You’ve created your brand, carved out a unique niche within your industry, developed a sales strategy within your current channels, and are ready for your next stage of growth. You want more eyeballs on your product. Naturally, with over 4,600 stores in the US, you’ve considered Walmart with either wary caution or eager anticipation but have yet to secure a meeting or a “yes” from a Walmart Merchant.
Instead of simply waiting for the golden ticket of distribution in Walmart stores, you want to do something now. An immediately available option for you is setting up a Walmart marketplace seller account. As a 3rd party seller on Walmart’s ecommerce platform, you are taking a meaningful first step towards securing your place within Walmart’s ecosystem.
Let's explore the advantages and potential pitfalls of becoming a Walmart marketplace seller with the goal of empowering you to build a strategy to thrive at retail.
Access to New Customers:
Joining Walmart's marketplace instantly exposes your products to their extensive online customer base, reaching millions of daily shoppers. This broader market reach leads to increased sales and brand visibility, attracting customers who may not have encountered your products otherwise.
Lower Barriers to Entry:
Starting as a marketplace seller simplifies the entry process into Walmart’s systems, allowing you to establish a presence on Walmart's platform quickly. With fewer barriers, you can focus on your product quality, innovation roadmap, marketing, and delighting your customers through high quality customer service interactions.
Multiple Fulfillment Options:
Walmart's marketplace offers flexible fulfillment options, including leveraging their large logistics infrastructure. If you have existing cost-effective methods of shipping to your customers, you can choose to fulfill orders yourself. Alternatively, you can utilize Walmart's fulfillment centers which can be a significant benefit to you with faster shipping, reduced costs, and improved customer satisfaction.
Deep Customer Data and Analytics:
Becoming a marketplace seller grants access to valuable data and analytics. Walmart provides insights into customer behavior, purchase patterns, and market trends, empowering you to make data-driven decisions, optimize offerings, and tailor marketing strategies.
Amplified Brand Exposure:
Partnering with Walmart as a marketplace seller increases your brand exposure. Walmart's trusted reputation with customers extends to marketplace products, which can boost your brand’s credibility and customer confidence. Any takers on boosting brand recognition?
Robust Scalability:
Walmart's marketplace enables seamless scalability as your business grows. You can expand product assortment, control inventory levels, and target new customer segments. Leveraging Walmart's customer base, data platforms, and logistics infrastructure supports efficient and effective business expansion.
Intensified Competition:
The Walmart marketplace is highly competitive, with numerous sellers vying for customer attention and the coveted buy box. Even if you’re brilliant at the basics of ecommerce, it can be challenging to stand out.
Pricing Pressure:
Walmart's marketplace, like most e-tailers, emphasizes competitive pricing. This may lead to price pressures to continue winning the buy box so you can drive unit movement. If this is a temporary investment in price, it can be an effective customer acquisition strategy, but in the long term, you must model this risk to account for potential lower profit margins.
Marketplace Fees:
Walmart charges various fees for using their marketplace, including referral fees, subscription fees, and fulfillment fees, impacting overall profitability. Referral fees range from 8% up to 20% based on the category of products. Walmart Fulfillment Services fees range dramatically based on product dimensions and weight. You can estimate your WFS fees here: https://marketplace.walmart.com/walmart-fulfillment-services-pricing/
Constraints on Site Experience:
As a marketplace seller, you are limited in what you can control when it comes to customer experience on site. Walmart handles the website layout, customer service, and fulfillment.
Compliance Requirements:
Walmart has strict compliance and performance standards for marketplace sellers, requiring adherence to specific policies and quality standards. If you are in a highly regulated category (ie: OTC, Chemicals, Food, Pharmacy) it can be helpful to consult with an experienced agency, broker, or trusted community of peers who have proven success navigating these requirements within these categories.
Dependency on Walmart's Policies and Changes:
As a Walmart marketplace seller, you are subject to the platform's policies, terms, and any changes implemented by Walmart, which may impact your operations and strategies.
Setting up a marketplace seller account on Walmart.com is a pivotal step toward securing distribution and growth within their stores. While there are numerous advantages, it is essential to consider the potential disadvantages and pitfalls associated with this partnership. We have witnessed several examples of successful Walmart marketplace vendors gaining distribution in stores and it is a thing of beauty when it happens.
If you want help optimizing your current marketplace offerings, or need guidance as a new seller, our team at High Impact has a hive of experts who can partner with you to help you thrive at retail.
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