What’s going to be the chief priority for you as a third-party seller in 2022: product expansion or market expansion?
The world of eCommerce is an increasingly active one, where even specialist niches are vying for both traffic and customer retention among an endless sea of competition—many of whom launched their businesses with little foresight and great expectations. Many of them will be content with Amazon. And it’s hard to blame them. Over 58 percent of Amazon’s gross merchandise volume comes from its third-party marketplace. But that’s the problem. With over 1.5 million active third-party sellers, Amazon marketplace isn’t just crowded. It can be downright cutthroat.
But Amazon isn’t the only game in town anymore for international third-party sellers. In March, Walmart lifted long-standing restrictions for foreign sellers in what may be an attempt to compete with Amazon; particularly for the Chinese marketplace, who currently make up 48 percent of Amazon’s third-party business. And it’s as much a welcome move for sellers as it is for Walmart. Walmart Marketplace’s 100,000 sellers may be relatively small compared to Amazon, but that number increased by 100 percent for the second consecutive year in 2021. And it’s only going to grow as Walmart continues to expand their advertising accessibility for both new and top sellers.
Competition between Walmart and Amazon can seem fierce. But if you’re an international seller, there are a few things to keep in mind.
Why Walmart Marketplace?
2020 proved to be a pivotal turning point for cross border eCommerce, with global sales increasing by 21 percent between January 1st and June 14th And not surprisingly, the jewel in cross border’s crown has historically been Amazon. Not only are they virtually synonymous with digital commerce, they’ve been one of the few platforms which allowed easy access for international merchants and vendors. But Amazon has its own drawbacks—not the least of which results from limiting any potential audience off Amazon Marketplace. In fact, the potential for growth on Amazon can be fairly limited for first-time sellers, both domestic and international if they’re not careful.
Walmart Marketplace, on the other hand, has a high growth potential for third-party sellers. That’s largely because Walmart takes an active role in vetting potential vendors. One of the reasons why Amazon can be a difficult market to break into is the amount of bad actors which currently plague the platform. While they may frequently suspend sellers for any number of reasons, the sheer volume of Amazon Marketplace can seem daunting. As a result, less reputable sellers frequently turn to black hat tactics much to the aggravation of both customers and vendors.
Walmart Marketplace takes a different approach. They want to ensure sellers not only conform to policies, they want to make certain their product lines are aligned with Walmart’s reputation. Sellers may have to wait a lengthier time before their applications are approved. But they’re also guaranteed both a wider exposure and Walmart’s name; a name which is as synonymous with physical retail as Amazon’s is to digital retail.
Tips for Selling on Walmart Marketplace as an International Seller
Selling as a third-party on Walmart Marketplace is an invite-only process, requiring both domestic and international vendors to apply directly. Overseas sellers are requested to use one of Walmart’s partnered solution providers to help expedite the process.
During your application, you’ll be asked to provide:
A legal business name.
The category you plan on selling in.
The total amount of your available SKUs.
Estimated annual revenue.
Any URLs for your business site or storefront.
Business license and tax classification information (including a completed W-8ECI, W-8BEN-E or W-9 form.)
Your preferred fulfillment process (note that current Walmart policy prohibits the use of Amazon’s logistic services for fulfillment.)
As an international Walmart Marketplace seller, you’re no longer required to have a US business address or Tax ID. However, if you want to take advantage of Walmart Fulfillment Services (WFS), you must be capable of shipping to fulfillment centers within the US. Additionally, WFS prohibits the sale of perishable and regulated items. All units per sale through WFS must weigh no more than 30 pounds.
Unlike Amazon, Walmart Marketplace doesn’t charge subscription fees but relies on a percentage-based referral fee similar to a commission. On one hand, that referral fee helps you gauge accurately whether or not Walmart is a worthwhile investment for your business. But on the other hand, those fees can be notoriously inconsistent—sometimes reaching as high as 20 percent of a product listing. Keep in mind that Walmart favors vendors who provide the greatest price advantage for consumers, sometimes enabling an aggressive pricing strategy which can ultimately eat into your profit margin. Assuming that your application will be approved, it may take over a month for Walmart to verify and process. Not every application will be authorized and not every seller is suited for Walmart. If you’re entirely new to eCommerce, you may want to consider selling through your own storefront or through Amazon first before applying. Walmart can be strict in their vetting process and they tend to approve only the most qualified vendors.
Can selling on Walmart Marketplace drive your visibility? Absolutely. But like eCommerce itself, it’s not for everyone. Sellers used to the nuances of Amazon may find selling on Walmart to be simple by comparison but not necessarily as profitable. At least not initially. But eCommerce changes every day and success is never guaranteed. Each month, almost 5,000 new sellers join Walmart Marketplace. Some may disappear altogether. And some may find success beyond their wildest dreams in new markets with an entirely new audience.
How they manage that success is another question altogether.
Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more at Color More Lines.