- Walmart started inviting third-party sellers to its new fulfillment service on Tuesday, following a trial run over the past few months.
- The new service, called Walmart Fulfillment Services, helps store and ship products for third-party merchants selling on its site, and provides other services like returns and customer support.
- Walmart also said it plans to eventually open up the service to non-Walmart products and offer its own shipping service for inventory going to its warehouse.
- Walmart’s e-commerce business still lags far behind Amazon’s, accounting for just 5% of the US market, according to eMarketer.
- Visit Business Insider’s homepage for more stories.
Walmart launched a number of new sites on Tuesday to share more details about its fledgling fulfillment service that stores and ships products for third-party merchants selling on its marketplace, Walmart confirmed in an email to Business Insider.
Walmart now lets third-party merchants sign up for the service, called Walmart Fulfillment Services, through its own dedicated website. It also has a separate program overview site that explains how it works. In a YouTube video posted on Monday, Walmart’s VP of e-commerce Jare’ Buckley-Cox says, “We’re proud to introduce Walmart Fulfillment Services.”
Walmart’s spokesperson confirmed in an email to Business Insider that it started inviting sellers to WFS on Tuesday, after testing it for the past few months. Walmart’s e-commerce boss Marc Lore previously said at an industry conference that Walmart was testing WFS but declined to share more details, according to a Bloomberg report from last year.
“Starting today, WFS is available for existing Walmart sellers and prospective sellers to apply to WFS and expand their assortment and grow their businesses with Walmart Fulfillment Services,” Walmart’s spokesperson said.
The move is the latest in Walmart’s effort to grow its third-party marketplace business. Although Walmart’s marketplace, launched in 2009, is still considered to be lagging behind Amazon’s, the new fulfillment service could help recruit more third-party merchants to its site. Products that go through WFS will be eligible for two-day delivery, Walmart says, showing its logistics network is behind Amazon’s one-day shipping program.
“Having a company like Walmart pick-and-pack and ship means you only have to focus on selling,” Ed Rosenberg, who runs an online seller group called ASGTG, told Business Insider. “Walmart is signaling they intend to compete with Amazon in this space.”
Walmart says only sellers “contracted” to sell on its marketplace are eligible to sign up. Once approved, sellers can send their inventory to Walmart’s fulfillment centers. Walmart takes care of pickups, storage, and shipping, as well as returns and customer support. All inventory needs to ship from within the US and they can’t be perishable or regulated products, Walmart says.
“Leverage the largest retailer’s fulfillment network to grow your business,” Walmart wrote on one of the sites.
Walmart seems to have bigger plans for its fulfillment service. In the Q&A section about WFS, it says the fulfillment service could become available to “partners/sellers/brands who do not sell directly on Walmart.com” in the future, though it didn’t give a specific timeline. It also says that while sellers are currently responsible for shipping inventory to Walmart warehouses, it will start offering its own “inbound logistics services to sellers” starting next year.
Amazon grew its marketplace to an estimated 3 million active sellers, in part by the popular use of its own fulfillment service, called Fulfillment by Amazon. The company doesn’t break out revenue from FBA, but discloses the sales it generated from the various seller services it provides. Last year, Amazon reported $53.7 billion in sales related to third-party seller services, up from the previous year’s $42.7 billion.
Other companies like eBay, FedEx, and Shopify have also launched their own fulfillment services, as more merchants move to selling online. But it’s unclear how successful those services have been. eBay, for example, recently shut down its own fulfillment service in less than a year of launching, according to the Silicon Valley Business Journal.
In its most recent quarterly earnings report, Walmart said e-commerce sales grew 35%. It doesn’t disclose exact sales figures for its e-commerce business.
Most market estimates show Walmart is tiny compared to Amazon. Morgan Stanley estimates Amazon’s US sales volume is around $198 billion, or 12 times larger than Walmart’s. It also estimates that Amazon shipped more than 5 billion packages last year, or roughly 16 times more than Walmart did for its e-commerce business.
Amazon accounts for roughly 38% of all US e-commerce sales, according to eMarketer’s latest report, published this week. Walmart is a distant second, with 5.3% of the market.