It’s no secret that Amazon and Walmart are direct competitors, and that competition is heating up with the newest offering: Walmart Fulfillment Services (WFS). This service provides online sellers with an alternative to Amazon’s popular Fulfillment by Amazon (FBA) program.
If you’re wondering how the two compare or how you can get involved with fulfillment by Walmart, read on to learn more about this new program and how it stacks up against Amazon.
Program Basics
Walmart has long been a retail powerhouse and its success with e-commerce is backed by a vast supply chain capability boasting state-of-the-art warehouses and technology. In the past, these services were limited to the retailer itself, but now select marketplace sellers can also utilize the services to help their business grow.
The company offers to help you focus on your sales while they take care of everything behind the scenes. Whether it’s fast shipping to your customers or quick and easy returns, the Walmart fulfillment program offers to handle it all for you.
In addition to shipping and returns, the service will also help you take care of customer service-related aspects, saving you precious time and resources. All you need to do is send your inventory directly to one of Walmart’s fulfillment centers and they’ll store your items safely and securely.
How it Works
If you currently have a lot of inventory to sell, the program makes the entire transaction from purchase to delivery easier for you. You’ll start by sending your products directly to a Walmart fulfillment center where the items will be stored and ready to ship after an order is placed.
A perk to this service is that your items include guaranteed two-day delivery, which means your customers get their purchase fast and will likely come back for more. As a member of Walmart fulfillment services, you’ll be able to edit and control your online product pages. You can change item descriptions and photos as needed, which results in better conversations for you.
When you ship your items to Walmart, you’ll have access to an inventory management system so you can determine what items are selling and which ones aren’t. Walmart call center associates are assigned to this program to provide you with support whenever you need it. You will also get custom recommendations from an account manager who can make suggestions to help your business grow.
Walmart’s customer service will handle all of your customer inquiries, process refunds, and take returns for all of your orders. As for pricing, you’ll enjoy a simple cost structure with a fixed monthly storage fee. A fulfillment price is also charged per month based on the shipping weight of your products.
What’s Eligible for Walmart Fulfillment Services
Depending on the items you plan to sell, you may be a good candidate for Walmart Fulfillment Services. Your products must be shipped to a Walmart fulfillment center from and to a location within the United States.
You cannot sell perishable or regulated products, and the maximum product weight of each item must be no more than 30 pounds. All product dimensions have a size limit of 25″ x 20″ x 14″, so check your items carefully before shipping them.
To apply, you’ll need to complete the online Marketplace Application. The application process should only take about 10-15 minutes, but there are a few things you should have ready when applying:
- Your US Business Tax ID (Walmart will not accept social security numbers)
- Your W9 or W8 and EIN Verification Letter. This letter comes from the US Department of Treasury and verifies that your current business address or physical operations are located within the US
- Your United States business address
- A planned integration method for your catalog, which could be something like a bulk upload, solution provider, or API
- The primary categories of your products which should include the total SKUs you plan to sell along with verified UPC information and whether or not your items are new, used, or refurbished
Competing with Amazon
For years, Amazon’s FBA program has been the premier place for business owners to sell their products online. As the e-commerce landscape changes, Walmart has decided to get into the game, offering sellers a new venue to get more sales and conversions.
Amazon’s fast Prime shipping has been a lure for customers for a long time, but Walmart’s two-day shipping is quickly catching up and leading the way. The appeal for customers using Walmart is that there’s no charge for two-day shipping, while Amazon Prime charges an annual service fee.
On the other hand, a perk of Amazon’s Prime benefits is that there is no minimum purchase. At Walmart, customers must purchase a minimum of $35 online in order to get the fast two-day shipping guarantee.
While Amazon ships from its warehouses scattered across the US and require returns by mail, Walmart is offering customers the option to return items in-store. This allows customers to receive refunds faster, and it also brings Walmart more revenue since they’re likely to make another purchase while they are already at the retail location.
Currently, Walmart has tens of thousands of sellers, while Amazon’s number is into the millions. This provides a benefit to sellers since their products won’t be in such an overcrowded marketplace like they are with Amazon FBA.
When you post a product using Walmart WFS, you’ll qualify for their TwoDay tags. This tag allows customers to filter products based on shipping speed, bringing your items up in the search ranks on their website. Better search rankings result in better visibility, more sales, and higher profit margins.
Comparing Services
It’s clear that the new Walmart Fulfillment Service is competing with Amazon to gain a new base of online sellers. With that said, how do the two programs stack up? Each service has its own set of pros and cons, which might help you determine which option is right for you.
The Benefits of Walmart WFS
In terms of size, Walmart currently has over 4,750 stores and 20 fulfillment centers. Amazon has a larger footprint when it comes to online-only distribution, coming in at a total of 110 fulfillment centers throughout North America. However, on a global scale, Walmart is the winner with thousands of fulfillment centers worldwide, and Amazon with just 175 globally.
Customers may return their products from Walmart’s online marketplace in-store or by mail. Kohl’s and Whole Foods have teamed up with Amazon to allow customer returns, and of course, returns via mail are also included.
Shipping is fast for Walmart as long as customers spend $35 or more. They’ll get two-day shipping with no added fees. Amazon Prime services ship products free, but customers must pay an annual fee for Prime membership.
Walmart currently only fulfills items sold on Walmart.com. Amazon has multi-channel fulfillment, which means that sellers’ products are distributed across many marketplaces and not just directly from Amazon.
When it comes to customer satisfaction, Walmart’s WFS program keeps seller’s items separate from other merchants’ inventory by default. This reduces overhead costs, the potential for fraud, and mislabeling as well as the potential for damaged items that come from a mixed pool of products.
The Benefits of Amazon FBA
Walmart certainly has a role to play in the new e-commerce landscape. However, Amazon’s long-standing online has created a feeling of trust among customers looking for quality products and fast delivery.
This sense of trust endures today, and Amazon.com is one of the first places most online shoppers turn to buy everything from electronics to clothing and home decor. The FBA sellers have access to the company’s Prime audience, and they’ll have the Prime logo tagged on their products.
As an Amazon FBA seller, you’ll also have access to the popular Amazon Prime deals. that means you’ll reach over 100 million members, which can boost brand recognition and awareness. On the other hand, the Amazon marketplace is getting crowded and it can be difficult to stand out without the right marketing plan.
Fulfilling Your Business Goals
Now that you know more about Walmart Fulfillment Services, you can decide how they stack up against Amazon FBA in terms of your own business plan. Compare the benefits and drawbacks of each to help you determine which program is right for you.
If you’re just starting out selling your products online, the fulfillment by Walmart service might be a great option. In addition to storing your products, Walmart handles shipping, returns, and customer service so you can stay focused on your business.
If you need e-commerce solutions for your business and need help with your WFS game plan, contact us today so we can help you succeed.
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