With nearly 100 million unique monthly visitors and more than 100,000 third-party sellers, Walmart and Walmart.com have quickly jumped to the top of every Amazon seller’s radar.
For that reason, many ecommerce sellers are now weighing the pros and cons of selling on Walmart vs. selling on Amazon. While Walmart represents an enormous opportunity for budding Amazon sellers, Walmart Fulfillment Services also presents several key concerns.
In this article, we’ll take a closer look at the different advantages, challenges, and approaches to Walmart fulfillment so you can decide for yourself if it’s the right fit for your ecommerce store.
What is Walmart Fulfillment Services (WFS)?
Walmart Fulfillment Services (WFS) supports end-to-end fulfillment for third-party sellers. Using WFS, business owners can store all their inventory within the Walmart fulfillment network — which has distribution centers strategically located across the contiguous United States.
Whenever a customer places an order on Walmart.com, the WFS team will then pick, pack, and ship orders on the seller's behalf. In addition, Walmart handles all customer support inquiries, and allows free and easy returns for any online orders shipped with WFS.
Over the last few years, WFS has grown increasingly popular among ecommerce sellers of all sizes. Because Walmart oversees one of the largest supply chain operations in the world, they’re in a unique position to offer the low-cost, high-quality service retailers need to scale their business (and boost profitability at the very same time).
Walmart fulfillment challenges
Almost all full-time sellers are aware that Amazon removed its brand-neutral packaging for multichannel orders from their Amazon FBA service last fall. In response to this change, Walmart then banned sellers from using FBA to fulfill Walmart U.S. orders.
This situation has presented an enormous challenge for ecommerce businesses who have all their inventory in FBA. What was once a simple transition to sell on multiple marketplaces has become a major project requiring a separate Walmart supply chain and fulfillment solution.
As a result, most sellers resorted to fulfilling orders from their own office or warehouse — which has led to missed service-level agreements (SLAs), slower shipping times, and lower ratings.
In fact, Marketplace Pulse conducted a study comparing the average customer ratings of the top 100 Amazon sellers with the top 100 Walmart sellers. While the top Amazon sellers boasted an average rating of 4.9 out of 5, Walmart marketplace sellers averaged a rating of 3.9 out of 5.
Marketplace Pulse then ran a sentiment analysis focused on poor Walmart reviews. They found that the majority of reviewers were complaining about shipping issues, namely that their orders took too long to ship and/or that returns came at an extra cost.
Other insights from this analysis showed that the top stores on Amazon’s seller center are either using Amazon FBA with 2-day shipping, or they’ve perfected their own shipping methods. The top sellers from Walmart, on the other hand, had to deal with fulfillment workflows on their own.
Benefits of Walmart fulfillment
While the lack of FBA has created a major setback for Walmart ecommerce — as well as a negative customer experience — some brands have managed to capitalize on this opportunity. More specifically, it’s created a unique landscape where sellers with a powerful fulfillment network have an edge over winning the buy box (that they never would’ve had in Amazon).
Take a typical Amazon dashboard (shown below), where everyone is using FBA. When every seller offers Amazon Prime eligibility, fast shipping, and bears the same FBA fulfillment costs, eventually all sellers are going to undercut one another by $.01 until any margin is eroded.
Now, if you look at this popular listing on Walmart (shown below), you’ll observe a much different outcome. The winning seller, etailz, is offering faster shipping than the next best seller by more than 4 days. In addition, etailz is also winning on price — which could potentially be attributed to their lower fulfillment costs.
Simply put, there are two key factors that determine Walmart’s buy box prominence: (1) landed cost (i.e. item value + shipping) and (2) delivery date. By implementing a reliable fulfillment solution, sellers can win the buy box on Walmart at a much higher margin than on Amazon.
Leveraging WFS as part of an Omnichannel Approach
Omnichannel is a multichannel approach to retail that provides consumers with a seamless experience whether they’re shopping online (from a desktop or mobile device) or in-person at a brick-and-mortar store. The beauty of omnichannel retail is that it supports consistent messaging and visuals across all platforms and selling channels. This consistency not only helps with brand recognition, but it does a lot for customer acquisition/retention, as well.
Fortunately, Walmart has managed to include omnichannel capabilities within its fulfillment services. A great example of this comes from Walmart’s Free & Easy Returns program. With this policy, customers can conveniently return items (for free) by mail, with a scheduled pickup from home, or at one of Walmart’s many retail store locations.
What’s more, this return system is complimented quite well by Walmart’s buy online, pick up in store option. With this expanded accessibility — i.e. offering customers a streamlined experience however they choose to shop — WFS has made omnichannel retail a full-fledged reality. This is great news for ecommerce sellers aiming to reach a wider audience, and for those who want to connect with customers in as many places as they can.
How to Increase Fulfillment with WFS
Not only will fast and predictable fulfillment help sellers win the buy box on Walmart, but it’ll also help their products get noticed. The following bullet points comprise the best practices for gaining better search rankings on Walmart.com:
- Optimize item descriptions
- Practice competitive pricing
- Achieve and maintain positive reviews and ratings
- Achieve greater than 99% on-time shipment rate
- Unit and sales cancellation rate less than 1.5%
Quick, reliable, and cost-effective fulfillment can help you achieve each of these goals — apart from content optimization — and can get Walmart sellers noticed in a big way.
For a more in-depth look at the Walmart marketplace (especially how it’s changed over the last two years), you can dig into this article Extensiv previously posted in the spring of 2020.
While it goes without saying that the pandemic has had a massive impact on Walmart and WFS, there’s still much to be gleaned from looking at how far this platform has come. In many ways, WFS has remained “a game changer in the race to deliver the best and most consistent customer shopping experience” to this day.
There’s no doubt it’s in the seller’s best interest to leverage a fast, predictable, and cost-effective fulfillment solution for their Walmart store. In doing so, they’re likely to see an increase in traffic, a renewed interest in their product catalog, and ultimately, a higher rate of customer acquisition (and retention).
Feel free to check out Extensiv Order Manager if you’re looking for a reliable, multichannel partner for your brand. With Extensiv Order Manager, you can quickly propel your ecommerce business on new, high-growth marketplaces like Walmart (and beyond).