Walmart is one of the biggest corporations in the world, complete with an online kingdom that’s expanding at an astonishing rate. It now sells more than 60 million items on its website—75% of which come from non-store inventory—and has courted more than 50,000 marketplace sellers in recent months.
While most merchants know Walmart Marketplace for its 1P and 3P options, there’s a third option worth keeping an eye on: Walmart Drop-Ship Vendor (DSV).
Through this program, you can gain access to Walmart’s massive audience while offloading certain tasks and costs to the company itself. But as with Walmart’s other programs, to participate in its dropshipping program, you need to tick all the necessary boxes. Walmart DSV is also slightly different than the dropshipping you’re accustomed to, so it’s important to understand how the program works.
In this blog, we’ll cover all the essential details of the Walmart DSV program, plus provide five best practices to keep in mind.
What Is Walmart DSV?
As a Drop Ship Vendor (DSV), you work as a supplier for Walmart’s ecommerce division, mailing online orders directly to customers or stores. This program is designed for dropshippers who can handle high-volume orders and can store products at their own warehouse locations.
The program is set up similarly to a traditional wholesale relationship, requiring you to:
- Work with a buyer to negotiate pricing, promotions and other details
- Sell your products under Walmart’s name
- Sell your DSV products to Walmart at wholesale—not bulk—prices
- Provide product details and an inventory feed
- Ship out orders as they come in, complete with a shipping label paid in full by Walmart
- Send items either directly to the customer or to a Walmart store via the “Ship to Store” option
It’s possible to be both a DSV and a 3P through Walmart, but we recommend starting with one at first. You can’t list the same items through DSV and 3P (it’s against Walmart’s policies and interests), so choose wisely if this is the route you want to take.
Done right, joining the Walmart DSV program can bolster sales and streamline a few annoying parts of the dropshipping process, like shipping. Here are some other perks to be aware of.
- Simplicity: Like a typical wholesale relationship, DSV does not require as much setup or ongoing management as a regular marketplace account does. Walmart assists with marketing your product, handling returns and other aspects of selling, which you’d typically handle completely on your own as a 3P seller.
- Margins: Since your products are purchased wholesale, your margins remain the same no matter how much Walmart marks your prices down. You work with a buyer to schedule any promotions and may instead lower the wholesale cost on those items.
- Shipping costs: Walmart covers the cost of shipping entirely. So, even if they push for 2-day shipping (which has become more or less a requirement of DSV), you don’t have to worry about increased costs. As a DSV, sellers tend to lose some margins with wholesale pricing, but the shipping costs alone tend to make up for that (especially if you sell big, bulky items).
- Buy Box win rate: Walmart prioritizes most DSV products in search results over 3P sellers, so if you want a competitive edge, this is one way to secure it.
- Credibility: Walmart lists your product as “Sold by Walmart,” which may encourage more sales. In addition to this, DSV buyers also handle Walmart’s brick-and-mortar sourcing, so you could potentially be picked up to be part of their in-store inventory.
- Ship to Store: DSV products show customers the “Ship to Store” option, which could potentially boost sales, especially as buy-online-pickup-in-store (BOPIS) is growing in popularity.
That being said, Walmart DSV isn’t right for everyone. If you’re relatively new to dropshipping, have a limited number of warehousing options or can’t handle bulk orders yet, DSV may be a challenge. There are other downsides to consider, like:
- Control: Walmart has ultimate authority over your product pages, listings, carrier (all orders must be shipped via FedEx) and retail pricing, so if you like being in the driver’s seat, this might not be for you. Pricing in particular can get dicey if you’re not careful. Some sellers report losing the buy box on Amazon as a result of their Walmart prices dropping, and channels monitoring for price parity.
- Returns: All returns are liquidated and it’s possible to receive unexpected (potentially hefty) chargebacks for returnless refunds.
- Piecemeal selling: Because Walmart doesn’t buy in bulk from you, you’re taking on more risk as a DSV than with 1P, because you’re paying to store large quantities of items before they sell.
- Getting verified: Walmart takes its reputation seriously, so be prepared for a drawn-out and sticky verification process to join the DSV program. And once you’re in, you’ll need to hit Walmart’s DSV benchmarks to stay in their program.
How to Apply to Become a Walmart DSV
The DSV approval process can admittedly take a while, so buckle up. First, create an account with Walmart to start your DSV application. During the application process, you’ll send over information from Walmart’s DSV checklist. If you can’t meet everything on the checklist, Walmart unfortunately won’t accept you into the DSV program.
Walmart will ask for data like:
- Contact, banking, and tax information
- Product data, to include product names, brand, cost, description, photos and a category for each photo (note: product descriptions should be completely unique to Walmart.com, so don’t copy-paste it from Amazon)
- Legal disclosures and chemical information
You also need to be able to provide customer support via both phone and email to make the cut, as well as ship to customers across North America.
Five Best Practices for Walmart Dropshippers
If you think Walmart DSV is for you, consider these extra tips to avoid making mistakes right out of the gate and to make a good impression on Walmart.
1. Offer 2-day shipping
You don’t have to offer 2-day shipping as a DSV, but if you want any longevity in the program, you really should offer it.
Walmart rolled out enhanced 2-day shipping on most of its items to incentivize orders. If you can make 2-day shipping happen, Walmart says you’ll see a 200% increase in sales.
Once enrolled in the TwoDay program, you can select the regions where you can support 2-day shipping to optimize your shopper experience. To enable fast-shipping across the country, you’ll want to carefully consider your warehouse strategy and consider having multiple warehouses in strategic spots to qualify for 2-day shipping.
Keep in mind that TwoDay requires invitation or approval first. Walmart needs to have enough data and confidence in your shipping operations to give you the green light for 2-day shipping. You’ll also need to manually apply for the program, so make sure you account for that.
2. Check your shipping software
Since you’re shipping on behalf of Walmart, you’ll want to make sure that your shipping software is set up to do so! The last thing you want to do is accidentally send DSV orders under your name instead of Walmart's, and thereby muddy the customer experience or wind up having to pay penalty fees.
As an example, if you’re using Spark Shipping’s automation, you can send orders automatically, accurately route orders and receive tracking updates via UPS or Fedex.
3. Optimize product data
DSVs don’t have as much control over product pages as other sellers, but you can still optimize your data to perform better in product searches. Walmart.com is still a marketplace, after all, and that means you’re competing with other vendors to stand out.
You’ll need to follow Walmart’s Supplier Center standards for product name, description and images as you’re building your listings. While Walmart has the final say on what gets published, you’ll want to spend time optimizing things like:
- Product descriptions: Highlight the most important benefits and features first, taking care to emphasize how the product makes life better for your customer.
- Product name: Give this product a name that’s completely unique to Walmart. Include the brand name, keywords and important features (size, color, etc.) to attract more sales.
- Multimedia: Take multiple high-quality photos from different angles. Show the product in use with lifestyle photos, as well as against a white or black backdrop. Don’t be afraid to add videos or demos, too. The more context you can give, the more likely customers will be to tap “buy.”
- View more Walmart SEO tips
4. Score the Walmart Buy Box
Just like on Amazon, you can score the Buy Box on Walmart by playing nice with the platform’s algorithm. Most of these suggestions are common sense, but the best ways to score the coveted Buy Box include:
- Offering free shipping: This should be a no-brainer if you’re using Walmart DSV, since Walmart supplies shipping for you. But it’s still important for the customer experience.
- Staying in stock: Walmart doesn’t care if you got a sudden surge in sales or if your supplier went offline because of the pandemic. If you go out of stock, it puts your reliability into question, which hurts your chances of getting the Buy Box. Change your order status to Backorder if you don’t have enough inventory to fulfill an order.
- Meeting (and exceeding) delivery deadlines: Do you regularly deliver items late? That’s a big strike against you in Walmart’s eyes. Structure your dropshipping operation to deliver all items on time, and even early, to score a Buy Box feature.
The Buy Box is about being a high-quality vendor. You should be doing all of these things anyway, but know that an issue with product quality or shipping times puts more than customer satisfaction at risk. If you have any quality concerns, fix them now before you join Walmart DSV.
5. Run Walmart Ads
The final best practice is to consider partnering with Walmart Media, Walmart’s advertising platform. If you’ve ever tried Google Ads or Amazon Ads, Walmart Ads are very similar.
It’s important to note that, although you’re selling under the Walmart name, Walmart isn’t necessarily marketing products for you unless it has been planned with your buyer. It’s still partially on you as the DSV to boost traffic to your listings.
DSVs can set up pay-per-click Sponsored Product or Display Ads with Walmart. Sponsored product ads appear on desktop, mobile and the Walmart app to encourage clicks. These are especially helpful if you need to boost sales but aren’t in the Buy Box organically. Display ads only show on Walmart.com, but they do bring customers with relevant traffic to your product listing page.
Read More: A Beginner's Guide to Walmart Advertising (aka Sponsored Products)
Note that you need to set aside a minimum budget for Walmart Ads. Most campaigns have a $1,000 per month minimum, but the more high-end managed media campaigns have a minimum of $25,000. Look at your budget to see if Walmart Ads would be worth the investment.
The Bottom Line
Millions of shoppers and sellers are taking advantage of Walmart.com’s growing platform. While eBay and Amazon certainly deserve a place in your dropshipping strategy, Walmart can be a valuable platform for boosting ecommerce sales.
Remember, calculate the costs carefully. Make sure you can afford wholesale pricing and warehousing logistics before signing up as a DSV. By also following the five best practices above, you can make the most of what Walmart DSV has to offer, boosting sales and creating a profitable dropshipping operation in the process.
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