There’s not a street in America that has more opportunity for traffic than an eCommerce business. Selling online has brought millions in revenue to entrepreneurs for decades.
If you’re looking to expand or launch a new eCommerce venture, selling on Walmart should be in your top options. Here’s a list of the pros and cons of selling on Walmart.
Become a Seller on Walmart
It’s no secret that major retailers are transforming their websites into eCommerce marketplaces. These retailers understand that consumers expect their store to be a one-stop-shop for all their shopping needs.
This means they have to expand their product offerings in order to meet the growing demands of customers. But stocking all that inventory themselves means taking up valuable warehouse space and fulfillment hours.
Enter marketplace sellers. As a seller on Walmart’s marketplace, you handle the product storage and fulfillment yourself. This frees up Walmart employees to focus on its own inventory instead of yours.
It also means Walmart doesn’t have to risk buying your product in case it doesn’t sell. You hold on to all your merchandise until customers show interest.
You’ll handle managing your transactions but within Walmart’s seller guidelines. They have customer service expectations you need to be prepared to meet before selling on Walmart.
What are the Guidelines for Selling on Walmart?
One of the most important factors for sellers to consider is the price. It might not be worth it to you to sell on Walmart if you’re selling luxury goods.
Walmart isn’t aiming to become a dealer in high-end products. They have a reputation for providing the best-priced products even if it’s only by a few cents.
You need to be prepared to meet this same pricing expectation when selling on Walmart. Make sure you’ve used online price comparison tools to make sure your prices are the lowest.
If you don’t, you risk having your products removed by Walmart. This is one of the most common complaints sellers have about selling on Walmart.
You have to follow two strict rules in order to sell. The first rule is the price parity rule which says you can’t sell a product that’s available at a lower price on your website.
Factor in shipping and handling fees, too. This means you can’t upcharge customers in shipping to make up for giving them a discount.
Also, Walmart has a strict price leadership rule. Walmart removes any listings that don’t reflect the lowest possible price online. You’ll also have to factor in shipping and handling here.
Some products just can’t be offered below a certain price point without losing money with each sale. You’ll need to weigh whether it’s worth it to have the lowest price just to sell your products on Walmart.
If you’re caught hiking up your prices, Walmart removes your listings automatically. Walmart uses automated price monitoring systems to ensure all sellers meet these two guidelines.
Sell on Walmart or Amazon?
The pros of selling on Walmart are best understood in comparison with selling on Amazon. It’s hard to really understand the value of being a Walmart marketplace seller without understanding the alternative.
The first value is that you won’t have to pay to play. You pay a referral fee when someone buys a product from you.
But, unlike Amazon, you won’t pay simply to sign up for the opportunity to sell. You can also offer unlimited inventory.
So, if you have a large inventory you don’t need to pick and choose which products you’ll list. Put them all out and test which are the most relevant to Walmart shoppers.
Though Amazon is definitely one of the top eCommerce websites, Walmart boasts over 100 million visitors each month. That’s nothing to sneeze at when considering selling possibilities.
You want to get your products in front of the highest number of people possible and Walmart makes that very possible. Keep in mind that Amazon has a much bigger marketplace but also a higher number of sellers.
Walmart has a limited number of sellers because they don’t approve of every seller. This is both an advantage and a disadvantage of selling on Walmart.
If you’re selected, you get to be part of an elite group of Walmart sellers who can access a large audience. But if you’re not selected, there’s nothing you can do to impact that decision except reapply at a later date.
Fulfillment Strategies for eCommerce
Another thing to consider is your fulfillment strategy. Do you have the capacity to ship dozens of products each week?
What about hundreds of products each day? The main benefit of selling on Amazon is that there’s an option to let Amazon handle the shipping logistics.
You can send your merchandise to them and they handle sales and returns with ease. There’s no option on Walmart to get help with fulfillment.
Your unlimited inventory options are yours to manage alone. If this is what you planned for all along, it still might be worth it to sell there if you have a solid Walmart ecommerce strategy.
Is Selling on Walmart Worth it?
Selling on Walmart comes with its fair share of pros and cons. Among the pros is access to millions of shoppers each month who might be eager to buy your products.
But you’ll need to be approved as a seller before you can even consider this amount of exposure. It’s important to also have a fulfillment strategy in place since Walmart can’t be your fallback in case you get overwhelmed with sales.
As with any opportunity for profit, you should plan for success to make sure the opportunity is worth it for you. For more information and tips, visit our blog for updates