Walmart has launched a fulfillment service for sellers on its marketplace, similar to Fulfillment By Amazon, leveraging its vast logistics network to provide storing, picking, packing and shipping returns processing and customer service for a fee and entice more sellers onto the platform.
Walmart Fulfillment Services started last fall at the company’s Shepherdsville, KY fulfillment center, with plans to expand to multiple locations this year, said Jare’ Buckley-Cox, vice president of WFS for Walmart eCommerce, a former director of Amazon Logistics Shipping and Delivery Support who came over in October 2018.
“Kentucky is a strong central location for us as we can guarantee two-day delivery anywhere in the country,” Buckley-Cox said.
In addition to FBA, Walmart is wading into a crowded arena of 3P fulfillment services, as most ecommerce sellers lack the resources or expertise to handle it in house. These include companies like Shipbob, Red Stag and Shipmonk as well as warehouse-on-demand players like Flowspace and Flexe and UPS-backed Ware2Go and hundreds of traditional 3PLs. In addition, platforms Shopify and eBay both offer outsourced fulfillment services for sellers.
Items available via WFS come with a site badge indicating the retail giant is handling the fulfillment. Walmart said it has set a “high bar” for participation, requiring sellers to meet specific qualifications before being accepted into the program. They pay a storage and fulfillment fee for items processed, not a monthly charge. Walmart said WFS was a “competitive and cost-effective solution” but did not share the fee structure.
FBA charges professional sellers $39.99 per month, while individual sellers pay 99 cents per item sold plus selling fees of 45 cents to $1.35 per unit. Amazon also charges for locating products, packing and shipping, customer service and returns starting at $2.41 per unit and going up to $137.32 for oversized items.
“The tech on the back end works really well, our merchants are excited, and we like what we see so far,” said Walmart U.S. eCommerce CEO Marc Lore of WFS at last week’s analyst day.
The company says the service will also benefit Walmart’s end customers as sellers will be able to expand their SKU assortments by using the service. Buckley-Cox said it was soft launched a few months ago with several merchants in footwear, apparel, home décor, sporting goods, automotive and electronics.
Two participants in the trial, marketplace seller service providers Netrush and Pattern, brought on an extended assortment of items from their clients Leatherman, Peet Shoe Dryer, Popsockets and Thorne. Because of their participation, additional items from each brand became available on Walmart.com.
“Pilot sellers saw a sizeable increase in sales due to better search ranking results and increased conversion with Walmart two-day delivery tags, while fulfilling their inventory at one of the lowest costs in the market,” said Buckley-Cox. “They also received account management support to optimize and grow their business and live customer support when questions arose.”
“WFS has created incentives for Pattern’s brand partners to begin thinking about expanding to Walmart.com,” said George Hatch, director of marketplaces for Pattern in a Walmart blog post. “With WFS, we’ve had one of our best sales months on Walmart.com.”