Amazon might be the most well-known marketplace for eCommerce store owners and dropshippers, and selling on this platform can certainly boost your sales, but there’s still a lot of competition on Amazon.
Plus, the quality of the platform and the expenses don’t always make it worth your while.
Fortunately, Amazon isn’t the only online shopping platform in the game.
Today, more and more dropshippers are turning toward Walmart Marketplace.
In fact, there were well over 150,000 Marketplace sellers in 2022—a 66% increase over 2021.
From 2017 to 2020, Marketplace’s gross merchandise volume increased 3X, which means the platform is now selling a lot of products to a huge customer base.
Learning how to sell on Walmart Marketplace is a great way to expand your reach as an eCommerce brand.
But because Walmart maintains such stringent seller requirements, this option is better for established eCommerce sellers and dropshippers.
If you aren’t sure whether Walmart is a good addition to your business, we’re here to help. In this guide, we’ll explain what Walmart Marketplace is and the pros and cons of selling on this platform.
What Is Walmart Marketplace?
Walmart Marketplace offers third-party sellers the opportunity to list products for sale on Walmart.com.
This is similar to how Amazon works: shoppers browse Walmart.com, find products they love, and buy your awesome products
Walmart does note that third-party seller items are Marketplace items, but most of its customer base doesn't realize these products aren’t actually sold by Walmart.
Your listings will display alongside other Walmart Marketplace listings in the search results, so you’re still competing with other sellers—and Walmart—to sell high-quality products at great prices.
What to Expect as a Walmart Marketplace Seller
Walmart Marketplace charges you a referral fee to sell on the platform, but you get access to thousands of loyal customers and selling tools to boost your revenue.
In exchange, Walmart charges category-based referral fees based on primary product categories.
These fees range from 3% to 20% per transaction, although some have dollar amount minimums and maximums.
For example, goods in the apparel and accessories product category have a 15% fee, while jewelry has a 20% fee.
You pay Walmart fees every time you sell a product. But the good news is that this is the only fee Walmart charges you unless you’re also paying for Walmart fulfillment.
Unlike Amazon, you pay a flat percentage fee without additional "gotcha" fees or add-ons.
Walmart usually processes payments on a weekly basis.
It takes your gross online sales, subtracts the referral fee, and transfers the remainder to your bank account.
Keep in mind that payments process when you ship the product, not when the customer places an order. It might take an additional week to see payment if it takes a while to ship the product.
Walmart Marketplace: Pros and Cons for Dropshippers
Walmart Marketplace isn’t the go-to for many eCommerce sales, but it’s growing in popularity.
We can’t say for certain whether selling on Marketplace will work for your brand—there are both benefits and challenges to selling on this platform.
Let’s look at the major pros and cons of becoming a Walmart Marketplace seller.
Pros
Simple Fee Structure
Amazon charges monthly fees, but Walmart only charges referral fees when you make a sale. Some of its fees might seem a little high, but as an online seller, you might find enjoy the absence of these add-on fees.
If you use Walmart Fulfillment Services (WFS), though, that will complicate your fee structure.
Fulfillment cuts into your profits, so you have to be very strategic about how you price everything to recoup the costs of both the referral fee and fulfillment fee.
Greater Independence
Other online marketplaces come with a lot of rules on how to run your business on the platform.
Walmart has rules, but it offers a greater degree of flexibility than other platforms.
For starters, you can list any product you want on Walmart as long as it isn’t a prohibited item.
There are no inventory minimums or maximums, either, so you’re free to list all of your SKUs.
In terms of pricing, you’re free to set the retail price as long as it’s in line with Walmart policies—and MAP—if you’re required to follow pricing rules from your manufacturer.
While you’re required to have a return policy, Walmart gives you complete control over that policy.
That’s right: you don’t have to follow Walmart’s return policies. Obviously, this needs to conform to Walmart's terms of service, but you have much more freedom with managing returns.
Walmart Fulfillment Services (WFS)
Walmart launched fulfillment services in 2020, which operate very similarly to Fulfilled by Amazon (FBA).
You don’t have to worry about storing or shipping products to the customers; when you pay for WFS, Walmart handles it for you.
Fulfillment comes with a lot of fees, but it does eliminate a lot of the hands-on work required for eCommerce.
You ship your inventory to Walmart fulfillment centers, where staff handles storage, picking, packing, and shipping for all orders.
WFS comes with several perks like:
- Two-day shipping for customers in the contiguous U.S. (outside of peak season)
- Increased likelihood of earning the Buy Box
- Additional seller support
- Analytics and APIs
The downside is that Walmart doesn’t offer this for free. There are fees for fulfillment, storage, return shipping, disposal, and more. See here for the full list of fees.
Audience Expansion
Sure, there are more shoppers on Amazon. But even then, there are people who exclusively shop on Walmart.com.
As a Walmart seller, you’re borrowing Walmart’s clout and reputation to make more sales.
The thing is, you can’t sell on Walmart unless you’re an established eCommerce seller.
This gives experienced store owners and dropshippers a new avenue for business growth.
By expanding to a new platform, you access a totally new demographic of shoppers, which is great for your bottom line.
Less Competition
There are more sellers joining Walmart Marketplace every year, but even then, there’s way less competition on Walmart.com than on other platforms.
It’s harder to get approved as a Walmart seller, so the platform isn’t inundated with sellers the way Amazon is.
| Ready to start selling on Walmart Marketplace? Have a look at our guides How to Build a Walmart Dropshipping Business and Successfully Selling on Walmart Marketplace! |
Cons
Long, Complex Online Application Process
The approval process is, hands down, the biggest challenge for new Walmart Marketplace sellers.
Walmart is very choosy about who sells on its platform, so you have to prove yourself before you get access to your own Walmart seller account.
Approved sellers have to provide quite a lot of information to secure a Walmart retailer agreement, including:
- Business address or corporate address
- Business tax ID
- Verified UPC information and a product catalog
It isn’t unusual for the registration process to take a month—and even then, you might not get the answer you were hoping for.
If you do manage to get approval on your first go, you need to maintain certain quality metrics to continue selling on Walmart Marketplace.
So not only do you have to work hard to start selling, but you have to continually prove yourself to continue selling.
This is why it’s so important to have eCommerce experience before you go to Walmart Marketplace.
Walmart looks at your customer satisfaction scores, shipping timelines, and defect rates. It demands a high standard of performance, so if you have trouble keeping up, try selling on a different platform first.
It does offer useful features like a listing quality dashboard, though, so you'll have a lot of support to help you succeed.
Comparatively Small Audience
Walmart.com does get a decent amount of traffic, but it pales in comparison to Amazon and eBay.
Amazon accounted for 44.9% of eCommerce sales in the US in Q2 of 2022. Walmart made up 5.4% in the same period.
In the last month, Walmart.com had over 394 million visits. That’s a respectable amount of traffic, but Amazon had 2.3 billion visits, and eBay had 694.7 million.
Expanding to Walmart Marketplace can definitely increase your product sales, but keep in mind that traffic and sales could be lower than on other online marketplaces.
Competitive Pricing Requirements
Walmart is an affordable retailer, so it cares a lot about low prices. You need to follow two strict pricing rules to stay on its good side and offer the lowest prices possible.
The Price Parity Rule prevents you from listing the same product at a lower cost on other marketplaces that you sell on—including your own website.
The Price Leadership Rule closes a loophole in the Price Parity Rule. It prevents professional sellers from listing items if the same item is cheaper on another platform—regardless of whether you’re the seller or not.
These rules mean you have to carefully monitor not only your prices but other sellers’ prices, too. This is tricky with millions of product listings on the web, but pricing automation solutions like Spark Shipping can help.
Start Selling On Walmart Marketplace in Style
As a Walmart Marketplace seller, you have the opportunity to increase your revenue by selling on multiple online marketplaces.
Walmart Marketplace might not be the number-one eCommerce platform, but it’s growing in popularity with both online shoppers and marketplace sellers.
You need the right tools in your corner to manage the complexities of listing on Walmart and all other eCommerce platforms you sell through.
Spark Shipping automates back-end eCommerce tasks like inventory management, pricing, order fulfillment, and tracking to simplify your eCommerce business.
See our innovative solutions firsthand: Request a Spark Shipping demo now to simplify your Walmart Marketplace setup.