Selling on the Walmart Marketplace can be more complex than simply finding a product and setting up a listing. Sellers must be strategic about their seller relationships with Walmart as well. To set yourself up for success, consider your options carefully even before you begin sourcing products.
When you sell on Walmart, you have three paths: 1P, 3P, and DSV.
- First-party (1P): When you sell 1P, you sell in bulk to Walmart at wholesale prices. When someone purchases one of your items, they see Walmart listed as the seller, and Walmart takes care of listing optimization, advertising, pricing, and other marketplace aspects. You are only responsible for supplying the product.
- Third-party (3P): When you sell as a 3P vendor, you own the product, listing, and brand, and use Walmart as your channel. When shoppers view your listings, they see that the item is from you. You’re in charge of optimizing your listing, setting your price, taking and fulfilling orders.
- Dropship vendor (DSV): When you sell as a DSV on Walmart, you sell under Walmart’s name and listing rules, at wholesale prices, but not in bulk. Walmart will send you the orders to fulfill as they come in, so you would send items as they’re needed.
You could also theoretically dropship on Walmart as a 3P seller, as long as you meet their service-level agreements.
Now, let’s analyze the pros and cons of all your options for selling on Walmart Marketplace.
First-party selling on Walmart Marketplace
1P sellers offer goods to Walmart in bulk, with wholesale prices. Once Walmart purchases, say, 10,000 units, they are responsible for the rest. Your only responsibility is providing the items at wholesale prices.
Walmart will take ownership and responsibility for selling those goods, with the inventory responsibility off your hands. Since Walmart has your inventory, there’s also a chance they’ll activate Walmart Free 2-Day Shipping to boost conversions.
- Your items are sold under the recognizable Walmart name
- Walmart takes care of listing optimization
- Walmart markets the product, ie. via sponsored ads
- You don’t have inventory responsibility
- You make sales in bulk
- You have no control over pricing, which means if you sell the same item 3P on a marketplace that price matches you could get de-listed
- You must offer wholesale pricing
Third-party selling on Walmart Marketplace
If you’re a third party seller on Walmart, you have more flexibility and can control your entire sales and fulfillment process. That means you set your own pricing and can match your pricing on other marketplaces (if you sell 3P there), maintain healthy retail margins, and get use Walmart’s 2-day shipping badge to boost your conversions.
We recommend this method, because you can provide nationwide 2-day shipping through your own fulfillment processes or through Deliverr. Using Deliverr to fulfill also gets you pre-approved for Walmart’s 2-day shipping program, and we’ve seen some excellent results.
- You can sell your items at retail price, which means larger profit margins
- You have full control over your listings and marketing tactics
- You can activate Walmart Free 2-Day Shipping nationwide
- You don’t sell in bulk
- You’re responsible for marketing and optimizing your own listings
Selling as a Dropship Vendor on Walmart Marketplace
Dropshipping is the practice of marketing and selling items online, then having your supplier or manufacturer ship these goods out. When you dropship, you as the seller won’t ever handle the items you sell. Another party handles the packing, shipping, and fulfillment on your behalf, cutting out a giant step of the process.
When you sell as a dropship vendor on Walmart, Walmart is using you as their supplier/manufacturer. So they don’t have to handle items, and rely on you to fulfill orders as they come in. However, since you’ll be fulfilling out of your own warehouse, Walmart can only offer 2-day shipping tags to shoppers close to your warehouse.
- You sell your product under Walmart’s recognizable brand
- Walmart handles listing optimization
- Walmart will take care of marketing your product
- You have to sell at wholesale prices
- You don’t make sales in bulk
- You shoulder inventory risk, as items remain on your books until an order is made
- You don’t have control over your item’s pricing, so if Walmart lowers your product’s selling price, you may have to match it on other marketplaces you’re selling on 3P
- Your items won’t be activated for 2-day shipping tags nationwide
When Walmart first got into eCommerce, they invested heavily in 1P and DSV sellers. Now that Walmart Marketplace has opened up to 3rd party sellers, we predict more sellers will move towards the 3P model and away from the DSV model, where you shoulder all the risk for little reward.
Ultimately, you have to decide which Walmart option suits your eCommerce business as a whole, working in harmony with your other stores on Amazon or Shopify. There are benefits to selling wholesale to Walmart, but we recommend the 3P path for the sake of fast shipping and more control.