How to navigate the digital waters of the Walmart marketplace.
The ubiquitous retailer has begun quietly carving out its share of eCommerce territory by offering Walmart Fulfillment Services (WFS) — its version of Fulfillment by Amazon (FBA).
In a recent survey, nearly half of Amazon sellers believed Walmart’s online marketplace would likely become a stiff competitor against Amazon in 2022, and more than a third of those sellers are considering launching a Walmart dropshipping or Walmart automation business this year.
For those potential newcomers, it will be comforting to know that the Walmart model works very similar to how Fulfillment by Amazon (FBA) runs its operation. Basically, the WFS system permits store owners to ship their products to Walmart’s fulfillment centers, at which point Walmart will then store, pick, package, and ship to their customers, as well as handle the customer service after the purchase.
To maximize the advantages of the WFS fulfillment program, certain sellers can capitalize on Walmart’s logistics experience and highly advanced supply chain network to scale their stores. In short, Walmart will help some select sellers who qualify to grow their Walmart automation businesses as an incentive to join its platform.
That way, Walmart gets to broaden its already vast array of unique product offerings, while also giving brands a new avenue to increase their reach and attract millions of potential customers who might prefer Walmart over Amazon.
As more Walmart dropshipping sellers and Walmart automation businesses flock to the WFS marketplace (currently more than 120 million unique customers a month), it’s a strong signal that store owners are now migrating to this increasingly attractive shopping option to Amazon.
There’s even a blue light special on aisle six!…
From now until the end of June, Wamart.com is offering a deal to new sellers who set up shop: free storage and 10% fulfillment fees during the first 90 days of business. Of course, there are some conditions. You have to be a new seller with at least one item received by a Walmart fulfillment center by 6/30. And the storage giveaway applies only to the first 10K of items. Regardless, it’s a pretty appealing deal.
So, you might be asking yourself what makes WFS unique?
1. Sellers need to apply and be approved to sell on Walmart.com, whether you use WFS or not. This additional barrier to entry equates to less competition from other sellers in the marketplace.
In contrast, anyone can register to sell on Amazon — thereby opening the doors to everyone. To give you an idea of the trickle compared to the flood… There are currently around 135,000 Walmart dropshipping and Walmart automation businesses versus the more than 2 million operating on Amazon’s platform.
2. Walmart has a streamlined compensation structure that includes simply a fixed monthly storage fee and a fulfillment price. The storage and fulfillment fees are based on the shipping weight of your product alone.
Conversely, Amazon storage fees depend on how much inventory you have stored in their warehouses. Its fulfillment fees depend not only on the weight of the products but also on their dimensions. Big difference, if, say, you’re selling something lightweight, but large.
3. Walmart doesn’t levy a monthly subscription fee for sellers.
Amazon charges $39.99 per month for each selling account, while if you are starting a Walmart eCommerce business, there is no monthly subscription to pay.
Forty bucks a month isn’t much, but it’s still a clear difference between the two models.
4. By having fewer sellers on Walmart, it translates to more product views per seller.
Based on Walmart’s figures, each of their stores receive about 27K visitors per month. To put that into perspective Amazon’s sellers receive a meager 2,100 visits monthly.
That means the Walmart platform is less saturated, garnering their sellers 13x more store visitors per/month compared to those strictly selling on Amazon. That alone is probably the most persuasive reason for starting an online business on Walmart.
5. Customized account management.
Walmart assigns its qualified sellers a WFS fulfillment specialist who provides personalized recommendations for their particular store in order to optimize and spark growth. It doesn’t cost a dime.
While, if you want the personalized account strategy from one of Amazon’s dedicated account managers, it’ll cost you $1,600 a month, plus a percentage of your store sales. Another big differentiation move by Walmart is to shore up market share from Amazon.
What’s the net-net with Walmart then?
The retail behemoth is making substantive and advantageous decisions to create opportunities for its sellers that are starkly different than Amazon, while also offering the same level of fulfillment expertise and customer service.
What should you do? Get in early, and get in fast.