What Is WFS?
In February 2020, Walmart premiered Walmart Fulfillment Service (WFS), a program intended to give Walmart Marketplace sellers access to its “world-class” supply chain—and a direct alternative to Fulfillment by Amazon (FBA).
Walmart, after all, bans the use of FBA by marketplace sellers and has never been more eager to go head-to-head against Amazon. As it posts record-shattering growth in ecommerce, WFS is proving to be yet another smart, tactical jab at the long-time incumbent.
Since its launch six months ago, WFS has been met with resounding praise among those who've adopted it. WFS sellers have experienced upwards of 60% more gross merchandise volume (GMV) in just one month and have enjoyed a significantly easier time fulfilling orders at speed, according to Walmart.
“In the first six months, demand [for WFS] has exceeded our expectations,” says Director of Walmart Fulfillment Services Erin Temchin in Zentail's Ask Walmart Anything masterclass. She adds that the team plans on opening even more WFS fulfillment centers and capabilities soon. The end goal is to provide a premium experience for 3P sellers and to help them generate more profitable sales, while simultaneously providing a premium experience for buyers who are seeking fast, reliable delivery.
How Does WFS Work?
Just like FBA, WFS gives you the ability to store your inventory at a WFS-designated fulfillment center. Currently, sellers are responsible for preparing and sending their own inventory to Walmart, but Walmart will soon be expanding its services to include inbound capabilities.
Once a customer places an order through Walmart.com, Walmart will pick, pack and ship items on your behalf, eliminating logistical headaches.
Walmart additionally assumes ownership of all post-sale processes, like returns and customer service calls, on WFS orders. You can participate in Walmart’s Free & Easy Returns program, too, allowing customers to make returns in-store or by mail.
Key Benefits for Sellers
National TwoDay Delivery
One of the biggest perks of WFS outside of convenience is the ability to offer fast shipping across the entire country. Thanks to Walmart’s massive supply chain built over the course of 60 years and its reach (90% of the country is said to be within 15 miles of a physical Walmart store), you can guarantee two-day delivery to 100% of the continental U.S.
WFS sellers tend to win the Buy Box more often as a result of having faster, more reliable shipping. As an early enrollee in WFS, Axon saw a huge jump of 25,000 bps in their Buy Box win rate and a 305% lift in their GMV, according to Temchin.
WFS items also get “2-day deliver” tags added to their listings, and a "Sold by seller, fulfilled by Walmart" stamp, boosting their organic rankings and customer confidence during checkout.
Lower Fulfillment Costs
By taking advantage of Walmart's large-sale supply chain, sellers can offload a significant portion of their logistical costs in exchange for a monthly fee. Those savings allow sellers to reinvest that money into their product and increase their assortment, or pass the discount directly to their customers. This is the key factor behind the incredible GMV growth that WFS participants are experiencing.
History shows that relying too much on FBA can put your business at risk. For instance, when the COVID-19 pandemic first broke out, Amazon temporarily froze FBA shipments on non-essential items, putting thousands of sellers at critical risk overnight. Even items that remained active on FBA experienced major shipping delays, and orders on non-FBA (as well as sales off Amazon and on Walmart) shot up. WFS gives you a powerful alternative to FBA and ensures that the health of your multichannel sales don’t hinge on one service.
WFS Eligibility Requirements
Walmart Fulfillment Services is only available to vendors who are already selling on Walmart Marketplace. It is slowly being rolled out even among marketplace sellers; those who've been with the marketplace the longest and/or bring in a large volume of sales currently have preference regarding enrollment.
WFS requires an applications (accessible via Seller Center) that checks that:
- You are already a Marketplace seller in good standing
- You have a Marketplace ID
Once your account is reviewed and approved, you will have to register each item you intend to stock with Walmart's fulfillment center before sending them and formally completing your enrollment.
While enrollment is limited, Temchin says that her team is working to onboard as many sellers as possible leading up to the holiday season, and plan to roll out additional training and resources to make onboarding even easier.
WFS vs. FBA
Of course, as you’re evaluating WFS, you probably want to know how it compares to FBA.
“I would say [WFS] is quite similar to what you’re experiencing with FBA,” says Temchin, though unlike Amazon, Walmart offers a dedicated support team for WFS. This translates to more direct, helpful support on any WFS inquiries.
Beyond this, WFS offers free two-day shipping on orders $35 and up (no membership required), whereas FBA reserves free same-day, one-day and two-day options for Prime members dependent on region. WFS returns can be made at any Walmart retail location; FBA lets you return purchases to Whole Foods or Kohls. By nature of having more physical locations than Kohls and Whole Foods combined, Walmart gives your customers more post-sale options than FBA.
By default, WFS also stores your wares apart from other merchants’ at its warehouse to avoid fraud. Amazon, on the other hand, commingles inventory unless you manually opt out of it. This has caused issues for some sellers in the past, when counterfeit or poor-quality goods get mixed in with their products and are sent when they win the buy box (in the worst of scenarios, these sellers are unfairly suspended for allegedly offering a counterfeit good).
Another important distinction: WFS only processes orders for Walmart Marketplace. FBA expands its services to sales off Amazon through its optional MCF program. WFS has the advantage of a more streamlined service with a better seller to employee ratio.
What is the pricing structure like?
WFS's pricing structure is simple. WFS charges by shipping weight or dimensional weight, whichever measurement is greater, and there are no additional stocking fees. Pricing starts at $3.40 for items under a pound and goes up from there, dependent on your item's weight.
Storage fees are simple, too. WFS charges $0.75 per cubic foot of storage space per month. All fees are laid out in your Marketplace account so that there are never any surprises.
What do I have to do to enroll?
Enrollment in the WFS program is simple. You have to be a registered Marketplace seller already, and your account must be in good standing. All you have to do is supply your marketplace ID, then use the application link on your Marketplace dashboard to initiate the process. Your application is then subject to review by Walmart. Note that any items that you want to enroll for WFS must be set up on the Marketplace too.
Are there any restrictions on the items I can sell through WFS?
Items are currently limited to what Walmart deems "sortable." That means that your products must be under 30 lbs. and have dimensions no bigger than 25"x20"x14". There are plans to launch a new pilot for non-sortable items (30-60 lbs.) this holiday season.
You may ship chemicals as long as they are not fully regulated. For instance, items like shampoos, vitamins and even lithium ion batteries are OK, but fully regulated items like motor oil or industrial pool cleaners are not.
You cannot ship fully perishable items that require temperature controls, but food items with a longer shelf life are OK.
What are the benefits of enrolling?
Sellers that participate in the WFS program gain access to Walmart's world-class supply chain. With WFS, you are able to offload a significant amount of logistical work, like storage, shipping, and post-sale processes, allowing you to focus on your core business. You can offer your customers free two-day shipping and the strength and security of the Walmart brand. Through WFS, you will realize cost savings and increased efficiency.
Where are WFS fulfillment centers located?
Right now there is only one Walmart fulfillment center designated for the program. The center, known as KY-1, is located just outside of Louisville, Kentucky. However, the incredible response that WFS has received has propelled the program forward. WFS plans to open a second fulfillment center in Kansas City, Missouri, called KS-1, prior to the 2020 holiday season.
What happens to any returned items and who’s held responsible?
Returned WFS items are received by Walmart’s fulfillment center. You can then decide whether to resell or remove the items from your inventory (removals come with a small fee). Shipping costs for returned items are covered by you, the seller, unless the return reason is related to fulfillment or shipping. Anything like delayed shipping or damaged items will be covered by Walmart.