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5 Reasons to Reconsider Selling on the Walmart Marketplace
Manage episode 292562080 series 2906497
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Walmart's multi-seller marketplace grew a bunch in 2020. But is it a good fit for your business? We go over five reasons why you may want to think twice about selling on the Walmart Marketplace.
It looks like Walmart is focused on sellers from Amazon, eBay, and beyond these days. They really want these folks to be third-party sellers on the Walmart Marketplace, too, if what they're offering is any indication.
Is it a good idea for you to join up? Maybe, but maybe not. Let's go over five reasons why you might want to reconsider selling on the Walmart Marketplace.
Let's begin with the fact that this marketplace is growing, but everyone else is growing, too.
Online sales increased markedly overall in 2020 as a result of the global pandemic. Amazon reported a 44 percent increase in sales year over year for the fourth quarter of 2020. And according to Digital Commerce 360, eBay increased gross merchandise volume by 17 percent year over year, with a 14-point-five billion-dollar increase in GMV. Marketplace Pulse reported that Etsy's numbers grew as well in both buyers and sellers — thanks at least in some degree to face masks. Everyone staying at home seemed to help all the big-name online marketplaces grow, generally speaking.
Another thing to know about Walmart is that it's easy to start selling, but not that easy.
Not everyone is allowed to sell on the Walmart Marketplace. First you have to be approved. According to SellerApp, that waiting period typically takes upwards of two weeks. Including onboarding, the entire process can take up to four weeks. What's more, Walmart expects its sellers to be able to show that they have a few factors nailed down. These include top-notch customer service, competitive prices, and the ability to fulfill orders fast, efficiently, and accurately.
They also care about what you sell. The oversight might feel cumbersome for some sellers who like the freedom and control of curating and monitoring their own inventory. But the vetting process also marks you as a seller that buyers can trust.
Our third reason to reconsider the Walmart Marketplace is that competing with tried-and-true services is tough.
The Fulfillment by Amazon program started in 2006, so Amazon's had a lot of time to work on it. It's imperfect, but it's a system that continues to evolve. The Walmart Marketplace will benefit from some of the knowledge gleaned by that evolution, of course. But it'll inevitably go through growing pains of its own, as it merges, grows, and adapts to the expectations of sellers as well as buyers.
You might also want to know that being a Walmart Marketplace seller isn't completely free.
Walmart charges what they call a "reasonable referral fee," and they only do so after you make a sale. The fee varies by product category. But according to Walmart, it runs between 6 percent and 20 percent of whatever you charge per item.
SEE ALSO: 9 FBA Alternatives That Amazon Sellers Should Consider
Our final reason to reconsider selling on the Walmart Marketplace is that you're bound to lose the trust of some consumers.
According to data from Kantar Retail's ShopperScape survey, Walmart's average customers have an annual household income of around 76,000 dollars. Amazon's customers have household incomes of 84,000 dollars, meanwhile. There are shoppers who will associate the Walmart brand with lower-end products. Those buyers likely won't be looking for you at the Walmart Marketplace, and very likely, never will.
If you liked what you heard, be sure to subscribe so you'll never miss a new one. And if you want to learn how you can turbocharge your Marketplace revenue and gain access to the exclusive DealNews traffic network, head to advertise.DealNews.com , or send an email to advertise@DealNews.com.
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