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 largest US 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.”)
Walmart may have once held a dominant hold in the world of retail. Yet Amazon changed that in 2021.
But it's important to remember that 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.
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 staggering growth of some 90 percent between 2020 and 2022. And with the recent announcement of their Walmart+ service as an alternative to Amazon Prime, some businesses are left wondering if the retail titan may be altogether greener pastures to sell through.
Our advice? Don't necessarily jump your guns quite so soon. There's more to consider about a third party sale through Walmart online than simply diversifying your future sales channels
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. 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.
Pro: Less Competition, More Options
There are reportedly some 6 million active sellers currently using Amazon as their primary eCommerce platform. Walmart may be the leading brick and mortar retailer with over 265 million customers each week, but less than 150,000 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. That 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 Walmart.
It's not only the ease of customer transactions which makes Walmart Marketplace stand out. It's their digital commerce solutions as a whole. Walmart's recent decision to sell their eCommerce technology through a strategic partnership with Adobe promises best in class solutions for small businesses, including cloud-based hosting and AI-driven solutions for predictive suggestions.
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's online presence 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:
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.
We're not suggesting that Walmart can replace Amazon anytime soon. There's well over 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 of Amazon FBA 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.
Your Bottom Line as a Third Party Seller
Your bottom line as a merchant isn't simply to increase sales. It's increasing your visibility. But is expanding to Walmart worth the risk?
That's entirely contingent on the returns you're seeing. All parties involved need to weigh the pros and cons of conducting business. And Walmart's vetting process is a little more complicated than Amazon's. Amazon may have significantly more robust advertising solutions than Walmart. Yet Walmart is still an underdog in eCommerce.
And it's never wise to overlook an underdog.
Expanding your online business to Walmart requires as much guidance as it does adaptation. That's where we come in. Find out more at Color More Lines