When people think about selling products online, the common option is the e-commerce giant Amazon, as it’s the most popular and successful of all online marketplaces.

However, it’s worth noting that the Walmart Marketplace has also gained recognizable traction in the industry, making it a worthwhile option for sellers. In fact, statistics from MarketPlace Pulse reveal that over 94,743 retailers trade on the eCommerce platform, with 5,365 sellers joining in June.

These figures combine to produce approximately $43 billion for the company in 2021, which is several times higher than previous sales made by the company, according to statistica.

If you wish to start an eCommerce business on the Walmart Marketplace and would like more information on the pricing, future revenue, potential risk, and more, here’s a guide to assist you.

Walmart Logo on iPhone in miniature shopping cart
Walmart’s 2021 online sales increased by more than 70 percent in comparison to 2020’s figure.

Reasons to Sell on Walmart

Before presenting how to sell at Walmart alongside other essential information, it’s important to emphasize why becoming a Walmart seller is worth your while. In other words, what advantages does the platform present over giants like Amazon and eBay; fortunately, this section will highlight them below.

A few important benefits include:

1. A Massive Customer Base

Walmart is ideal for targeting a range of buyers in your desired niche as the online marketplace has over 110 million unique monthly visitors, including new customers.

This large virtual crowd saves you a lot of money since you won’t have to spend hundreds of dollars on marketing an online store. Therefore, becoming a seller on Walmart presents your store with a substantial amount of visitors, making breaking even a fast and less tedious process.

2. No Routine Fees

Unlike other eCommerce platforms that charge recurring fees, Walmart employs a “pay whenever you sell” ideology, meaning you don’t have to dedicate money until you make your first sale.

This advantage is beneficial to new online sellers with nothing but a product, a limited budget, and a dream. Opting for services like Amazon attracts costly monthly fees for storing the stocks of your product that’s listed on the Amazon online marketplace.

While this fee isn’t illegal, it is problematic as it impedes a young entrepreneur’s ability to sell, make mistakes, and learn with little financial repercussions.

3. Improved Security

Cyber attacks are a common problem on the internet, making security an essential factor to consider when choosing an online marketplace to sell your products.

Fortunately, Walmart understands the importance of user safety and has enhanced its security so that a customer’s data (whether on a buyer or seller account) remains protected and private throughout transactions.

4. Clear Marketing Reports

When selling online, you need clear insights and metrics to monitor your business’s performance and make adjustments when necessary. Fortunately, Walmart provides these features to its sellers, ensuring they trade efficiently and smartly.

These metrics in the marketplace encourage retailers from different niches to trade their offerings and make changes according to the market. In other words, irrespective of your product, Walmart possesses the necessary tools for success.

5. A Trustworthy and Renowned Brand Name

Branding is essential to business success because the more people validate your business, the more customers will likely trust you. This factor is crucial, and statistics reveal that 81% of customers won’t buy from a brand they don’t trust.

However, building trust with a Shopify store is difficult since it will take months or even years to accomplish with your sales channel, but working with an already validated brand is similar to taking a shortcut. People already purchase from Walmart, and selling in the name of this brand will give you a great advantage.

6. Product Visibility

As previously mentioned, Walmart has over 110 million unique customers that patronize its services frequently, and capitalizing on these numbers raises your chances of reaching your target audience.

The higher chance of servicing more people directly affects your revenue since more patronage translates to increased cash flow for your business. Additionally, Walmart isn’t as populated as eBay or Amazon, meaning fewer people are offering what you sell.

How to Start Selling on Walmart Marketplace

The Walmart Marketplace is designed for individuals who wish to sell their products or services from the comfort of their home, and in order to begin this process, you need to apply and get approved before you can begin selling.

This section will explain every necessary step, from how to apply at Walmart.com alongside their requirements. Read on!

Applying to Sell on Walmart

In order to begin selling on Walmart as an approved retailer, you need to first complete an approval process consisting of five steps; Application, contract, registration, onboarding, and final review.

Begin by visiting the official website of the Walmart marketplace and click on the apply button at the top right corner. The action will redirect you to a page containing the application form, which may take 10 to 15 minutes to complete.

Once completed, click the “Apply Now” button and wait a while for Walmart’s acknowledgment message indicating your application was approved. The message will contain the Walmart Retailer Agreement document, which you need to sign to begin the onboarding process.

Note: It takes roughly two weeks for Walmart to acknowledge your application as their team spends time thoroughly reviewing the submission.

Requirements to Sell on the Walmart Marketplace

Naturally, not everyone gets verified on Walmart as you need to fit specific criteria to qualify as a Walmart Retailer. These items for eligibility include:

  • U.S. registered businesses
  • Applicants must have U.S. addresses for their warehouses alongside the tax ID
  • Proof of merchant fulfillment (MFN)
  • A minimum selling history of one year

Note that failure to meet these requirements and be approved by Walmart prevents you from retrying the application process within the next six months.

Factors That Influence your Application Approval

Not meeting the top criteria for acceptance by Walmart will result in definite rejection; however, other factors also determine if the corporation will accept you to sell on their platform. These additional requirements include:

  • Sales Projections: Walmart analyses your sales history and forecast and decides whether it is worthwhile for you and the company. Additionally, products are assessed alongside their pricing, uniqueness, and current sales.
  • Aligning with Walmart’s Values: It may be unbelievable, but Walmart selects sellers based on their experience, size, reputation, pricing, and customer service track record. This information directly means that the company will review your previous online store to decide whether you qualify to deliver excellent customer service on their platform.
  • Reputation: One of Walmart’s primary requirements is a selling history of one year, as this enables them to assess your reputation and decide whether you should be on the platform. They primarily probe your reputation whether you offered first-class customer service, fulfilled and shipped orders, and provided reliable products. If your details don’t meet Walmart’s requirements, your application will be denied.

Walmart Marketplace Seller Fees

Sellers on different platforms, especially Amazon sellers, are familiar with paying monthly fees to keep their stores running. Luckily, selling on Walmart.com gives you an advantage over retailers on other platforms as there are no annual fees or product listing fees.

The only money charged by Walmart to its sellers is a referral fee. The Walmart Marketplace “referral fee” isn’t a fixed amount as it ranges from 6% – 20% of the product’s gross sales proceeds.

The precise percentage charged on each product’s gross sale depends on the product category. Therefore, to thoroughly understand your potential payments, visit Walmart’s product category to review the fees.

Ultimately, Walmart outshines other eCommerce marketplaces with its absence of monthly or annual fees. This factor is essential for sellers who wish to earn more profit for their business and spend less.

Risks Associated with Selling on the Walmart Marketplace

Naturally, Walmart presents numerous benefits to sellers to increase their earnings and reduce the hassle of succeeding as a vendor. However, these advantages come at a price that may be detrimental or neutral, depending on your goals. This factor is a frequently asked question (FAQ) by aspiring sellers and this section will attend to it.

Below are some Cons associated with selling on Walmart.com:

1. Strict Price Requirements

One of Walmart’s business goals is to offer its product catalog at the lowest price possible. This mission requires brands and sellers to set prices for their goods within a set price range dictated by Walmart.

In other words, your earnings will always be within the Price Parity Rule and Price Leadership Rule of Walmart. Fortunately, these rules aren’t ridiculous or unrealistic, meaning sellers can still make a substantial profit from their offerings.

2. Possible Listing Issues

Sellers on Walmart may encounter issues while listing their offering on the Walmart Marketplace since the retailer operates on a first-come, first-serve system. In other words, sellers who first upload a specific product to the platform are prioritized over vendors with similar products.

Unfortunately, the only way to beat the original seller and get less competition is to offer a lower price, promoting the Walmart algorithm to prioritize your offering.

3. Lower Profit Margins

Due to Walmart’s EDLP (Everyday Low Price) guarantee, brands and sellers must reduce their prices on Walmart to operate within its rules. Although this lower price rate is met with an influx of purchases, the result is a lower profit margin compared to what’s possible.

As previously mentioned, Walmart will remove listings with higher price tags than the same product on other marketplaces.

4. Limited Fulfillment Services

Previously, Walmart required third-party sellers to store, fulfill, and ship their products to customers immediately. This requirement extends to the seller handling the customer service and returns, which puts more strain on the entrepreneur.

Fortunately, Walmart, the solution provider, released its Walmart Fulfillment Services in 2020 – similar to Amazon’s FBA shipping program – which takes care of fulfillment, shipping, returns, and customer support on behalf of eligible sellers.

However, brands and sellers that do not qualify for the Walmart Fulfillment service must handle that aspect independently with other shipping options and shipping rates.

Walmart’s success doesn’t compare to Amazon yet; that’s why aspiring sellers need to consider all. Factors associated with partnering with the platform. The risks presented above are sufficient to understand better what to expect as a Walmart Retailer.

Payoneer App with Stationery on a Brown Wooden Table
Payoneer’s support team has 320 employees who support 4 million customers in 70 languages, operating in 150 different currencies.

How Sellers are Paid on Walmart

While Amazon pays its sellers through Automated Clearing House (ACH) or electronic funds transfer that sends the money directly to their bank account, Walmart uses a different method, Payoneer.

Walmart has partnered with Payoneer to handle all payments on its marketplace, thereby requiring every seller to create an account with Payoneer to receive the payments.

Before creating a new Payoneer account, it’s important to note these few points:

  • The registration process begins at the Seller Center and ends on the official Payoneer website.
  • Only users with admin access can view and manage the seller’s financial settings.
  • Your seller funds will be transferred directly to your bank account after selecting Payoneer bank transfer service as your payment method on Walmart.
  • The money transfers have no Payoneer fees linked to them.
  • Registering with Payoneer directly instead of via Walmart’s seller center will result in you being charged $1.50 while withdrawing funds.

Dropshipping with Walmart

With Walmart rising above other online platforms and approaching the eCommerce giant Amazon, many sellers have wondered about dropshipping on the marketplace.

Dropshipping is an order fulfillment strategy that doesn’t require the seller to keep products in stock. Instead, the seller uploads details of the product and passes the order and customer details from the checkout to a third-party supplier who proceeds to ship the product to the customer.

While dropshipping is permitted on Walmart, executing the process is tricky as many rules and regulations govern it. For example, one cannot purchase an item from Walmart and resell it at a higher price on the same platform; it is against the terms of use.

Other sellers opt for more strategic options by opening an online store on Shopify or Etsy and sell products from Walmart. This method seems lucrative due to Walmart’s low prices; however, Walmart dislikes this approach and will cancel your product immediately if it realizes your goal.

Luckily, professional drop shippers can still perform business with Walmart but under the presented options. These options include:

  • Dropship on Walmart’s marketplace: Walmart permits dropshipping with platforms like Alibaba or Aliexpress, where you upload products from the site to your Walmart store and have Alibaba fulfill the order. Note that dropshipping on Walmart is fine, but dropshipping from Walmart is not permitted by the corporation.
  • Buy an Item for Resale: Unlike using another seller to fulfill orders, Walmart permits shipping items to yourself then transferring them to other customers – a method commonly known as arbitrage. In other words, you buy what your customer desires from another retailer, wait until it gets to your location, then ship it to the individual. Keep in mind this method will affect your delivery time, making 2-day shipping impossible.
  • Become a Walmart Supplier or Dropship Vendor (DSV): The Walmart Marketplace has a B2B program where suppliers can sell products to Walmart for Resale. Manufacturers and wholesalers often occupy this position, but dropshippers qualify as well, making them one of its largest retailers. You can choose to either ship the products to Walmart’s warehouse or directly to the customer through the DSV program.

In Summary

Ultimately, Walmart is growing rapidly as current statistics reveal it received more patronage in 2021 than previous years due to high customer engagement. This fast-paced growth is worthwhile for potential sellers as it enables them to reach their target audience efficiently and even offer sponsored products.

Besides the promise of high customer engagement, Walmart also maximizes your earnings as a seller by eliminating unnecessary fees charged by other marketplaces like Amazon. Essentially, brands and sellers can list and sell their offerings without paying a monthly or annual fee, making it ideal for test orders.

The Walmart Marketplace is worthwhile for the enthusiastic businessman as it presents numerous benefits and ways to make a profit.