Walmart's Marketplace continues to grow in popularity as they go head to head with Amazon to vie for the right sellers.
As the largest retailer in the world, Walmart flaunts an extraordinary network of stores, distribution centers and buyers that gives even Amazon a run for its money.
In 2020, Walmart took several more steps to give its marketplace a boost: two-hour delivery, Walmart Fulfillment Services (WFS) and Walmart+. Walmart.com now draws over 110 million monthly visitors and consistently posts 35% year-over-year growth.
For sellers, Walmart Marketplace not only promises more exposure to buyers, but also a relatively wide open field. For one, Walmart is far less competitive than Amazon. It currently hosts just around 33,000 third-party sellers who do regular business in the U.S. (compared to Amazon’s 2.5 million sellers across the globe). While Amazon’s business model depends on an enormous number of sellers to increase product assortment and drive prices down, Walmart pursues a less-is-more approach.
“We never intend to have millions and millions of sellers within the platform,” said Walmart spokesperson, Alicia Definis, in a webinar hosted by Zentail partner Teikametrics. “We really believe that we can get the experience that we need by partnering with the right group of sellers.”
Could Walmart Marketplace be the next move for you? Read on to learn about the qualifications of becoming a Walmart seller and how to get started.
Does Walmart Marketplace Make Sense for You?
Consider first your customer base and whether or not it matches Walmart.com’s buyer persona. Interestingly, Walmart Marketplace attracts a slightly different crowd than its stores. According to Walmart:
- More than 33% of customers are between ages 23-38
- The average buyer has a medium-to-high household income
- And most are homeowners with families
While they’re not the stereotypical superstore shoppers you may think of from decades’ past, marketplace buyers are still price-aware. The most successful products are generally moderately priced and are neither too high-end or low-end.
What’s more, Walmart Marketplace buyers are similar to—but not identical—with the ones you reach on Amazon. Just about 57% of Amazon shoppers also shop on Walmart.com. The remaining make up a potential new set of shoppers for your brand to reach.
Walmart Marketplace offers a robust mix of 52 million SKUs across 35+ product categories, ranging from automotives to furniture. It is not the place to sell used, vintage or handmade products (here’s a full list of prohibited categories and product limitations by category). And not all available categories have the same level of demand.
“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,” writes WebRetailer.
Prior to selling on Walmart, you’ll want to scope out what the competition is like in your subcategory and for signs of whether it’s a dead or active category. On one hand, a quiet, less-saturated space could mean an opportunity for your business to build authority in it. On the other hand, it could mean far less sales than you were expecting, so you’ll want to manage your inventory accordingly.
Another consideration: Walmart tends to favor applicants with new SKUs, or products that are high-performing elsewhere and aren't currently listed for sale on Walmart.
Costs of Selling
One big pro of selling on Walmart is that there are no monthly or initial set-up fees. Listing to the marketplace is 100% free. For every sale, Walmart just charges a 6-20% referral fee depending on your product category. There are no minimum referral fees, either.
It’s worth noting that you need a UPC for every product you want to list which can cost a pretty penny if you haven’t accounted for it already. You’ll also need to be able to handle order fulfillment outside of Amazon FBA (FBA is expressly forbidden by Walmart) and offer free shipping.
Keep in mind that Walmart is strict about pricing, too. Your landing price (meaning your sale price + shipping and handling costs) must jive well with its “low price” guarantee policy. If Walmart discovers you list a product at a lower price point on another site like Amazon or eBay, you will be delisted. This could, as you can imagine, translate to lower profit margins.
Unfortunately, you can’t wake up one day and simply decide to join Walmart Marketplace. Your business has to apply to be a seller and be invited to the platform.
To even be considered, your business must be registered in the U.S. and have a U.S. address for your warehouse. Furthermore, you must be able to demonstrate previous marketplace experience and a high level of professionalism.
Update (March 19, 2021): Walmart has started to lift restrictions and onboard select Chinese merchants in an effort to open up its marketplace to international sellers. Sellers must still have a U.S. distribution center or partner and the process is still highly regulated, but Walmart will accept W8 ECI and BENE on the application. In other cases, international sellers may qualify for an exception if they have a physical presence (among other criteria) in the U.S.
During its “trust and safety” review process, Walmart specifically scans for:
- Prior experience on your own website and/or a marketplace like Amazon or eBay
- Strong sales history and reputation
- A unique, compelling product assortment
- Competitive pricing
- First-class customer service
- Fast and reliable fulfillment
In other words, if you have a well-run selling operation that’s earned positive feedback from customers through Amazon or other marketplace websites, you are a good prospect. If you’re just starting out, you should wait to apply until after you’ve gotten more experience.
A Few Challenges to Be Aware Of
Walmart Marketplace has been called the wild west on several accounts. A big friction point is that it’s still a developing marketplace and you won’t get the same level of support, predictability or seller resources as on Amazon (where many sellers hail from).
For example, getting products listed can be challenging. Left-side navigation filters and category mappings can feel random. Requirements, like Walmart’s system of mapping products using UPCs, can be a source of headache (more on this under ‘How to List’).
Trying to get your products to rank can feel like a shot in the dark—though some sellers say it’s easier to win the Walmart buy box, perhaps because of less competition.
If you’re hoping to copy and paste your Amazon strategy to Walmart, you’re in for a rude awakening. Success on Walmart requires a fresh approach. One that’s appropriately scaled for Walmart and includes some investment of your time and resources to get right.
How to Apply for Walmart Marketplace
There are technically three different ways that you can start selling on Walmart.com: 1P, 3P and DSV. 3P, however, offers you the most control over your business and is probably the most popular option amongst sellers. For the purposes of this article, we'll assume that you're seeking to join as a third-party marketplace seller.
So, if you think the Walmart Marketplace makes sense for your business, apply to join through this online application. Walmart estimates it’ll take ten to fifteen minutes to complete.
- Your U.S. Business Tax ID (an SSN will not be accepted)
- W-9 and an EIN Verification Letter verifying your U.S. business address
- How you plan to integrate your product catalog—via a bulk upload, API or a solution provider
- Primary product categories, catalog size and related product information
If your business is headquartered outside the U.S., your business must still be legally incorporated within the U.S. and be able to provide a U.S. Business Tax ID (EIN), W-9 and and EIN Verification Letter. You must also have a warehouse or 3PL provider located within the U.S.
Walmart’s "trust and safety" review process can take several weeks as the company performs various checks.
Pro Tip: Working with an official Walmart channel partner, like Zentail, can expedite the process. Zentail can route your application to a dedicated integration team at Walmart in a preferred queue and land a review as quick as 48 hours. Walmart’s Alicia Definis also notes that by ensuring your Tax ID address matches your company address, you can avoid having to produce extra documentation during the review process. View other tips for applying to sell on Walmart.
How to Set Up Your Walmart Seller Profile
Once you’ve been accepted, you’ll have to sign a Marketplace Retailer Agreement. Walmart will then send you an email with a registration link that takes you to their online portal. You’ll receive a “launch checklist” and step-by-step instructions for getting started. This part includes entering your company information, setting up shipping/returns and entering your billing details to make sure you get paid.
Pro Tip: This step requires you to set up sales tax information. If you’re not sure where you have sales tax obligations, we encourage you to consult an expert like TaxJar. Local tax laws are still changing, and in 2018, economic nexus added to physical nexus qualifications. Under this new precedent, could be held responsible for collecting and remitting sales tax if you generate a certain amount of sales from buyers within the state.
How to List Your Products
You can upload your product information via the Marketplace API, a Walmart channel partner or Seller Center, either product-by-product or in bulk. It’s a fairly straightforward process, though it can be tedious, especially for things like variation listings.
Every SKU requires a UPC code, which you’ll want to get directly through GS1. While it’s not the cheapest method, it’s the official platform for purchasing barcodes. Sellers who purchase from other sites have had issues mapping their products to the right listing once in Seller Center (not to mention, you could get kicked off marketplaces for violating listing policies). If you sell multipacks or bundles, you’ll want to purchase unique UPC codes for them.
In addition to acquiring a UPC, make sure that the details in your product information are all correct. Walmart requires sellers the below details for every listing:
- Product name
- Long description
- Short description
- Primary product image
- Manufacturer name
- Partner item ID
- Tax code
- Origin of components
- ‘Must ship alone’ status
- Availability code
- End date
Other categories will have conditional product details that are exclusive to Walmart. And some will have their own image or formatting requirements. Across all categories, there are best practices to be followed.
It’s important to know that Walmart works on a first-come-first-served basis. Walmart’s algorithm selects a Primary Content Provider (PCP) (which, again, is usually the first seller to list) and serves their content even if you’re winning the buy box.
Pro Tip: You’re likely familiar with Amazon’s Brand Registry, which helps you avoid misrepresentations of products that you own. Walmart doesn’t have an official brand registry but may offer extra protections if you’re willing to list your full catalog on Walmart and ensure price parity. Here again, Zentail can make that introduction for you.
Read More: 6 Brand Control Strategies for Marketplace Sellers (Ebook)
Zentail’s software can also greatly simplify the Walmart listing process. The platform comes with built-in intelligence, like SMART Types, which can automatically categorize your products for you. SMART Types will pull in data from multiple sources including Amazon, and map required and advanced attributes to the corresponding Walmart fields. Through Zentail, you can additionally perform order testing and other checks before going live.
Pricing for Walmart—Key Considerations
Walmart may have dropped its slogan “Always Low Prices,” but competitive prices are still (and will always be) part of the Walmart brand.
According to its Seller Agreement, your price “and every other term of offer and/or sale of the Products (including associated shipping and handling charges and options, any “low price” guarantee, rebate or discount, any free or discounted products or other benefit available as a result of purchasing one or more other products, and terms of applicable return and refund policies) is at least as favorable to Walmart.com users as the most favorable terms upon which a product is offered.”
Put simply, Walmart will monitor for two price-related policies:
- If you’re selling your product for less elsewhere (price parity). If one of your products can be purchased from your store on a competing website at a lower price (including shipping), the product will be delisted on Walmart.
- If anyone is selling your product for much less (price leadership). If one of your products can be purchased from any seller on Walmart.com or any competing site at a drastically lower price (including shipping), the product will be delisted.
Competitive pricing is one of the biggest factors for winning the buy box (the other is shipping, as described in the next section). Since winning prices can fluctuate at any time, you need to check in on your competitors’ prices regularly and be ready to adjust yours.
Pro Tip: There are Walmart repricers out on the market that can automatically check competitive pricing for your listed products. Generally speaking, there are two major types of repricers: rules based and algorithmic/dynamic. A dynamic repricer is often a much safer bet, as it will continuously monitor the buy box winner and try to get you winning at the highest possible price. Rules-based repricers work within limitations you set, meaning you’ll have to regularly maintain the list of competitors and/or rulesets for your repricer to consider. This often leaves many holes and room for competitors to go undetected.
Fulfillment and Customer Service
An outstanding customer experience is one of the expectations Walmart has for its sellers and this includes offering prompt, reliable and preferably free shipping.
You can set shipping costs using the tiered-pricing (based on the price of the item) or weight-pricing models. Offering multiple options is highly recommended.
During the day-to-day grind, you’ll be measure according to Walmart’s Seller Performance Standards:
- 90-Day Order Defect Rate <2%
- On-Time Shipment Rate >99%
- Valid Tracking Rate >99%
Item ratings are no longer considered as part of your performance, but they’ll impact your organic ranking.
One of the most important criteria for ranking—if not the most important criteria—is your shipping speed. Walmart offers several fast-shipping programs, the most important arguably being the Walmart Free TwoDay shipping program. The 2-day tag awarded to participating sellers is a big factor in winning the buy box and earning a higher organic position.
This program is currently offered to sellers who can meet strict standards or are working with Walmart’s official fulfillment partner, Deliverr.
Walmart is rolling out Walmart Fulfillment Services (WFS), too, that operates along the same lines as FBA. WFS lets you store your inventory at Walmart fulfillment centers and offload packing, shipping and customer support for these items to Walmart. Note that as this service is still being introduced—not all sellers qualify for it.
Should you choose to handle fulfillment and service on your own, make sure to keep these other things in mind:
- Packaging must be non-branded, and can’t include materials from any company other than Walmart
- You cannot use Amazon’s Multi-Channel Fulfillment (MCF) service for the above reason
- Customer service information must be clearly displayed in your product listings, and should include your support email address, phone number and hours of operation
Pro Tip: Zentail is an integration partner of Deliverr. If you don’t yet qualify for WFS or simply prefer to handle fulfillment independently of Walmart, Deliverr can handle all the nitty-gritty for you in accordance with Walmart’s policies. Meanwhile, Zentail will ensure that your inventory and quantities remain accurate on every listing.
Returns and Cancellations
One advantage of selling on Walmart Marketplace is that you can enjoy more flexibility when setting your return policy; on Amazon, you’ll likely default to Amazon FBA’s return policy to stay competitive.
That being said, Walmart has minimum requirements for returns. You must allow returns within at least 30 days, with the exception of certain electronics items. Return windows all begin seven days after an item's ship date.
Beyond this, you can set your own return policy/eligibility requirements (this should match the return policy you maintain on your webstore). If your conditions are met, buyers can return products via mail or at a Walmart store. Or, you can let buyers keep items if they’re within a certain price threshold.
Buyers are usually protected from any restocking or return shipping fees. Sellers will have to go through FedEx, UPS or Walmart’s Returns Shipping Service (RSS), which offers lower shipping rates, to handle marketplace returns. Refunds will be issued once packages get scanned by the shipping carrier or Walmart stores.
As far as cancellations go, every cancellation is final regardless of who initiates. All shipments must be halted.
Pro Tip: You can request an exception to Walmart’s standard return policy for cases like freight shipments, Hazmat items or other reasons as described here. For these exceptions, sellers can apply extra fees up to 20% of the item price for items not in original or sellable condition.
Advertising on Walmart
Walmart’s pay-per-click Sponsored Products can be used on products that already win the buy box (note: these are different from Walmart Promotions). Ads areinstrumental in increasing your visibility and gaining your first reviews, especially as they’re relatively underused. While Amazon is saturated with advertisers, only 1.6% of all Walmart sellers advertise on the platform, according to Teikametrics.
That being said, Walmart ads work off a first-price auction model. This means you pay whatever amount you bid when you won the auction—even if it’s 10x more than the next highest bidder.
Amazon ads, by comparison, use a second-bid model where you only pay the amount of the second highest bid, plus one cent.
So, if you want to experiment with ads on Walmart, you’ll need to have tight control over your bids and CPC. You’ll gain the best control by selecting manual campaigns as opposed to automatic bidding. You’ll also want to make sure your listings are fully optimized to maximize the ROI of any ads that point to them.
Pro Tip: Teikametrics is one of the few software providers with an official advertising partnership with Walmart. If you’re not ready to study and closely manage your Walmart ad campaigns, you’ll want to consider getting their help. They can help you hone in on the keywords and best campaign structure for stretching the value of your advertising dollars.
Tips for Boosting Your Success on Walmart
Our first piece of advice: take a few fundamental steps to ensure you can maintain control of your brand on the Walmart Marketplace. This includes increasing your brand recognition while adhering to Walmart’s regulation, and defining ways co-exist with your own resellers. You can find our recommended best practices here.
Here are some other things you’ll want to consider:
- Make sure your listings are in great shape. Especially if you’re the brand owner, go beyond minimum listing requirements and offer extra images, descriptions and product details. Just like with any marketplace, Walmart cares about your SEO/keywords to understand how to rank your listings and map them to customer searches. Within your descriptions, cut out any “fluff” and speak directly to the questions buyers may have when evaluating a product like yours.
- Offer free two-day shipping. As mentioned above, the 2-day shipping tag gives you a big advantage. They’re prominently displayed on Walmart search pages and have their own filter in the left-hand navigation. They’re critical for winning the buy box, and can help you compete on service rather than on price alone.
- Profit from a less-saturated ad environment. Advertising on Walmart can pay bigger and more immediate dividends that you’d expect on Amazon. And Sponsored Products will not only help you gain short-term sales; the extra views and clicks from these ads can help your long-term SEO as well.
- Pay close attention to reviews. They’re crucial to Walmart’s algorithm. You can leverage tools like Bazaarvoice to capture more reviews, or ask a few friends and family members to purchase and review products to prime the pump.
- Learn from experience. Walmart has a knowledge base to support sellers, but there are also unofficial forums for Walmart sellers, such as this subreddit or this Facebook group. It’s worth investigating and participating in these resources to explore the kinds of issues sellers have and how they’re able to solve them.
Want Help from a Few Professionals?
As an official integration partner of Walmart, Zentail is deeply experienced in helping sellers launch on Walmart.com. We know that Walmart isn't just a plug-and-play app (recall Shopify's bumpy integration into Walmart) and have guided sellers from their first Walmart order to their thousandth—and beyond. If you have questions, hit us up at email@example.com or request a demo today!
Steps for Going Live With vs. Without Zentail
<th class="tg-38kr">By Yourself</th>
<th class="tg-3yha">With Zentail</th>
<td class="tg-ibbi">Application & Listing</td>
<li>Apply to Walmart Marketplace</li>
<li>Confirm your readiness to onboard</li>
<li>Complete pre-test order steps in your Launch Checklist</li>
<li>Upload your SKUs</li>
<li>Resolve listing errors</li>
<li>Upload more SKUs</li>
<li>Resolve more listing errors</li>
<li>Request test orders and conduct order testing</li>
<li>Upload more SKUs</li>
<li>Resolve more listing errors</li>
<li>Automatically import your products into Zentail. Let Zentail's SMART Types categorize your products for you.</li>
<li>Connect your Walmart and Zentail accounts, and set your SKUs to list to Walmart</li>
<li>Request test orders, conduct testing and set your Walmart integration to production mode in Zentail</li>
<td class="tg-ibbi">Total Time to Launch</td>
<td class="tg-ibqw">4 to 8 weeks</td>
<td class="tg-gxsv">3 days to 3 weeks depending on your catalog and workflow readiness</td>
This blog was originally published in July 2016 and has since been updated to reflect current information.
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