This post is by Daniel Sugarman, the CEO and co-founder of Zentail.
More and more Amazon sellers are looking to spread their wings on other channels, especially as recent months (and years) have revealed the risks of relying on Amazon alone.
While Amazon continues to be the world’s dominant ecommerce platform, other channels are slowly rising up. Walmart Marketplace, for one, is making many moves to close the gap. In May 2020, the retailer announced two hour delivery in select locations, following its rollout of Walmart Fulfillment Services earlier that year.
But as many sellers are turning to Walmart with bright eyes and big plans – they’re often disappointed to find that Walmart is, in fact, a very different ballgame. Those who get accepted to sell on the marketplace often aren’t sure what to expect and haven’t invested the right time and resources to be successful.
Common mistakes Amazon sellers make on Walmart
It’s not uncommon for sellers to take a “copy and paste” approach between Amazon and Walmart. The reality is, their launch plan lacks the legs to give them a running start on the platform.
Here are a few examples of what we mean.
1. Duplicating their Amazon listings on Walmart
With this approach, sellers will try to import their Amazon listings exactly as they are for Walmart.
Instead of considering the nuances in user behavior, algorithms and requirements of each platform, a seller will try to use the same wording, pricing and product data as on Amazon. In addition to encountering listing errors on Walmart, these sellers usually miss out on opportunities to rank higher in search.
2. Using Amazon FBA (MCF) to fulfill Walmart orders
Walmart Marketplace forbids the use of Amazon FBA, and yet some sellers will push their luck and try it anyway (or they missed the memo entirely).
In a help article, Walmart states:
Sellers should not use FBA or any system that will deliver items purchased through Walmart in competitors’ packaging, as this implicitly advertises another marketplace and causes customer confusion.
This policy even extends to Amazon Logistics shipping. Violation in either of these areas will result in auto-canceled orders, warnings, restrictions and possible suspension.
3. Not making enough products or inventory available on Walmart
This usually happens when a seller is preoccupied with getting products over to FBA.
With their main focus on Amazon, sellers may only list a handful of their catalog to Walmart in an attempt to test the waters. Then they’ll provide just a small amount of inventory to feed those listings, and may not even realize when they need to restock because they are only watching their FBA inventory.
4. Not working to push sales to their Walmart listings
Rather than taking the time to prime the pump, sellers will do the bare minimum and just get their products listed.
They’ll skip over opportunities to advertise, attract reviews, offer two-day shipping and apply other tactics that could get the momentum going. Their Walmart sales then fall flat or fail to gain traction, simply because the platform wasn’t given a fair chance.
Key differences between Walmart and Amazon
Walmart and Amazon are often pitted against each other, but look beyond that and you can start to see that Walmart Marketplace is built to behave differently than Amazon.
Walmart’s aspirations and strengths as an ecommerce platform aren’t an exact replica of Amazon – so naturally, the seller experience isn’t the same either. Let’s walk through several of these differences.
1. Audience size and demographics
Audience size is an obvious difference between Amazon and Walmart. Amazon sees around 206 million monthly US visitors, while Walmart.com sees closer to 132 million monthly visitors.
Amazon has far more marketplace sellers than Walmart, so the ratio of monthly visitors to sellers is vastly different. On Amazon, you’re looking at a few thousand customer visits per seller, while on Walmart, you’re potentially looking at tens of thousands of customer visits per seller (as reported in a recent Teikametrics/Walmart webinar).
From a demographics standpoint, both channels see heavy usage from millennials. Interestingly though, Walmart reports that more than half of online buyers are from medium-to-high income households, and are families with children. This looks different from its in-store audience, which tends to consist of more lower-income households.
2. Seller registration requirements
Amazon has a low barrier to entry. This is fueled by its iconic business model (dubbed the “Bezos Virtuous Cycle”), which promotes having a large pool of sellers that will bring more products to the marketplace, lower prices and ultimately, attract more customers. Today, third-party sellers account for more than 50% of Amazon.com’s annual sales, and there are over 8.3 million total sellers worldwide (though only 2 million are active).
Walmart, on the other hand, has a relatively high barrier to entry. It’s strictly for domestic US sellers and requires applicants to have prior business experience and to prove a high level of customer service.
In the Teikametrics webinar mentioned above, Walmart spokesperson Alicia Definis said:
We never intend to have millions and millions of sellers within the platform. We really believe that we can get the experience that we need by partnering with the right group of sellers.
As of this writing, there are around 35,000 Walmart Marketplace sellers.
3. Listing requirements
UPCs are to Walmart as ASINs are to Amazon. On Walmart, you must provide a UPC for every product you list. This has been a source of confusion for many sellers in the past.
For example, say another Walmart seller purchased a phony UPC from a provider outside of GS1 and listed their product on Walmart before you. If your product shares that code, it may then appear under the incorrect item (in which case you’ll have to locate the right UPC and submit a product ID request).
Furthermore, Walmart’s categorization system is different from Amazon’s. A shoe that’s categorized as Clothing, Shoes & Jewelry > Men > Shoes > Athletic > Running > Road Running on Amazon may appear under Clothing > Shoes > Mens Shoes > Mens Sneakers & Athletic > Mens Running Shoes & Sneakers on Walmart.
Walmart also has a different standard than Amazon’s strict shoe sizing requirements, and when looking at the types of filters on search result pages, you can start to see how buying behaviors differ on each platform. It’s important to know these nuances when setting up your product feed for Walmart.
4. Fulfillment options
78% of top Amazon sellers use FBA to some extent. Meanwhile, Walmart forbids the use of FBA. They’ve rolled out a service of their own called Walmart Fulfillment Services (WFS), though it’s currently only available to sellers who’ve been with the marketplace for some time.
Aside from this, Walmart favors sellers who are part of their 2-Day Shipping program via self-fulfillment or Walmart’s fulfillment partner, Deliverr. The 2-Day Shipping tag is equivalent to the Prime tag on Amazon; it boosts your chances of winning the buy box and lets you compete on service, not just on price.
5. Pricing policies
Walmart is a bit stricter on this front. The retailer has, after all, built its name around the promise of “everyday low prices.” (A study of 50 identical items found that the total balance on Amazon was 10.4% higher than on Walmart.) Walmart may therefore take extra measures to ensure that your products aren’t being sold at a lower price anywhere else.
That being said, Walmart can offer more control over pricing from within the platform. While price erosion on Amazon is largely driven by competition (for example, from manufacturers overseas), Walmart’s is largely defined by its pricing policies.
As long as your product isn’t being sold at a drastically lower price on another site, you have less to worry about in terms of price competition on Walmart.com. You can experiment with slightly higher prices that raise profit margins. There are also Walmart repricers out on the market – some of which are algorithmically wired versus rules-based to allow for smarter repricing.
6. Return policies
Most Walmart Marketplace orders can be returned at a Walmart store (though in the months surrounding the COVID-19 outbreak, certain products were temporarily blocked from in-store returns). Buyers are protected from any restocking or return shipping fees, and are thereby incentivized to make more instant purchases.
This could, however, mean more frequent returns. The silver lining is that Walmart’s return shipping service offers discounted rates to ease the burden on sellers.
As a Walmart seller, you have more freedom in choosing your own return window and policies. Most Amazon sellers are locked into the default FBA/Prime return policy. Keep in mind that a longer return window may actually have a positive impact on the volume of returns, because buyers are less pressured to make a return decision right away.
7. Advertising programs
Walmart is far less saturated with advertisers than Amazon. Only 1.6% of sellers are currently advertising on Walmart, according to Teikametrics, making it an attractive option for new advertisers.
Note that the logic behind Walmart ads is unique – and for some, more challenging. Walmart uses first-price auctions, meaning you pay whatever amount you bid when you won the auction.
By contrast, Amazon works off a second-bid model in which the auction winner pays the amount of the second highest bid, plus one cent. To be a successful advertiser on Walmart, you must therefore have a structured approach for calculating how much to bid on keywords to win an auction without overpaying.
8. Maturity of the marketplace overall
Let’s not forget that Walmart’s marketplace is still somewhat in its infancy. While it has made great strides over the last several years, its seller services are nowhere near as expansive as Amazon’s. You should expect longer wait times between support tickets, and regular updates to its platform. Some newer initiatives, like WFS, may take longer to roll out and make available to all sellers.
Rather than getting frustrated when Walmart services don’t live up to Amazon’s, you’ll want to give it some time and focus on aspects of the channel that can be used to your advantage. Walmart is a long-term play. Your greatest ROI will likely happen further down the road, but as an early adopter, you’ve got the chance to learn the platform inside out.
How to get ahead on the Walmart marketplace
We’ve covered a number of ways that Amazon and Walmart differ. Now, here’s what that means to your overall approach to selling on Walmart.
1. Apply to sell on Walmart sooner rather than later
If your brand is a good fit for Walmart (you’ve been in business for a while and have moderately-priced products that are appropriate for Walmart), apply as soon as you can. Get ahead of other sellers and give yourself a runway to test and optimize your Walmart strategy.
There are several ways to get ahead at the application stage. For starters, tapping a preferred Walmart partner like Deliverr, Zentail or Teikametrics can put you in a different queue than other applicants. Since these partners can vouch for your business, you can get through the “trust and safety” review process faster and potentially cut your wait time from weeks to days.
Another way to ensure that your application moves through the system more quickly is by checking that your Tax ID address matches your company address. This allows Walmart to move you straight to the next phase instead of asking for more information.
2. Find a logistics solution other than Amazon FBA
Not to sound like a broken record, but Walmart will not tolerate packages that are fulfilled by Amazon. This is a surefire way to lose your selling privileges. You must therefore find another third-party logistics partner (3PL) to assist with Walmart orders or fulfill through your own warehouses.
As mentioned, Deliverr is Walmart’s official fulfillment partner. Any Deliverr merchants are pre-approved for the 2-day fast shipping tag and benefit from greater visibility in organic search rankings as a result.
3. Automate the most tedious and error-prone tasks
Find a multichannel software that can keep you from wanting to tear your hair out when listing your catalog to Walmart. As with any marketplace, Walmart has its own unique quirks and requirements. If you’re not familiar with them, you’re in for a long ride.
The best multichannel software will offer tools that leverage an algorithm or AI to automatically format your product data to meet Walmart’s requirements. It should eliminate tasks like having to manually upload images, set up variation listings and key in basic data for every listing. It should also help you fill in holes within your data (like required fields that are unique to Walmart), giving you the freedom to focus on more productive tasks.
Software can help with inventory management as well. It can prevent overselling and inaccurate quantities when you’ve got multiple sales channels running at the same time. The right software partner should allow you to easily identify when your Walmart inventory is running low and calculate how much to restock.
4. Consider advertising on Walmart
Walmart offers pay-per-click ads called Sponsored Products, which can be applied to most products that already win the buy box. If you know that a certain keyword performs well on Amazon, consider advertising against this keyword on Walmart. Ads can be instrumental in getting views, purchases and reviews on new or slow-moving products.
With that said, Walmart’s first-price bidding auction can hurt your wallet if you don’t know what you’re doing. It’s generally recommended that you use manual instead of automatic bidding for ads to stay in control of costs, and to consult an expert if you’re not sure how to manage campaigns.
Make sure the actual listing for any advertised product is fully optimized. You don’t want buyers clicking on your ads, only to be dissuaded by the listing content. As you gain visibility through ads, your organic ranking for the same product should benefit too. This “flywheel effect” can pay big dividends in the long run.
5. Be creative and build your Walmart sales
Get resourceful when building up steam for your brand. Use product kits and bundles to drive up average order value (AOV), list to non-competitive SKUs and avoid potential pricing violations across channels. For instance, if you sell five-packs of your product exclusively on Walmart, then you could avoid getting dinged for having a different price on Amazon while also providing great value to customers.
Try snagging some early reviews by emailing existing customers. Some sellers even begin by asking friends and family to make a few purchases. Others leverage platforms like Bazaarvoice to attract reviews.
It can help to point some off-channel posts, like social media ads, to your Walmart listings. Anything you can do to build up your reputation and click-through rates early on can help get your products ranking higher sooner.
Get working on your Walmart strategy
Tackle Walmart with a plan. Don’t expect glittering results without putting some work into it. And avoid waiting for someone else, like Walmart’s support team, to map out a strategy for you.
While you can trim out tasks that slow you down through automation, be ready to invest time, money and effort to drive results. Approach Walmart with fresh eyes and treat it as its own channel, not simply a copy of your Amazon storefront.
This post was by Daniel Sugarman, the CEO and co-founder of Zentail, an ecommerce operations platform for multichannel brands and resellers.
The Zentail platform is trusted by top 1,000 Amazon sellers and is consistently rated five stars for its AI-driven automation, ease of use, and reliable integrations into today’s best marketplaces.
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From Amazon to Walmart: Why You Can’t Copy and Paste Your Strategy