Selling on Walmart Marketplace: is it Really Worth the Effort?

Walmart marketplace? Like the wild west. Running your own webstore? Like raising a baby pig. Matthew Ferguson explains.

Have a question for us? Send it to questions@webretailer.com. Readers’ Questions are in partnership with Emanaged and Online Seller Consulting.

Question

Hi Matt! I recently got approved to sell on Walmart which I know is special to receive, but I’m not sure it’s worth my time to prioritize this. I was going to focus on a new website originally. Is it worth listing on Walmart? I sell mostly homewares and bedding supplies. It’s a vague question, sorry! I would appreciate complete honesty.

— Will from Texas

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Answer

Hi Will!

Congratulations on being accepted to sell on Walmart. It’s certainly a great honor you have been gifted, as one of the mere tens of millions of sellers that they mass-emailed recently.

Seriously though, I’ll do my best to cast some light on this.

Walmart is huge. Epically huge. You know that already, but just so everyone else is on the same page, consider a few things:

  • Walmart has more employees than several of our planet’s countries. If their workforce were an army, it would be the world’s second largest.
  • If Walmart were a country, they would be ranked in the region of the 22nd to 24th largest economy.
  • They are bigger than Home Depot, Kroger, Target, Sears, Costco and Kmart combined. Combined!

On top of these basic bananas-crazy facts, they sell a lot of bananas. It’s their biggest seller. Bananas!

Walmart have power, and with the acquisition of Jet.com, they sent a clear message that they are investing in ecommerce. Their marketplace is still fairly new, and hasn’t grown much over the years. But soon after acquiring Jet.com, we noticed a large influx of sellers receiving invites to sell on their platform. This hit our existing clients as well as sellers in our wider network, and many new clients started asking us for help. Walmart are really going to town on email invites these days.

Walmart marketplace is also… well, fun. Think of it as a bit like the wild west.

Walmart is the marketplace to watch in North America. They have a name, financial backing and infrastructure to have a serious decade-long battle with Amazon, if they want to. As per above, they have the army and economy. Amazon will need to bring some guerrilla tactics to the fight if Walmart goes fully after them. It will be the heavyweight ecommerce battle to watch over the next few years.

But for now, ecommerce for Walmart is only about 2-3% of their total sales. It’s a backwater.

Their marketplace is also… well, fun. Think of it as a bit like the wild west. You have some ghost town categories, where the land is ripe for investment but the trickle of settlers is slow. Then you have boom-town areas with few controls or limits, but also very little clarity about what the heck is going on.

For example, different categories have listings that vary in numerous different ways. It seems that sellers can do just about whatever they want at times. The left-hand navigation filters don’t have a clue what’s going on. No one is sure what’s getting indexed and picked up in search, and wild crazy theories about how the algorithm works abound.

But there’s gold in them thar hills! As with the gold rush, many sellers are making good money because they have the land to themselves. All it took was a couple of donkeys, a pickaxe and a hessian sack to strike it rich. (Just for clarity, in this analogy, the sack is a bank account, the pickaxe is a product data file and the donkeys… um.) Anyway, if you can find yourself a rich seam, the opportunity is there.

You should be aware of a few things upfront though:

  • You’ll need to offer free shipping.
  • You’ll need to set up all sales tax codes yourself, which is a special kind of “fun”. The manual for that is six million pages long, approximately.
  • You need to offer competitive pricing. If you price too high in relation to other sellers or external channels, Walmart will suspend the listing.
  • Similarly to Amazon, you’re “connecting” to listings on Walmart. This can be an issue when data isn’t accurate. Variation changes are especially problematic.
  • The data upload formatting is a bit hit and miss, but you can find help figuring it out.

Walmart has comprehensive reporting and is slowly structuring things more effectively. But it’s a young channel and has a few chaotic areas.

Now, you said you were originally going to focus on a new website. So let’s compare selling on marketplaces to selling on your own website, as best we can. A website has some key benefits:

  • You’re growing a direct-to-consumer channel.
  • Your website has better margins (maybe, we’ll revisit this).
  • A website does more for your ego. A business card looks much better with your own domain.
  • You can provide a better quality service. You can also treat your buyers crappy, but you will likely want to dictate how well they are nurtured and cared for.

I think any ecommerce business will eventually need a website. It’s not required in every circumstance, and perhaps not at first, but if you started off selling one item on eBay and grew your sales and product catalog continuously over the years, you will eventually want a website. If I’m searching for new home decor, or bedding, I likely will appreciate the ease of buying it all from a single location.

A website project is like a single man buying a baby pig. Hear me out on this.

But you need to be ready for it. Launching a website is easy. Getting people to find and purchase from it is the real work. Assuming you have a budget to launch the site, have you put aside six months worth of marketing spend? Will you do Google ads, PPC, email blasts, advertising placements, blogging and backlink-building all by yourself? Or will you use an agency, or hire people? That’s assuming all the SEO work and product copywriting is done properly too…

Suddenly those margins don’t look so great.

A website project is like a single man buying a baby pig. Hear me out on this. Baby pigs are so darn cute on day one, and we all know that taking that little thing for a walk will get attention. But one year later, you’re bankrupt trying to feed the 400-pound darling, and exhausted cleaning up after it. The allure, along with a portion of your soul, died long ago. That’s after they chewed all your nice furniture and best linens too.

So if you are planning to launch a website, and have lined up people, budget and agencies to grow it, support it and nurture it, great. Get it launched. The sooner it’s up, the sooner the clock starts towards an eventual return on investment, which won’t be overnight.

But if you were expecting a return much sooner, and you are a small team with limited budget, launch on Walmart instead. It may be the wild west, but wild frontiers breed opportunity. More settlers are coming, so get your saloon known now. It sure beats raising a pig single-handed.

Have a question for us? Send it to questions@webretailer.com.

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Sell on multiple marketplaces without all the headaches. Tools for inventory and marketplace management, web store connectors, feed management and more. All in the Web Retailer directory.
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10 comments on “Selling on Walmart Marketplace: is it Really Worth the Effort?

  1. Funny yet informative post Matthew! Developing a great website shopping experience definitely takes more time and investment, but sellers will have more control over the brand experience and customer relationship. Some perks include data collection for remarketing and personalization, upselling and buy-online-pick-up-in-store services.

    Selling on Walmart isn’t always ideal either. Certain categories sell better than others on specific marketplaces. Customer satisfaction has been a problem on Walmart Marketplace, too. The average rating for the top 100 sellers on the platform is 3.9 out of 5, compared to the top 100 sellers on Amazon and eBay, which average a near-perfect 4.9 out of 5.

    1. Very true Jazva, very good valid points.

      If I had a point, which is itself debatable, it would be merely to highlight the vast long term project a website truly is, as oppose to a Marketplace where the marketing is done for you.

      I have worked with sellers who, upon launching a website, then wonder why no one is buying from it 3 days later… and they are being serious. A website is important, but no small task to grow.

      Walmart, as is the case with most marketplaces, is a lighter touch. Less time and effort to see some returns on the investment of your time. If you don’t have time to sell on Walmart, how will you have time to grow a website.

      At least I think that was my point. Could of been about dating strategies with pigs too, Im not sure.

  2. That article was funny as hell. What a great comparison; I heard OPEN SHOP NOW. Walmart may be the wild west but Amazon is where the millions of credit cards live and trust Prime.
    Thanks, DaveP

  3. Stands for Seller Fulfilled Prime. You need to be eligible to apply, but basically you get to keep warehousing in-house and still get ‘Prime’. An Amazon courier service will show up at your door step each morning to pick up the orders. You can’t mess up though! You may not be eligible sadly.

    Webretailer did a nice piece on it: http://www.webretailer.com/lean-commerce/amazon-seller-fulfilled-prime-guide/

    Appeagle did a good one too: http://blog.appeagle.com/amazon-seller-fulfilled-prime

  4. As an e-commerce retailer I can say that selling on Walmart is a disaster! We are very successful on Amazon and Ebay. We were originally invited to sell on Walmart’s Marketplace before they opened it to everyone.

    The user interface is terrible and you cannot create listings unless you upload them from a spreadsheet. Clunky and not user friendly.

    Once you list you items their “sales inhibitors” go to work. Their special algorithm compares your products to products that are not remotely the same. Selling a manufacturers product that has many models at different pricing levels or different colors? Forget it. The algorithm will decide that your product is available cheaper on a different site and un-publish your listing. Unless you sell the lowest priced garbage that the manufacturer sells, then don’t put it on Walmart.com.

    No worries, right, just create a case and seller support will fix it… right? Not a chance. They are there 100% to keep you from selling on “their marketplace.” They will justify what the algorithm did without ever doing any research. We sell a “Kit” on Walmart.com that has multiple items. Since the product is also alone as a standalone product (not in a kit) somewhere else in the world, it gets unpublished. Or my favorite… Walmart forces you to include shipping and then unpublishes you if your price on another site adds in shipping separately – even when the combined price is higher.

    Add to the fact that walmart.com doesn’t even notify you when you have a sale and it is ridiculous!

    They literally TRY not to let you sell anything. Plus we get less than 1% of our sales from walmart and it takes 10x more time than Amazon or ebay.

    Don’t walk – RUN – from this horrible site!

    1. So… you’re a fan? Sorry!

      I am sincerely sorry to hear about the pain John. The unpublished topic is a true thorn for many sellers, especially when you want to bundle things. Excellent detail shared about lumping shipping into price.

      It seems unrealistic that as they grow, that functionality will continue. I don’t see how they can control it properly at scale, when clearly its a mess now.

      It is sadly still the wild west. All marketplaces that survive start up go through a maturation phase. I don’t know if you ever sold on the early Amazon or eBay, but they were a bit chaotic too back in the day.

      Message me back via questions@webretailer.com if you want me to take a closer look at things. Always keep commenting and sharing!

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