Will fulfilling third-party vendor orders give Walmart an edge over Amazon?
Walmart is looking to give third-party vendors more reasons to sell on its online marketplace. The retailing giant has launched a new service — Walmart Fulfillment Services (WFS) — that stores, picks, packs and ships items ordered from third parties on walmart.com. In true Walmart fashion, the retailer said its services will be offered at “one of the lowest prices on the market” and sellers will not have to pay a monthly membership fee to participate in the program.
“WFS is designed to help sellers generate more profitable sales of their inventory at scale, while growing their business with Walmart Marketplace,” wrote Jare’ Buckley-Cox, vice president, Walmart Fulfillment Services, Walmart eCommerce, on a company blog. “With WFS, they’ll gain a trusted partner that cares about their business and their customers and benefit from a more personalized experience. And as for customers, they’ll enjoy a larger assortment of great brands and products along with fast shipping, easy returns and dedicated customer service.”
Walmart has signaled that it intends to maintain the integrity of the program for consumers and third-party vendors with its vetting process for program participants. Customers ordering online from these merchants will see a badge that reads, “Sold by (seller), fulfilled by Walmart.
Participants in the program can take advantage of Walmart’s two-day offer, and NextDay delivery is on the way. Walmart will also handle returns and provide customer service for participants in the WFS program.
Walmart is looking to expand its roster of marketplace sellers to compete profitably against Amazon.com and other rivals online. More than half of the revenues generated on Amazon’s marketplace come from third-party sellers, with many paying the e-tailing giant to participate in its Fulfillment by Amazon program.
Amazon currently holds a 38.7 percent share of retail e-commerce sales in the U.S., according to eMarketer. Walmart, the second-largest player in the market, has a 5.3 percent share.
In related Walmart news, the retailer is combining the buying teams for walmart.com and its stores. According to an internal memo obtained by The Wall Street Journal, Walmart will create six category teams, which will be led by a single executive. The plan is for the consumable and food category groups to begin immediately under this structure, with others to follow.
- If You Build It (Together), They Will Come: Walmart Introduces New Fulfillment Service Built with Sellers, for Sellers – Walmart
- Walmart Fulfillment Services – Vimeo
- Walmart Fulfillment Services – Walmart Marketplace
- Walmart to Combine Online and Store Product-Buying Teams – The Wall Street Journal
- Target Cracks Top 10 US Ecommerce Ranking – eMarketer
DISCUSSION QUESTIONS: Will the launch of WFS help Walmart expand its roster of marketplace sellers and, in turn, draw more consumers to walmart.com? What will the launch of WFS mean for rival platforms and third-party providers offering similar services?