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Many sellers who already sell on eBay and Amazon are looking to expand their eCommerce business and rightfully so. There are a number of marketplaces you can actually make money on today, which sellers are unaware of, let’s cross Walmart off that list together! Selling on Amazon for many presents an opportunity ripe for the taking, especially if you already have an established customer base on other marketplaces.
Why not tap into a new revenue stream ?
I’m guessing though that I do not have to convince you since whoever is reading this article understands the value of expanding their eCom business to the ‘blue side’ (see Walmart’s logo). It is actually my pleasure to introduce you to a new marketplace, I consider it my passion, just the other week I introduced Etsy with a beginner’s guide and this week I will be:
Let’s talk a bit about the Walmart miracle! We all know Walmart stores – they are like the modern American church.
They are literally everywhere. But in recent years, Walmart has been able to recreate that success online. According to Similar Web, Walmart currently has upwards of 330 million unique monthly visitors:
That is a nice customer base which you can definitely start tapping into today.
Additionally, according to Statista, Walmart saw a 63% growth in eCommerce sales in Q1 of 2018 and ‘only’ a 43% growth in eCommerce sales in Q1 of 2019 but don’t let this dip fool you – 43% growth by any standards is insanely good!
When you compare Amazon, eBay and Walmart as in terms of total eCommerce sales in 2019:
Source: Marketing Charts
And I have to say that there is something to be said for not competing on America’s biggest or even second-biggest online marketplace. It is very similar to one of my colleague’s experiences as a writer, in the US he was one among many but when he moved abroad as an English speaking writer, the ‘scarcity’ aspect kicked in and demand was much higher for his particular skill set. That same logic and set of ‘rules’ can be applied in the Walmart marketplace, you are a smaller fish in a smaller pond which means that you have a greater chance of ‘eating’ or capturing a nice piece of market share.
We already saw above how Walmart is a spec of dust in Amazon’s rearview mirror – Amazon has nearly 50% of the American eCommerce market in its clutches whereas Walmart has close to 5% Of market share, making it one-tenth the size. Beyond numbers – let’s compare the selling experience on both marketplaces:
The good news is that you will only be competing with high quality, trustworthy sellers, the downside is that you have to pass Walmart’s strict screening process. Walmart is looking for sellers who:
You will also be asked to provide some personal information about your business such as:
Shipping: Walmart has decided to challenge Amazon head-on as far as shipping goes. Walmart decided to make a bold move by introducing free 2-day shipping to all buyers who spend upwards of $35 on their marketplace. And the real kicker is that you don’t need to pay for or sign up for a membership.
Amazon, on the other hand, offers Amazon Prime as its premier shipping service. Prime gives buyers access to Kindle books, video streaming as well as ‘free’ 2-day, one-day and same-day shipping options but comes at a subscription fee of – $119 annually or $12.99 per month.
For those of you wondering what the main differences between Walmart’s marketplace and eBay, here is some food for thought:
In this section, I will walk you through the advantages and disadvantages of selling on Walmart. As you will soon see, selling on Walmart is geared towards:
Selling on Walmart has some serious advantages when compared with other marketplaces. Here are the top reasons why I would recommend you start selling on today:
Source: VerdeGroup
4. Sales volume is higher – Since one of Walmart’s prerequisites for becoming a seller on their marketplace is offering ‘competitive pricing’, many sellers have noticed that their per-item margins are lower than on other marketplaces which on the surface sounds like it is a disadvantage. And it can be to some extent, but the positive side of this equation relates to the fact that sales volumes are significantly higher on the Walmart marketplace meaning you will sell more product at a lower profit per item but when approached correctly you can still end up on top in terms of revenue stream.
5. Improved seller support – To put it nicely, Amazon seller support is awful. Many a seller has been extremely frustrated trying to get their hands on an Amazon rep to solve their issues in real-time. In contrast, Walmart has actually made serious improvements to its seller support by opening up a seller hotline as well as a menu that is interactive and can help sellers solve problems in real-time.
Nothing is ever all sunshine, and Walmart is no exception. Here are some of the less pleasant aspects of selling with the Walmart marketplace:
3. Low revenue margins – I mentioned this earlier and it can be both an advantage or disadvantage depending on where you are coming from. If your business model is built on high sales volume and small margins then you are in luck. But what if you rely on a model that is based on low sales volume and high margins? Or what if you can’t reach the volume necessary for your Walmart store to be profitable? These automatically render Walmart as a non-viable option for you and your business and can be one of the biggest discouraging factors for a given business.
4. Bad seller support – Customer support isn’t as good as it is supposedly cracked up to be. I know above I said that seller support is better than Amazon but there are always two sides to the same coin and some sellers would beg to differ with me. Check out this Reddit review of Walmart seller support:
5. Strict pricing prerequisites – Walmart.com allows sellers to choose their own pricing schemes but as you remember ‘competitive pricing’ is one of the prerequisites for new Walmart seller acceptance which is what leads to low-profit margins. This means that Walmart feels that they have a vested interest in keeping product prices low in the interest of keeping consumers coming back for their next shopping fix. Some sellers have found their products delisted for price competition, which is disconcerting to say the least.
Walmart marketplace fees are surprisingly very simple and straightforward. The only fee sellers need to pay are called ‘Referral Fees’ which is a percentage of the item’s sale price based on said item’s category – percentages range from 6% for ‘Personal Computers’ to 15% for categories like ‘Watches’, ‘tools & Home Improvement’, and ‘Sporting Goods’. Here is the full list of Referral Fees as listed on Walmart’s website:
Here are the most important things you should know about getting paid on Walmart’s marketplace:
All these factors are important, especially when trying to properly plan your Walmart store’s cash flow on a weekly, monthly or even yearly basis.
If after reading this post, you have decided that Walmart is the way to go in terms of expanding your business then I would like to give you 5 tips to help get you started on the right foot:
These advertising methods will help get your listings in front of high intent buyers who are actively surfing the Walmart marketplace to either make a purchase now or later. When you do decide to run an advertising campaign be sure to:
2. Ensure customers leave reviews – Social proof is paramount in the world of eCommerce. 90% of buyers admit to making a purchase decision based on the recommendation of a friend, acquaintance or even a total stranger who has left a review.
Source: Marketing Land
As I mentioned earlier, Walmart has strict criteria when accepting new third-party sellers so if you have been accepted due to your excellence, do your utmost to maintain this high level of service, this includes but is not limited to :
Additionally, be sure to follow up with buyers and make sure they are happy with the item and that they know how to set it up. If you become aware of a problem and resolve it before the client even has the time to leave you a review then you are taking a pre-emptive approach to your Walmart store and will be putting yourself on track to having 100% positive feedback which is key to generating current and future business.
3. Qualify for the ‘Buy Box’ –
As I mentioned earlier, multiple sellers can sell the same item and much like with Amazon, all sellers are part and parcel of a mutual product listing for a specific product UPC. If a buyer decides to purchase a certain product they click on the ‘add to cart’ button and that buyer will automatically but the product from whomever has won the buybox at that given time. Walmart also shows the other sellers associated with a specific product and this gives the shopper the ability to make their own informed decision based on price, ratings etc. This list looks as follows:
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Here are three ways to capture as many sales as possible and potentially win the buy box:
4. Be on top of pricing – Yes, shoppers want quality but if 3 sellers are selling the same item and one is offering it at a significantly cheaper price – why would a savvy modern shopper buy from you and not the cheaper listing? They won’t! In this example 3 sellers are selling the same lamp, one seller has it listed at $11.99 and the other 2 have it listed at $17.40 – answer honestly who you would buy from if you were in the buyer’s shoes. By being on top of your direct competitor’s pricing you can generate more sales on your Walmart store.
5. Offer a variety of shipping options – As I am sure you know and as I mentioned above, shipping is a huge deal in eCommerce. All the major players are trying to undercut each other in this respect – Amazon with Prime, eBay with its new Managed Delivery service and Walmart with its free 2-day shipping with no membership fees. Marketplaces understand how the ‘instant culture’ has affected consumer expectations and as a Walmart seller you have to appreciate this as well and be able to offer a variety of shipping options to meet every type of buyer’s needs. The two options on Walmart are:
The first thing I would recommend is offering free shipping and including the cost in the price of the product itself so that the customer perception is that they are getting something free. And second of all, consider upgrading repeat customers and or buyers who place large orders to express shipping even if they don’t expressly request this. This is sure to leave a positive impression, generate positive feedback and create a positive ‘butterfly effect’ for your business.
It was my pleasure to introduce everything there is to know about Walmart’s marketplace. It is important to be acquainted with the different options available to you as an eCommerce business owner, especially if you are looking for opportunities for growth. As you have seen, selling on Walmart is not for everybody. For those of you who cannot yet pass Walmart’s stringent prerequisites, instead of being discouraged, take this as a challenge and try to improve your performance on eBay and/or Amazon and try applying again in a few months. There is nothing like hearing ‘no’ from someone to motivate you even more. Fun fact: Jack Ma, the founder of the Chinese marketplace known as Alibaba which is currently worth $463 Billion was rejected from Harvard 10 times and ultimately it was those rejections that helped motivate him to succeed in business! Have you applied to gain seller status on Walmart – I’d love to hear your personal story in the comments below.