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A Retail Giant’s Ecommerce Rise
Over the past few years, Walmart has emerged as a serious contender in the world of e-commerce too, taking on Amazon in the battle for online shoppers. Once known primarily as a brick-and-mortar retailer, Walmart has made significant investments in its online operations, and these efforts are starting to pay off.
Walmart’s foray into e-commerce began in earnest in 2016, when the company acquired Jet.com, an up-and-coming online marketplace, for $3 billion. Since then, Walmart has continued to expand its online offerings, with a particular focus on grocery delivery and pickup. The company has also invested heavily in technology and logistics, building out its supply chain capabilities and rolling out new features like next-day and two-day shipping.
Now it’s seen by many as the only real competitor to Amazon, so it might seem obvious that sellers should expand their operations into the platform as well. However, is it actually the right choice for your business? Here are a few questions that you should ask yourself first.
6 Questions to Ask Before Expanding to Walmart
1. Do you have inventory issues?
When considering expanding your sales channels to include Walmart.com, one important factor to consider is your inventory situation. The first thing you need to check is whether or not you have the merchandise to cover your needs. To be successful on Walmart Marketplace, it is highly recommended to use Walmart Fulfillment Services (WFS), which means you’ll have to keep a sizable amount of inventory in their warehouses.
This can be a double-edged sword. If you have excess inventory that you can’t seem to offload on Amazon, expanding to Walmart.com may be a great fit. However, if you’re tight on inventory and there’s a chance that you might not be able to support the demands of another market, then expanding to Walmart.com probably isn’t right for you.
2. Can you invest heavily in product launches?
Expanding into Walmart will require a significant investment in advertising. While you can maintain product rankings with minimal advertising, it usually takes an aggressive campaign to get new products off the ground. Make sure that you have enough liquidity to invest in Walmart Sponsored Search to drive traffic and sales to your listings during this initial period.
However, it’s important to be prepared for the costs associated with this advertising. At first, you should expect a high TACoS (Total Advertising Cost of Sales) as you aggressively outbid competitors to gain visibility and establish your position on the platform. This can be a significant cost for your business, so make sure that you have enough liquidity to invest in advertising and that you have a strategy for optimizing your campaigns to minimize costs over time.
3. Is expanding to Walmart the best avenue for growth?
There are definitely a lot of upsides to selling on Walmart, but don’t forget about the alternatives! You may see better results from just diversifying your product line on Amazon, spending more heavily on PPC, or even investing into branding efforts such as professional product photography, packaging design, and social media marketing.
Here’s another important factor to consider: whether or not you intend to sell your brand in the future. If you are open to the idea of selling your ecommerce business once it has grown to a respectable size, then having diversified revenue channels can be an excellent selling point.
4. Is your product a good fit for Walmart.com’s customer base?
Walmart.com attracts a slightly different customer demographic than Amazon, with a focus on value and lower-priced items. Before deciding to sell on Walmart.com, consider whether your product is a good fit for this audience. If you sell luxury or high-end items, for example, Walmart.com may not be the best place to reach your target market.
Not only that, Walmart is also known for its fast, low-cost shipping options. Before selling on the platform, evaluate whether you can compete with these offerings while still maintaining profitability. If you can’t offer similar shipping options, it may be difficult to attract customers on Walmart.com.
5. Can your team handle the workload expanding to Walmart?
Selling on Walmart.com requires a separate account and listing process, which can be time-consuming and complex. Additionally, managing inventory and orders across multiple platforms can be challenging. Before expanding to Walmart.com, make sure you have the resources to handle the additional workload.
Alternatively, you can bring in outside help instead. Agencies like SellCord can simplify the process by handling the onboarding for you, while also managing your listings and Walmart Sponsored Search campaigns. If you want to focus more on growing your business rather than the day-to-day tasks, this can be a great option.
6. Are you willing to comply with Walmart.com’s policies and requirements?
Walmart.com has a range of policies and requirements in place to ensure that sellers provide a high-quality customer experience. For example, sellers must provide fast and reliable shipping, with most orders required to be shipped within 2 business days. You’ll also need to provide accurate tracking information and meet strict delivery windows. This can be challenging for some businesses, especially those that rely on third-party logistics providers or have complex fulfillment operations.
In addition to fulfillment requirements, Walmart.com also has strict pricing policies in place to ensure that sellers provide competitive prices to customers. You’ll need to adhere to Walmart.com’s pricing guidelines, which can be different from the pricing strategies you use on Amazon or other platforms. Selling cheaper on one can lead to you losing the Buy Box on the other.
Finally, Walmart.com also has strict customer service requirements, including a requirement that sellers respond to customer inquiries within 24 hours. You’ll need to have a customer service team in place that can handle inquiries and resolve any issues quickly and effectively. The good news is that if you use WFS, they’ll handle customer support and returns for you.
Expanding to Walmart.com as an Amazon seller can be a great opportunity for growth, but it’s important to carefully evaluate your readiness and willingness to meet the challenges involved. By doing so, you can make an informed decision about whether or not this platform is the best avenue for growth for your business.
If you do decide to move forward with selling on Walmart.com, be sure to take the time to set up your account correctly, optimize your listings, and invest in advertising and marketing campaigns to drive sales. With the right approach, expanding to Walmart.com may be just what you need to take your business to the next level.
And if you need any help, SellCord is an agency exclusively focused on Launching and Managing brands on Walmart.com. We work with hundreds of brands across all categories. As a team of experienced sellers ourselves, we gained a deep understanding of what works best on the marketplace and work with brands to help them replicate that same success.
If you’d like to learn more about how we can help your business establish a presence on Walmart.com, get in touch with us today.