almart recently published their Q2 earnings which showed sales up by 97%, most of which is attributed to more customers shopping online during the pandemic, stocking up on household supplies, and shopping for grocery items online.
What’s more impressive? Walmart’s online marketplace shopping is up by a triple-digit percentage AND recently announced their brick-and-mortar stores are being redesigned to help customers better navigate the omni-shopping experience. Look out Amazon...Walmart’s coming for you.
But as a seller, you might still be evaluating the ROI of launching to Walmart as an additional marketplace. At FeedStation, we fully support omni channel selling, but think it’s important that each company evaluates the pros and cons of launching a new channel. Walmart is no exception.
Access to a huge global audience Walmart has spent the last half-century developing a global brand. In fact, they become the largest retailer in the US 4 years before Amazon was even founded. In addition to receiving 438.5 million visits in May 2020 (up from 294.5 million visits in February 2020), Walmart has already partnered up with thousands of suppliers and sellers. Yes, they still have a long way to go to catch up with Amazon’s 2 billion monthly visitors but the increase in site traffic over the past 6-12 months is nothing to scoff at.
No monthly fees One of the biggest perks of selling on Walmart Marketplace is that you don’t need to pay a monthly fee. This makes it very attractive for new brands who want to dip their toes in...if they get approved.
Commission only fees Walmart only charges sellers through referral fees on sales made. Referral fee varies from 6 to 15 percent and depends upon the type of product you’re selling. For a vast majority of sellers, Walmart referral fees increase their margin over platforms like Amazon and eBay.
Easy checkout process As an emerging platform, Walmart.com still managed to nail their checkout process for customers. Walmart helps brands gain exposure while giving customers a secure and streamlined checkout.
Shopify partnership Walmart.com announced a partnership with Shopify, with a goal of bringing 1,200 Shopify sellers onto Walmart.com in 2020. This was seen as a direct challenge to Amazon. Walmart touts its integration as “an all-in-one solution to simplify selling on Walmart.” It promises easy listing creation, order management, and bulk operations.
For most sellers, it seems that way. At least for now. Coming in hot with a 2.2-star review on the Shopify app marketplace, reviews of this app (online and anecdotally) show a high amount of utility for very simple product offerings, but with limited flexibility to dynamically manage your online sales.
Like many tools, the Walmart-Shopify integration is 100% self-managed. Mix in a bag full of bugs that come with any new system, you need to prepare for a heavy amount of triaging issues as you get up and running, especially for managing product variants. Customer support is largely unavailable at this time.
In Walmart & Shopify’s defense, the product is still new. And, what else could you expect from a $40/month solution?
Unclear/frustrating approval process If I had to advertise one reason to tap into the Shopify > Walmart program, it would be to expedite the approval process for getting listed on Walmart. If you are ready to launch your Walmart storefront, don’t hold your breath this will happen quickly. Walmart claims approval in 2 weeks, but we have heard horror stories about 1-2 years. While this is improving, there is a lot of confusion in their seller review process including guaranteeing quality “Customer Service Requirements.” We highly recommend checking out this guide before applying.
Listing issues When more than one seller offers the same product at the same price, Walmart automatically promotes the item that was listed first. The only way to beat the first seller’s item is by lowering the cost of your item. If you are selling thousands (or millions) or products on Walmart, it can be incredibly time-consuming to understand what products are being promoted, maintaining profitability, and avoiding MAP (minimum advertised price) violations.
Pricing rules. Like Amazon, Walmart expects its sellers to offer products at the lowest price on its eCommerce marketplace. If it finds out that a particular seller is offering the same product at a lower price point somewhere else (even if another seller is doing it), it may de-list your item. The challenge for omnichannel sellers lies in maximizing profit across marketplaces, winning promoted listing status, and keeping yourself from getting de-listed. As a result, syncing prices is critical.
Just like everything in business, it depends. But the above should provide insights for consideration. Before launching on Walmart, consider what new tools, resources, and bandwidth you have at your disposal.
Need help evaluating if Walmart is right for your business? If you decide Walmart is right, we’ve got the integration standing by to get you selling quickly in this huge new rapidly growing marketplace.Give us a call for a free consultation.
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