Walmart Marketplace Pros and Cons

If you’ve followed ecommerce news lately, you’ve probably heard a lot about the Walmart Marketplace, an online outlet for the retail behemoth. Over the last few years, Walmart has made some strategic acquisitions and updated its ecommerce policies, all of which seem to challenge Amazon’s share of the online retail market.  

And all those efforts seem to be paying off with their sales growing by 43% in Q4 2018.  

So, the question on the minds of many online sellers now is, “Should I start selling on Walmart?” To that, we can respond with a confident and resounding “… Maybe?” 

It’s not exactly a yes-or-no question; how successful you’ll be on Walmart Marketplace depends on your brand, products, and most importantly, your prices.  

To help you decide if selling on Walmart is the right decision for you, we outline the pros and cons of selling there below.  

 

Pros of Selling on Walmart Marketplace

 

No Regular Fees

Right away, the notable advantage of the Walmart Marketplace is the lack of regular fees. Sellers only pay a referral fee when they actually make a sale. Compare that to Amazon, where sellers must pay monthly dues and variable closing fees on top of referral fees.  

How much are Walmart Marketplace referral fees? Well, they change based on the product category, but most land around 15%.  

Check out our complete list below, copied over from Walmart Seller Help. See what kind of fees you’ll have to pay for your best-selling products to predict how profitable selling on Walmart would be for you.  

  1. Apparel & Accessories – 15% 
  2. Automotive & Powersports – 12% 
  3. Baby – 15% 
  4. Beauty – 15% 
  5. Books – 15% 
  6. Camera & Photo – 8% 
  7. Cell Phones – 8% 
  8. Consumer Electronics – 8% 
  9. Electronics Accessories – 15% 
  10. Furniture & Decor – 15% 
  11. Gourmet Food – 15% 
  12. Grocery – 15% 
  13. Health & Personal Care – 15% 
  14. Home & Garden – 15% 
  15. Jewelry – 20% 
  16. Kitchen – 15% 
  17. Luggage & Travel Accessories – 15% 
  18. Major Appliances – 8% 
  19. Music – 15% 
  20. Musical Instruments – 12% 
  21. Office Products – 15% 
  22. Outdoors – 15% 
  23. Personal Computers – 6% 
  24. Pet Supplies – 15% 
  25. Shoes, Handbags & Sunglasses – 15% 
  26. Software & Computer Video Games – 15% 
  27. Sporting Goods – 15% 
  28. Tires & Wheels – 10% 
  29. Tools & Home Improvement – 15% 
  30. Toys & Games – 15% 
  31. Video & DVD – 15% 
  32. Video Game Consoles – 8% 
  33. Video Games – 15% 
  34. Watches – 15% 
  35. Everything Else – 15% 

 

No Inventory Limitations 

According to the Walmart Marketplace FAQs page, “there are no SKU minimums or maximums, so list your entire catalog of eligible items with us.” That means sellers with a robust product range don’t have to worry about choosing which products they can list.  

Of course Walmart Marketplace has its own list of prohibited products, but they’re pretty standard compared to other online marketplaces, so it shouldn’t be a problem.  

 

Reach Over 111 Million Unique Visitors Every Month

According to Comscore, Walmart had more than 111 million unique visitors in April 2019, ranked #21 out of all U.S. multi-platform properties. That’s 111 million tiny advantages to selling on Walmart Marketplace. Their traffic seems to be growing month-by-month as well, and Walmart consistently lands in Comscore’s monthly Top 50 rankings.  

So, to put it another way, selling on Walmart gives you access to a large community of customers you might not be able to reach otherwise.  

 

Cons of Selling on Walmart Marketplace

 

You Need Approval 

Sometimes it’s not a question of should you sell on Walmart Marketplace, but rather, can you sell there? Sellers must be approved before setting up shop because Walmart aims to maintain its reputation both as a trustworthy vendor, and one that sells at affordable prices.  

The application process takes about 10-15 minutes to complete (according to the instructions), but you’ll need some official documents like your tax ID, W-9, and product GTINs. You’ll also be assessed on your brand and performance, in particular your previous marketplace experience, fulfillment methods, and prices.  

Click here to go to the Walmart Marketplace application and see for yourself what to expect.  

 

Strict Removal If Too Pricey

One of the most common complaints from the Walmart Marketplace sellers is that their products are removed suddenly because of the price. In keeping with their reputation for low prices, Walmart has two non-negotiable rules for its sellers: 

  •  Price Parity Rule — Sellers cannot sell their products at a lower cost on other marketplaces. This isn’t just about the sales price, but also factors in shipping and other fees.  
  • Price Leadership Rule — Walmart removes listings if the same product is available on another site for less, regardless of the seller. Again, this factors in shipping and other fees.  

Walmart has automated price-monitoring systems, so we don’t recommend trying to deceive them. What this amounts to is that, if you want to sell on Walmart, you have to meet their pricing standards.  

 

No Fulfillment for 3P Sellers

Some Amazon sellers swear by FBA as an alternative to storing and shipping their own products. Walmart offers no such service, and requires 3P sellers to handle their own storage, shipping, and returns.  

It’s not all bad news, though. Walmart partners with Deliverr and encourages sellers to ship through them, even offering special benefits such as pre-approval for 2-day shipping. You can learn more about our partnership with Deliverr here 

 

Final Word

To simplify things, break down your decision to join Walmart into three factors: 

  • Is the referral fee for your top product categories advantageous?  
  • Can you consistently meet Walmart’s standard for low prices?  
  • Do you have a cost-effective method of shipping your products?  

Before you make a decision, take a look around both the Walmart Marketplace and its top competitors. Take notice of whether you can undercut your rivals’ prices, because if you don’t, Walmart’s price-monitoring algorithms will.  

But the general response from Walmart sellers is that, if the initial obstacles don’t stop you, then joining the Walmart Marketplace is well worth the effort. If anyone has the opportunity to challenge Amazon, it’s Walmart.  

Think you’re ready to list your products on Walmart? Check out this guide on how to sell on Walmart. 

 

FREE GUIDE:
Master The Walmart Marketplace
FREE GUIDE:
Master The Walmart Marketplace

Building a solid brand reputation online can take years, but when you hitch your wagon to Walmart.com, you get the advantage of Walmart’s brand recognition to help drive sales. Check out our free guide to claim your piece of the pie.

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