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