Increase revenue selling on Walmart Marketplace
On June 15th, 2020, Walmart announced a partnership with Shopify to open Walmart Marketplace. Walmart Marketplace is a new platform for third-party sellers. So far, Walmart has achieved 74% growth in the eCommerce space.
This new marketplace positions Walmart to compete with Amazon, one of the largest eCommerce giants in the world. Amazon currently owns 50% of the eCommerce market, enabling it to dominate the industry effectively.
With only a year of experience under its belt, Walmart still has a lot of growth potential. Now is the time to become a seller on this online marketplace. It’s also a good time to read up on how you can win the buy box on Walmart.
If you want to remain competitive as an eCommerce seller, having multiple platforms in which you sell is vital. If you are seeking to expand into a new marketplace, Walmart is an excellent option. Below, we’ll provide you with a Walmart growth strategy you can use for your small business.
- What You Need To Know Before Joining Walmart Marketplace
- How To Join Walmart Marketplace
- Walmart Online Sales Growth – What Items Can I Sell?
- How Much Will Walmart Take of Your Profit?
- Walmart Fulfillment Services – How it Helps Your Walmart Growth Strategy
- Familiarizing Yourself With Walmart Seller Central
- Walmart Product Strategy – What is Walmart Product Optimization?
- Walmart Growth Strategy – How To Provide Good Quality Support
- Understanding Analytics and Building Trust
- Final Thoughts
What You Need To Know Before Joining Walmart Marketplace
- How to complete a marketplace application
- Which products Walmart approves of
- How much Walmart fees will take from your profit margin
- Whether or not it’s worth paying for Walmart Fulfillment Services (WFS)
In this article, we will discuss each of these in further detail.
How To Join Walmart Marketplace
First, it’s important to note that this online selling platform is only for US businesses. However, they are increasing their global impact on those who work in the US. You can read more about the differences between selling on Walmart and Amazon here.
Second, Walmart requires that you have a registered business. So if you are expecting to waltz in as someone off the street, you’ll need proof of your business registration.
To make Walmart Marketplaces sales, you’ll need these required documents on hand:
- A US Tax ID (EIN)
- Your W8 or W9
- An EIN Verification Letter from the Department of Treasury (DOT) verifying your business address
- An integration method for uploading your product list
You’ll also need the following data on your products:
- Product categories
- Catalog size
- Total SKUs (Stock Keeping Units to identify your inventory)
- Other UPC (Universal Product Code) Information
For more information on different integration methods, check out our other article on Walmart product optimization, an essential part of your Walmart sales strategy.
Walmart Online Sales Growth – What Items Can I Sell?
Prohibited items include the following:
- Alcohol (or non-alcoholic wine or beer)
- Natural fur products
- Bear traps
- Unauthorized reproductions of artwork
- Artifacts, fossils, or sacred items
- Collectibles with autographs
- Used items
- Cosmetics needing prescriptions
- Currency or gold bullion
- Digital goods and software
- Drugs & medical devices
- Devices requiring FCC authorization
- Most food items
- Funeral items
- Fireworks, explosives, or chemical items
- Padded baby crib bumpers or liners
- Infant neck floats
- Jewelry that does not comply with the Kimberly Process Certification
- Native American products that a recognized tribe artisan did not make
- Offensive products
- Plants subject to state or federal restrictions
- Tobacco products
- Age-restricted items
- Weapons (including airsoft, BB guns, or paintball guns)
- Non-projectile weapons (axes, knives, machetes)
- Police & military-grade products (i.e. – bulletproof gear)
- Solar eclipse glasses
For a complete list of prohibited products, check out Walmart’s Prohibited Products Policy page. When selecting a Walmart product strategy, choose your products with this reference in mind.
If you already sell on Amazon, then you already have a product list available. If not, you’ll want to follow many of the same guidelines for Amazon’s new sellers.
- These items should be light and easy to ship to save money
- Limit yourself to everyday items
- Seek out products based on the latest trends (Google Trends, Amazon Trend Report)
- These items should not contain mechanical elements because they break easily
- Sell items from your brand. You can learn more about private label product selling in this article
Walmart has millions of customers and more sellers joining every day. While you should get started quickly, you should also be careful in your strategy.
Selling on Walmart should be attempted by experienced sellers. If you are a beginner, you may want to first sell on Amazon, as it offers a much more user-friendly environment.
How Much Will Walmart Take of Your Profit?
An awareness of Walmart’s referral fees is necessary when creating your listings. A referral fee percentage is applied depending on your chosen product category.
Here are some of the most popular products based on low referral fees:
These referral rates need to be taken into consideration alongside your other essential expenses. These expenses include advertising, logistics, and warehousing costs.
Much like Amazon, Walmart also has its way of absorbing your logistics costs with the Walmart Fulfillment Program.
Walmart Fulfillment Services – How it Helps Your Walmart Growth Strategy
Walmart’s product strategy is enabling Walmart to handle its logistics. Walmart Marketplace sales potentially increase when you are willing to provide Walmart with your stock.
Like Amazon, Walmart has a robust delivery network to deliver most products within three days.
Walmart typically adds $1.50 per cubic foot for peak storage and a standard $0.75 per cubic foot charge. However, you’ll also need to pay for weight if that is a factor in your items.
Walmart provides customer support to your products if you apply to WFS. So this is great if you have a small team of individuals that specialize in acquiring merchandise. A big part of potential Walmart sales growth comes from a willingness to recognize what your company needs.
Familiarizing Yourself With Walmart Seller Central
The next part of any Walmart online sales growth strategy leads back to familiarize yourself with their platform. The Seller Central dashboard (seen above is broken down into three major sections:
- Items & Inventory – Provides you the ability to manage things, check on your feed status, inventory updates, and price updates.
- Order Management – Provides you with updates on orders, returns, and disputes.
- Analytics – Provides you with updates on the comprehensive analytics and performance of your stock.
Part three will pay particular attention to analytics. For now, this section is a reminder to understand and utilize your resources.
For this section of your Walmart sales strategy, you must focus on the following areas:
- Practicing good Walmart Optimization
- Providing good quality customer service
- Practicing good inventory management habits
- Taking advantage of shipping templates
If you want to increase your Walmart Marketplace sales, you’ll need to follow all three. Here are some strategies related to these three basics:
Walmart Product Strategy – What is Walmart Product Optimization?
For an in-depth guide to Walmart Product Optimization tips and tricks, check out our open Walmartrelated article. For the shorthand version to improve your Walmart sales growth, keep reading.
Walmart Product Optimization involves ensuring your product listing meets (or exceeds) Walmart’s standards for a good quality listing. You will need to provide a solid product description, offering a concise (and detailed) product title, and use high-quality images.
You’ll find the ability to modify your product description and images under the “manage items” or “add new items” under the left-hand navigation menu. It’s essential to have a primary target keyword in the title and multiple secondary keywords in your description.
Do not use a keyword more than twice (unless deemed appropriate). Walmart will penalize you for keyword stuffing.
Under image requirements, ensure your primary image is shown on a white background and contains only your product. Doing so will eliminate confusion and prevents Walmart from removing your listing because of image quality issues.
The dashboard up top contains a section devoted to product errors. If you have something to fix, you’ll see a red number one (or more) on the main page of your dashboard.
It’s essential to fix errors so you can avoid losing product rankings. You can also use a product listing optimization tool to make sure you are following all the best practices for optimizing your product listings.
Walmart Growth Strategy – How To Provide Good Quality Support
Those who run an Amazon storefront already have a bit of an understanding of this. You’ll find that a Walmart product strategy focused around good customer service isn’t very different.
The Importance of Product Inserts
First, online sellers understand that one of the most effective ways of getting a customer’s attention is through product inserts. Product inserts are little cards that provide simple instructions to the buyer.
Many times, these cards are an excellent way for sellers to introduce their brand. They also offer a thank you to the customer for purchasing the product.
The difference between thanking a customer or not reflects in the customer’s rating. People like to receive recognition for what they do.
Maintaining Competitive Pricing
Having the lowest price compared to your competitors helps you to rank higher. Similar to Amazon, Walmart also has a buy box.
You can win the Walmart Buy Box by using the same strategy as for the Amazon Buy Box:
- Having the best pricing
- Having on-time shipping
- Ensuring your products are high-quality
- Keeping a good track record as a seller
- Having the lowest price among competitors
If you are working against larger companies, you aren’t going to be able to offer lower prices. So it’s essential (especially for beginners) to focus on a less competitive product market.
Although, none of this will matter if you cannot maintain your stock!
Walmart Product Strategy – Maintain Your Inventory Levels
Walmart Seller Central enables its users to find out the status of their products easily. However, much like Amazon, the biggest struggle for Seller Central sellers is inventory management.
Out of all of the high-level needs on advertising and marketing, it’s easy to forget about inventory. Stockouts can ruin your chance to rank well for a listing.
When you start selling, always overestimate how much you will need. Pay attention to the rate at which your inventory depletes. Also, always plan on restocking inventory well before your stock reaches zero.
Plan for extra inventory alongside promotional advertising during holiday seasons. If your item is seasonal (beach towels, sunscreen, etc.), plan to offer additional seasonal inventory during these periods.
International sellers will need to plan for extra time. Of course, they will need to have a US storefront, so it might be best to delegate inventory management at this point. You can also make life easier by using an Amazon product inventory tracking tool, which lets you set alerts when a product goes out of stock.
Walmart Sales Strategy – Take Advantage of Two and Three Day Shipping Using Shipping Templates
When customers show continued demand for a specific product, it’s essential to offer quick shipping options. While Walmart still needs to improve shipping speed, the two-day and three-day shipping options are already pretty fast.
The main difference between Amazon Prime and Walmart is their shipping system. While being part of the WFS will increase your coverage map, you don’t automatically need to be part of one to get the other.
Walmart offers more flexibility to businesses that understand logistics. But, they still have a preference towards those who join the WFS program. You’ll also already need a fulfillment network.
You can create shipping templates once you determine how long it will take to ship to different fulfillment centers. These shipping templates simplify the two- and three-day shipping process by transit times per template.
Understanding Analytics and Building Trust
All platforms have a form of analytics. To boost your Walmart Marketplace sales, you need to understand and utilize data.
Walmart’s priorities require you to meet the following conditions:
- Order defect rate of less than 2%
- An on-time shipping rate of 99% or more (OTS)
- An on-time delivery rate of 95% over 14 days (OTD)
- A valid tracking rate of 99% or more (VTR)
- A cancellation rate of less than 2% over 14 days
- Return rates of less than 6% over 90 days.
Walmart calls these its seller performance standards. You can find these as part of your Seller Scorecard, which is on the left-hand side of Seller Central.
Walmart refreshes this performance data every Saturday. Meeting and exceeding all of these demands will help you obtain pro-seller status.
Let’s discuss each of these metrics in further detail.
What is the Order Defect Rate?
High ODR comes from having ineffective instructions that do not adequately inform buyers about using your product. It can also come from low-quality materials that break easily under pressure.
To avoid this situation, ensure your quality control process involves routine inspections. Ideally, you should test your products under the worst possible conditions.
On-Time Shipping and On-Time Deliveries (OTS/OTD)
Ensuring that your products arrive on time involves making sure that the package is handed over to delivery partners quickly
Your on-time shipping rate leads to the next important stat: on-time delivery rate. In order to maintain your Walmart online sales growth, your products need to be delivered on time.
While Walmart makes exceptions in the event of inclement weather, those who sign up for the Two- or Three-Day shipping program must be able to prove their point. They need to have a reliable trucking company or have an internal logistics team to get things done on time.
Walmart sellers need to ensure that their chosen method of fulfillment is reliable. They can do this by shopping around or sticking with WFS. Walmart also has service partners who work to help with deliveries.
What is a Valid Tracking Rate (VTR)?
The valid tracking rate is the rate at which you properly update Walmart when your items have shipped. If you do not provide this information, Walmart will downgrade your seller scorecard.
While this isn’t an integral part of any Walmart growth strategy, it prevents Walmart from refunding the customer based on delays. Walmart’s system is very customer-centric.
How To Reduce Cancellation Rates
Cancellations of Walmart product orders are typically related to changed minds or shipping delays. So one way of reducing your cancellation rate is by being incredibly fast with shipping.
Another way to avoid order cancellation is to avoid inventory stockouts. A considerable part of Walmart’s sales growth comes from ensuring that you have desired inventory in stock.
Sellers who fail to keep their stock at adequate levels will receive less exposure.
Another less common reason for cancellation involves pricing errors. For example, if you sell a $40 item for $4, you may cancel the order yourself.
Numerous order cancellations can become a problem, so be careful when putting down your product details.
How To Reduce Return Rates
Your return rate is based on customer satisfaction. It is not related to order defects, as that is tracked through another statistic.
For example, let’s say the customer found a version of your product from another seller. Their product might include better features; for example, your competitor’s can opener might offer a better grip.
More often than not, high return rates come from the customer’s lack of understanding about exactly what product they will be getting. So your job as a seller is to provide them a clear step-by-step guide and description on exactly how to use your product.
When selling complex mechanical items, it’s even more essential to include a detailed description and instructions for use. Beginner sellers should stick with simple everyday-use products.
Sometimes customers will return an item after using it, even just once. Those customers are a pain, but there’s almost no way of preventing this ahead of time.
If the item is used, you can then charge a restocking fee, enabling you to get money back for the wasted time and lack of a sale. However, many customers will be unhappy with paying anything for a product they don’t keep, so choose your restocking battles wisely.
DataHawk’s Last Tip: Get The Walmart Pro Seller Badge
- Delivery defects rate of 10% or less
- Cancellations of less than 2%
- Listing quality score of 60% (or more) on 70% of a sellers catalog
- More than 100 orders over the last 90 days
- No performance standards violations
- Must be active over the past 90 days
Becoming a pro seller is immediate recognition by customers and by Walmart that you offer a quality storefront. It is similar to becoming “Amazon’s choice” seller on Amazon.
Gaining pro seller status requires that you have a scalable system that attracts people and that you make a minimum of 100 sales.
If you feel overwhelmed, it is time for you to automate your process or hire employees to delegate work to; The best strategy when it comes to growing your online marketplace is to create a functional system. You can automate many of your selling processes using DataHawk’s Walmart Analytics Platform.