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Three Pros and Cons of Selling on Walmart Marketplace

Learn about:

  • What Walmart’s Marketplace has to offer
  • The way Walmart pays its online sellers
  • How Walmart’s Marketplace is different from other online options

Many online sellers wonder whether they should start selling their wares on Walmart Marketplace. The best way to clear this doubt is by getting to know the positives and negatives of selling on Walmart. The factors that determine your success on Walmart Marketplace are your brand, products, and above everything else, your prices.  

These pros and cons will help you decide whether selling on Walmart is a good idea in your case.  

3 Pros of Selling on Walmart

  1. Small Investment

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.

Walmart charges a referral rate of 14% for its categories on average, 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.

  1. Marketplace with the Highest Growth

Walmart is among the fastest-growing retail giants and has consistently been coming up with features that help sellers and brands reach out to Walmart’s sprawling consumer base. 

WalmartQ1 FY20Q1 FY19$ Change% Change
Revenue$123.9$122.7$1.21.0%
Revenue (constant currency)$125.8$122.7$3.12.5%
Operating income$4.9$5.2-$0.2-4.1%
Operating income (constant currency)$5.0$5.2-$0.2-3.0%

(Amounts in billions, except as noted. Dollar and percentage changes may not recalculate due to rounding.)

  • Walmart’s 2019 Q1 performance indicated a 37% rise in online sales 
  • In 2019, Walmart pumped more than $1 billion into digital marketing 
  • Walmart has six eCommerce distribution centers that along with in-store pickup/ship from store services for eCommerce orders 
  • The Walmart app had the highest number of downloads on Black Friday 2019
  • More than 110 million shoppers use Walmart.com every month

Walmart has seen considerable online expansion, especially after acquiring Shoebuy.com, Moosejaw.com, ModCloth.com, and Bonobos. By becoming a seller on Walmart’s Marketplace, you also have the opportunity to sell on these affiliated sites.

Walmart’s Marketplace also taps the Millennial market, which makes up a quarter of the United States population. A UPS study shows that Millennials make around 54% of their purchases online.

  1. Greater Integrity

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 for exuding reliability online.

The Walmart API integrator assists every category of product. 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 its Marketplace sellers weekly. Payoneer was founded in New York City in 2005 and has expanded to 21 global offices with 1,500 worldwide employees.

3 Cons of Selling on Walmart

  1. At Walmart, Brands Stand a Better Chance than Smaller Sellers

As a small seller, you are less likely to get on board with Walmart because for the multinational retail corporation, name brands come before sellers. If you are a lesser-known CPG or supplier, Walmart may pass your product up for a more popular brand name.

Some sellers will also see fierce competition for similar products for the same price. Walmart promotes sellers in order of when the product was uploaded online, not necessarily by relevance. If two sellers are both offering a product with the same UPC code for the same price, Walmart gives preference in searches on a first-come-first-serve basis. The only way to be more competitive if you are a late-comer is to offer the same product for a lower price.

Additionally, private label brands are gaining much more traction than in previous years. A 2016 study showed that 60% of Millennials prefer generic brands to name brands.

  1. Lower Prices Make Higher Profits Less Likely

The Walmart Marketplace is known for being among the most economic online presences. This explains its colossal worldwide customer-base. When a company sells its product at the lowest price, the likelihood of bigger margins is diminished. Therefore, a seller must wait many sales cycles to achieve noticeable profit. 

Also, products will only be sold when you have become known by consumers.

With the Walmart integrator, the administrator can showcase the goods at custom prices; keeping them the same as in the store. This is a restriction that sellers must be aware of.

Walmart also has strict pricing rules to maintain its “Everyday Low Price” motto. Marketplace sellers are required to sell their products at a lower pricing point than anywhere else in the eCommerce market. If Walmart finds your item for a lower price on another website, it will remove your item from its search results and de-list it.

  1. Sellers Require Approval 

Often it is not about whether you should sell at Walmart, but whether you can sell there. 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.

Taking into account the pros and cons of selling your merchandise on the Walmart Marketplace, you can now easily make up your mind and decide your plan of action.

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Updated on August 10, 2020

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