The Pros And Cons Of Selling On Walmart Marketplace

Amazon’s not the only fish in the sea of eCommerce. They’re simply the most successful one.

Any online merchant runs into a recurring issue: maximizing visibility. And while Amazon’s unquestionably the most effective platform for product exposure, there’s also a good chance you’re wondering if you’re getting the most out of your digital sales. Enter Amazon’s fourth largest competitor online: Walmart.

Walmart has a few things Amazon simply can’t compete with. For one, they had already successfully burrowed their way into the consumer psyche long before Jeff Bezos was even a gleam in his parents’ eyes. Most everyone can identify the slogan “Low Prices Everyday” as being inexorably lined with Walmart. But Amazon’s slogan? No one’s really quite sure (in case you need to be reminded, it’s “Work Hard. Have Fun. Make History.”)

With a reported sales revenue of over $123 billion for 2019, It’s clear that Walmart’s hold on physical retail is as unrelenting as Amazon’s hold on the digital marketplace. But physical retail and online retail are two entirely different beasts. Both are defined by two completely different attitudes towards shopping; attitudes defined by both innate consumer values as well as logistics. And while Walmart knows it has its work cut out for them, they certainly haven’t been slouching when it comes to eCommerce. The company recently reported a growth of some 37 percent in online sales for 2019. And with the recent announcement of their Walmart+ service as an alternative to Amazon Prime currently in test phase, some merchants are left wondering if the retail titan may be altogether greener pastures.

Our advice? Don’t jump your guns quite so soon.

Pro: No Monthly Fees

Yes, Amazon FBA does offer a basic individual program for sellers based on sales per unit. But if you want to maximize your visibility and traffic, their monthly Professional plan is probably the most effective vendor option—at a cost starting at $39.99 a month. And that doesn’t even include shipping options. Walmart Marketplace doesn’t offer a monthly fee. Instead, you’re charged on a percentage-based “referral fee” for contract categories, helping you measure accurately just how effective selling on Walmart can be for your business.

Con: Inconsistent Referral Fees

How inconsistent? Sometimes by as much as 20 percent of your product listing. And while listing on any eCommerce platform may mean minimizing your ultimate profit margin, it’s just a little different with Walmart Marketplace. It’s not an across-board percentage. There’s anywhere from 6 to 20 percent commission you’re being charged; which can make you think twice about your ultimate sales goal if you plan on using Walmart exclusively.

There are reportedly some 2.8 million active sellers currently using Amazon as their primary eCommerce platform. EBay, one of Amazon’s chief competitors, has an estimated 25 million sellers available for a reported 182 million customers to choose from. Walmart may be the leading brick and mortar retailer with over 265 million customers each week, but less than 37,000 vendors currently use WalMart Marketplace services. And with an unlimited number of monthly SKUs, that relative scarcity can help give your product line a leading advantage if you find visibility to be an uphill battle with competitors.

Con: Competitive Listing Discrepancies

Despite the lack of competition, there’s one particular problem facing Walmart Marketplace: listing discrepancies. Product listings are sometimes prioritized on a “first-come, first-served” basis. Which means that if you’re offering a product at the same price as a competitor’s, Walmart will automatically list the vendor who applied first. And it’s not just about who came first. It’s about price. Walmart’s chief priority has always been providing customers with the lowest price point available; which means lowering your own listing if you hope to have any chance of competing successfully. 

Pro:  Seamless Transactions

An estimated 46 percent of online customers abandon their shopping carts directly at checkout. And it’s not always because they’ve simply changed their minds. In fact, it’s frequently because their preferred payment option isn’t always accepted. And this is where Walmart Marketplace excels. They don’t just process major credit cards and gift certificates, but alternative payment methods including AmEx Pay, Chase Pay, PayPal and Visa Cash; all with the same reliability and low cost shipping options your customers have come to expect from Wamart.

Con: Slower Times Between Application And Selling

One of the most consistent hurdles we hear about from first time vendors with Walmart Marketplace has been the length of time between applying as a seller and going live. And to be fair, this can be an issue with multiple eCommerce channels. But Walmart has a reputation to uphold. Which means they need to validate you as a seller first through relatively intricate documentation that can sometimes take well over a month to process—assuming your application is even approved.

Pro: Wide Exposure

Walmart has been estimated to receive over 135 million unique visits each month. That might seem minor compared to the estimated 213 million visits reported by Amazon. But here’s a few things you may not know about Walmart Marketplace:

  • Walmart Marketplace saw a 37 percent growth in eCommerce sales for the first quarter of 2019, in comparison to Amazon’s 10 percent.

  • Walmart actually topped Amazon as the most widely downloaded app on Black Friday in 2019.

  • An estimated 26 percent of all U.S. shoppers indicated they plan on using Walmart as their primary retailer for holiday shopping in 2019.

We’re not suggesting that Walmart can replace Amazon anytime soon. There’s well over an estimated 100 million Amazon Prime customers alone—and that’s only 62 percent of their monthly customers. But we are suggesting that maximizing your exposure across multiple channels can help boost both brand visibility as well as your sales.

Con: Multi-Channel Restrictions

One of the key benefits we’ve been hearing from sellers about Amazon FBA lately is multi-channel fulfillment services. And while it’s not always the most cost effective solution, it’s one of the more convenient and simplified options available for many high volume sellers. Walmart, on the other hand, doesn’t offer multi-channel fulfillment—at least not yet. In fact, they expressly forbid order fulfillment through Amazon’s MCF solution; so if you’re hoping to leverage Walmart Marketplace as a convenient cross-channel platform, you may find you’ll need to spend more time managing your orders manually than you might with their competitors.

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