Walmart has been a juggernaut retailer for as long as we can remember, but its recent efforts to leverage omnichannel capabilities and lean into online sales through the pandemic puts it in direct competition with the Amazon marketplace. Walmart’s pickup, shipping, and return policies are not just taking pages out of Amazon’s book. They are improving their processes to make transactions easier and almost instantaneous. After all, when you make over $11.6 billion in annual profits, you can afford to innovate.
Inside the Walmart Marketplace
Just last year, Walmart started offering fulfillment services for its sellers through Walmart Marketplace, which mirrors what Amazon has been doing for years. They have also begun offering advertising for sellers on walmart.com. While Amazon offers Prime and Fulfilled by Amazon, Walmart now has 2-day free shipping and Walmart Fulfillment Services.
Part of the appeal of the marketplace lies in the profitability of third-party sellers paying a fee for their items to be listed and covering the actual delivery costs of the products. Walmart is making it more attractive to sell on its marketplace by taking less commission than Amazon — up to 20% versus Amazon’s cap of 45%.
Clear and Present Growing Pains
However, in its effort to drive rapid growth, Walmart is not upholding its restrictions and qualifications processes. For example, Walmart used to require all third party sellers to be registered in the United States and to pass through a vetting process before selling their products through walmart.com. However, these requirements are already shifting. The service is opening up outside of the U.S. by invitation only, but this cracked door will lead to wide entry through which stealthy rogue sellers will come streaming through.
The Writing on the Walmart Walls for Brands
If you’re concerned about Walmart’s ability to support your brand’s reputation and to protect consumers, you are not alone. Third party sellers that have been using Walmart are already concerned. One Las Vegas seller recently observed, “This is alarming and will end up with Walmart having similar counterfeit or quality issues like Amazon is having.”
A skincare and supplement retailer on both Amazon and Walmart said, “A year or two ago, every brand on Walmart.com would be trustworthy but now it’s getting very similar to Amazon and that’s a huge risk. Amazon let everyone under the sun in – that helped them grow, but now they’re trying to clean up the riff-raff and it’s very hard to close Pandora’s Box.”
We’ve seen this game play itself out before, and some of these potential snags include:
Sellers dropping below price thresholds put in place by Walmart
Inconsistent enforcement of seller rules
Poorly optimized product search
What does all of this actually mean for brands? The rapid rise in third party seller activity can cause channel disruptions, erode the customer experience, and in turn, damage brand consistency and reputation.
Walmart is not Amazon. The players here are different. But the most effective plays for a brand to come out ahead are still the same. Gray Falkon’s playbook works:
Leverage marketplace policies.
Walmart might have different sellers rules and channels for engaging sellers in the marketplace, but the end result is exactly the same. Gray Falkon acts quickly and wins. Read a few of our case studies to see how.
Ready win in the Walmart Marketplace? Contact Gray Falkon today. We’ll solve 50% of the problem in less than 30 days.
About the Author
Trajan Bayly, CEO of Gray Falkon, is an award-winning innovator across multiple industries, including e-commerce, technology, health, and finance. As a 20-year business veteran and recognized expert in market strategy, innovation, and artificial intelligence (AI) technology, Trajan’s leadership experience spans a wide spectrum, from startup technology companies to large, global organizations like Ernst & Young and General Electric. He earned his MBA at The Fuqua School of Business at Duke University.
If you are interested in learning more about him and the Gray Falkon team visit their About Us page here.