- Seller Labs
- On October 31, 2016
We all know Amazon is the most visited shopping website in the US. But how many of us know that Walmart is ranked number two? Boasting more than 88 million unique visitors a month and 11 million unique items, maybe it’s time to start thinking about selling on the Walmart Marketplace.
How the Walmart Marketplace Differs from Amazon
Steep Barrier to Entry
The most obvious difference between the two platforms is Walmart’s barrier to entry. Sellers have to be invited to sell on the Walmart’s Marketplace, which can take anywhere from two to four weeks. This may be a complete letdown to many sellers but it’s actually a good thing. Why? Because Walmart wants sellers who have an excellent reputation on Amazon and eBay. Sellers should have an order defect rate below 1%, and have impeccable seller feedback. But once sellers have been approved, getting started is fairly straight forward.
As a result of the steep barrier to entry, there is less competition on the Walmart Marketplace, which means sellers who get in will have a great chance of standing out. It’s estimated that Walmart has approximately 1,000 third-party sellers—with hundreds of new sellers added monthly. This is a drop in the bucket compared to Amazon’s two million third-party sellers. But fewer sellers means a greater chance at winning the Buy Box. The Walmart Buy Box is based on whoever is selling their product at the lowest price; whereas Amazon’s Buy Box takes into account a seller’s performance, price, sales, fulfillment, order defect rate and a whole slew of factors. Will the Walmart Buy Box become more sophisticated, who knows? But Walmart wants shoppers to get the absolute lowest price anywhere.
Smaller Product Selection
The Walmart Marketplace currently offers 10 million SKUs but it’s adding a million more each month. Compare that to Amazon’s bulging 260 million SKUs and it’s not hard to see why Amazon is called “The Everything Store.” But sellers and shoppers shouldn’t write off Walmart because of its current product offering. This just means Walmart has ample space to grow. And Walmart is one of the most recognizable brands in the world. Don’t forget, Walmart recently acquired e-commerce start-up Jet.com for $3 billion in cash. So there remains still much to be seen about what Walmart does with its e-commerce platforms moving forward. I think it’s safe to assume there will be more than 100 million SKUs available soon.
Fulfillment by Walmart
Similar to Fulfillment by Amazon, Walmart is adopting a similar process to pick, pack and ship products to customers. The main difference between FBA and FBW is Walmart has multiple ways to fulfill orders. Walmart uses its “fulfillment centers, store distribution centers, 4,500 stores and the company’s world-class transportation fleet to ship online orders.” Whereas Amazon fulfills orders from its Fulfillment Centers, the Merchant Fulfillment Network (MFN), and Seller-Fulfilled Prime. Walmart is using its diverse infrastructure to meet the demands of its shoppers. It may not be as optimized as Amazon’s but I wouldn’t discredit Walmart’s ability to delight customers.
But after browsing around Walmart.com and looking at the shipping options, it’s easy to see that two-day shipping will cost shoppers. The Rush shipping option, which takes two days, costs $10.97 for an iPad Air 2—that’s more than 10% of what a Prime membership would cost for a year. So if a shopper isn’t happy with the free snail mail option, they’re going to pay. Walmart does offer its free Store Pickup option but it’s currently not available to Marketplace sellers.
Is the Walmart Marketplace Worth Your Time?
Yes. Especially if you can prove you’re an excellent seller. Walmart has expressed its meticulous requirements for potential third-party sellers. The investment Walmart has made into its e-commerce platform should make seller everywhere perk up and pay attention to this already-established retail behemoth. In the ever-changing landscape of e-commerce, sellers must diversify and adapt in order to succeed. And Walmart presents a golden opportunity for those who are qualified. You can submit your application to sell here.
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