Most vary from 5% to 20%. Both small and large businesses can use this model because it enables them to begin selling without incurring large upfront costs.  

Selling on Walmart Marketplace is a relatively small investment initially. eBay or Amazon requires investing sellers to pay a monthly fee. However, if you enroll as a seller on Walmart, you are only required to pay a fixed amount after you start selling your goods. The amount you pay is decided by the category of products that you prefer to present for sale.

Source: marketplace.walmart.com/pricing/

Walmart charges an average referral rate of 15% for its categories, with jewelry being the highest at 20%. In contrast, Amazon charges $39.99 per month in addition to seller fees that cost an average of 13% per referral.

2. Expanding Customer Base and Market Reach

According to MarketWatch, Walmart has invested heavily in expanding its e-commerce platform, allowing them to compete more directly with giants like Amazon. In 2023, Walmart's Marketplace sales surpassed $1 billion, growing more than 30% in the last year alone, demonstrating the platform's impressive growth. 

With millions of online visitors every month, sellers on Walmart Marketplace gain access to a vast and diverse audience. Walmart's continuous enhancements to its e-commerce platform---including omnichannel shopping options like online-to-store pickup---also boost sellers' visibility and potential for customer acquisition. As Walmart grows its online presence, sellers will continue to benefit from this increasingly powerful platform. 

3. Enhanced Brand Credibility

Walmart has been an established brand for a great deal of time now. E-traders of electronic goods, household appliances, home decor, and others have a great opportunity to demonstrate reliability online.

The Walmart API integrator assists every product category. Additionally, to outpace other sellers, it is a good idea to launch products with promotional discounts through the Walmart API integrator. The Walmart integration extension also offers a repricing alternative through which sellers can even win the Buy Box.

Additionally, Walmart.com is integrated to receive payments from all major credit card companies, gift cards, Paypal, Visa Checkout, Cash App, Chase Pay, Amex Pay, EBT, and debit cards. Walmart has partnered with Payoneer to pay out its Marketplace sellers on a weekly basis.

3 Cons of Selling on Walmart Marketplace

1. High Competition and Visibility Challenges for Smaller Sellers

It can be hard for sellers to get noticed on Walmart Marketplace, especially if they are new or smaller brands. Walmart's search algorithm takes into account variables like seller performance, offer competitiveness, and the quality of the product content. Well-known brands may have an edge in search results because of their strong performance metrics and optimized listings. 

In order to stay competitive, new sellers should concentrate on optimizing product listings with superior customer service, competitive pricing, and high-quality content. The Repricer is one of Walmart's tools that can be used to automatically maintain competitive pricing. 

2. Lower Profit Margins Due to Pricing Pressure

The Walmart Marketplace is known for being among the most economical online presence. This explains its colossal worldwide customer base. When a company sells its product at the lowest price, the likelihood of bigger margins is diminished. As a result, it takes several sales cycles for a seller to make a discernible profit. 

Walmart Marketplace gives sellers the freedom to determine their own prices. However, Walmart upholds its "Everyday Low Price" slogan by enforcing stringent pricing policies. If a product is found at a lower price on another website, Walmart may unpublish the listing to ensure price competitiveness; this is known as the 'Pricing Rule'.

3. Approval Process and Strict Standards

Often, it is not about whether you should sell on Walmart.com but whether you can. Sellers require approval before they can put their merchandise on the Marketplace since Walmart's main priority is to maintain its reputation as a reliable and cost-effective retailer. Additionally, sellers are expected to adhere to strict product limitations. Products found on Walmart's prohibited list will be removed from the Marketplace.  

The process of applying for approval is 10 to 15 minutes long. You also will need a few formal documents, such as your tax ID, W-9, and product GTINs. All Walmart Marketplace sellers must be registered in the US and have US addresses for their warehouses. Sellers who are based outside of the US must have a DUNS number and provide their international headquarters address.

Your brand and performance will also undergo evaluation. If you already sell online on other sites, Walmart will look at your product's performance and reviews.

How to Sign Up for Walmart Marketplace

Here's how to get started if you determine that Walmart Marketplace fits with your company's objectives:

1. Ensure you meet the eligibility requirements:

• Prepare your business license number or U.S. business tax ID (SSN is not accepted). Foreign Entity Tax IDs are required for international sellers.

• Prepare supporting documentation that attests to your company's name and address, such as a W-9 or W-8 form and a Department of Treasury EIN Verification Letter.

• Make sure your products adhere to Walmart's Prohibited Products Policy and have GTIN/UPC GS1 Company Prefix Numbers.

• Be ready to process orders via Walmart Fulfillment Services or another B2C warehouse in the United States that accepts returns.

2. Complete the application process:

Visit the Walmart Marketplace Application page to begin your application. The process involves providing detailed information about your business, including contact details, tax information, and product categories.

Source: marketplace.walmart.com > Join Marketplace

Following submission, Walmart will examine your application to determine whether your company is a good fit for the Marketplace. This assessment considers elements like your product quality, customer service skills, and e-commerce experience. A solid track record on other platforms can help your application because Walmart wants to ensure only trustworthy, well-established sellers join the Marketplace.

Protect Your Business at Walmart 

Deductions and compliance fines are commonplace when selling to any retailer. SupplyPike helps Walmart suppliers get paid and get better. Our software tests the validity of deductions, collects proof documentation, and takes disputing a claim down to a few (or zero) clicks.

Our software also helps suppliers avoid fines by digging into root cause analysis and providing executive-level oversight of the supply chain. Schedule a meeting with a team member to find out if SupplyPike is right for your retail business.

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