How to Sell on Walmart with Dropshipping

by mathgeneral · Published August 19, 2024 · Updated August 19, 2024

Selling on Walmart through dropshipping offers a unique opportunity to tap into one of the world’s largest retail platforms without the need to hold inventory. Walmart Marketplace provides access to millions of potential customers, but it also comes with stringent requirements and a competitive environment.

1. Understanding Walmart Marketplace

1.1 What is Walmart Marketplace?

Walmart Marketplace is an eCommerce platform that allows third-party sellers to list their products on Walmart.com. This means that as a seller, you can leverage Walmart’s massive customer base, brand recognition, and logistical infrastructure to sell your products. Unlike traditional retail models, where Walmart buys products directly from suppliers, the marketplace model allows you to retain control over your inventory, pricing, and fulfillment processes.

1.2 Why Choose Walmart for Dropshipping?

Dropshipping on Walmart presents several advantages, including access to millions of shoppers who trust the Walmart brand. Walmart’s stringent vetting process ensures a high standard of sellers, which helps maintain customer trust. The platform’s vast reach allows you to tap into a market that might be difficult to reach through other channels. However, Walmart’s competitive environment and strict policies mean that you need to be well-prepared to succeed.

1.3 The Difference Between Walmart and Other Marketplaces

Walmart Marketplace differs from other eCommerce platforms like Amazon and eBay in several ways. For instance, Walmart places a strong emphasis on competitive pricing and fast shipping. The marketplace is more selective about who can sell on the platform, which helps maintain a high level of product quality and customer service. Additionally, Walmart’s customer demographic may differ slightly, often favoring everyday essentials and value-for-money products.

2. Setting Up Your Walmart Seller Account

2.1 The Application Process

Before you can start selling on Walmart, you must apply to become a marketplace seller. The application process is straightforward but requires thorough preparation. You’ll need to provide detailed information about your business, including your legal business name, tax ID, a description of your product categories, and your history of selling on other eCommerce platforms.

When filling out the application, it’s essential to highlight your business’s strengths, such as your experience in eCommerce, your ability to manage large volumes of orders, and your commitment to customer satisfaction. Walmart is particularly interested in sellers who can offer competitive prices, fast shipping, and high-quality products.

2.2 The Approval Process

The approval process for Walmart Marketplace can take a few weeks. During this time, Walmart will review your application to ensure that your business meets their standards. They look for sellers who have a proven track record of success, particularly on other major platforms like Amazon or eBay. Additionally, Walmart prefers businesses that can demonstrate the ability to handle large-scale operations and maintain excellent customer service.

If your application is approved, you’ll receive an invitation to join the marketplace. If not, Walmart typically provides feedback on why your application was not accepted, allowing you to make necessary adjustments and reapply.

2.3 Setting Up Your Seller Account

Once you’ve been approved, the next step is to set up your seller account in Walmart’s Seller Center. This portal is where you’ll manage all aspects of your Walmart business, including listing products, processing orders, and handling customer inquiries.

It’s important to familiarize yourself with the Seller Center’s features and tools. Walmart offers various resources and tutorials to help new sellers get up to speed. Key aspects of setting up your account include entering your business information, setting up payment methods, and integrating your inventory management system with Walmart’s platform.

3. Choosing Your Dropshipping Suppliers

3.1 Criteria for Selecting Suppliers

Selecting the right suppliers is one of the most critical aspects of a successful dropshipping business. Your suppliers will be responsible for fulfilling orders, managing inventory, and ensuring timely shipping. Therefore, it’s essential to partner with reliable suppliers who can meet Walmart’s standards for quality and service.

When choosing suppliers, consider the following criteria:

Product Quality: The quality of the products you offer will directly impact your customer satisfaction and return rates.
Shipping Capabilities: Ensure your suppliers can meet Walmart’s shipping requirements, including fast delivery times and reliable tracking.
Inventory Management: Your suppliers should have robust inventory management systems to prevent stockouts and overselling.
Reputation: Research your suppliers’ reputations by reading reviews and asking for references.

3.2 Integrating with Walmart’s Platform

Once you’ve selected your suppliers, you’ll need to ensure they can integrate seamlessly with Walmart’s platform. This integration is crucial for managing inventory in real-time, processing orders efficiently, and complying with Walmart’s fulfillment requirements.

Several dropshipping platforms offer direct integration with Walmart, simplifying the process. These platforms can automatically sync your inventory, manage orders, and update tracking information. This level of automation is essential for maintaining accuracy and efficiency in your operations.

3.3 Negotiating Terms with Suppliers

With the help of DIGO SOURCING, effective negotiation with your suppliers can significantly impact your profit margins and operational efficiency. Key aspects to negotiate include:

Pricing: Secure the best possible pricing to ensure competitive retail prices while maintaining a healthy profit margin.
Shipping Times: Ensure your suppliers can commit to Walmart’s required shipping times. Consider negotiating expedited shipping options for high-demand products.
Return Policies: Clarify the terms of returns and refunds. Ensure your supplier’s return policy aligns with Walmart’s expectations to avoid potential conflicts.
Exclusivity: If possible, negotiate exclusive rights to sell certain products on Walmart to reduce competition.

4. Listing Your Products on Walmart

4.1 Product Selection

Product selection is crucial to your success on Walmart. Focus on products that have high demand but low competition. Conduct thorough market research to identify trending products, gaps in Walmart’s current offerings, and opportunities where you can provide unique value.

Consider the following factors when selecting products:

Customer Demand: Use tools like Google Trends, Amazon Best Sellers, and Walmart’s own product categories to identify high-demand products.
Profit Margins: Ensure the products you select offer sufficient profit margins after accounting for costs like shipping, advertising, and Walmart’s referral fees.
Niche Markets: Look for underserved niche markets where you can establish a strong presence with minimal competition.

4.2 Product Listings Optimization

Optimizing your product listings is essential for maximizing visibility and conversions on Walmart. A well-optimized listing includes:

High-Quality Images: Use clear, high-resolution images that showcase your product from multiple angles.
Detailed Descriptions: Provide comprehensive descriptions that highlight the product’s features, benefits, and specifications. Use bullet points for easy readability.
Relevant Keywords: Incorporate relevant keywords into your product titles and descriptions to improve search visibility. Use Walmart’s search bar to identify popular search terms related to your product.
Competitive Pricing: Walmart’s algorithm favors competitively priced products. Regularly monitor your competitors’ pricing and adjust accordingly.

4.3 Pricing Strategy

Developing a pricing strategy that balances competitiveness with profitability is key to success on Walmart. Consider the following approaches:

Cost-Plus Pricing: Calculate your total costs (product cost, shipping, fees) and add a markup to determine your selling price.
Dynamic Pricing: Use dynamic pricing tools to automatically adjust your prices based on market demand, competition, and inventory levels.
Promotional Pricing: Offer discounts, bundles, or limited-time promotions to attract customers and boost sales.

Remember that Walmart’s marketplace is known for offering value to customers, so competitive pricing is crucial. However, avoid underpricing your products to the point where it erodes your profit margins.

5. Order Management and Fulfillment

5.1 Order Processing

Efficient order processing is critical for maintaining customer satisfaction and meeting Walmart’s performance metrics. When a customer places an order, your dropshipping supplier should be able to automatically receive the order and begin the fulfillment process without delay.

Use an automated system to manage orders and track fulfillment status in real-time. This reduces the risk of human error and ensures that orders are processed promptly. Make sure that your supplier can handle order spikes during peak seasons or promotions.

5.2 Shipping and Delivery

Walmart’s customers expect fast and reliable shipping. To meet these expectations, your supplier must be capable of shipping orders within Walmart’s required timeframe, typically within two business days. Late shipments can lead to negative reviews and penalties from Walmart.

Consider the following best practices for shipping:

Offer Free Shipping: Walmart’s customers are accustomed to free shipping. Work with your supplier to incorporate shipping costs into the product price if necessary.
Provide Tracking Information: Always provide customers with tracking information so they can monitor their order’s progress. This transparency helps build trust and reduces customer inquiries.
Plan for Contingencies: Have backup suppliers or alternate shipping methods in place in case of unexpected delays or issues with your primary supplier.

5.3 Handling Returns and Customer Service

Handling returns and providing excellent customer service are essential for maintaining a good reputation on Walmart. Develop a clear return policy that aligns with Walmart’s guidelines and ensures customer satisfaction.

Consider the following when managing returns and customer service:

Return Policy: Clearly state your return policy on your product listings. Make it easy for customers to initiate returns and ensure your supplier can handle returned items efficiently.
Customer Inquiries: Respond to customer inquiries promptly and professionally. Walmart monitors response times and customer satisfaction, so it’s important to provide timely and helpful support.
Resolve Issues Quickly: If a customer has an issue with their order, resolve it quickly to avoid negative reviews and potential penalties from Walmart.

6. Marketing and Promoting Your Products

6.1 Walmart Advertising

Walmart offers several advertising options to help you promote your products and increase visibility. The most popular options include:

Sponsored Products: These ads appear in relevant search results and on product detail pages. Sponsored Products can help you reach customers actively searching for products like yours.
Walmart Performance Ads: These display ads appear across Walmart’s website, targeting customers based on their browsing behavior and purchase history.
Enhanced Listings: Improve the appearance of your product listings with enhanced content, including videos and detailed product descriptions.

Investing in Walmart’s advertising tools can help you stand out in a crowded marketplace and drive more traffic to your listings.

6.2 External Marketing Strategies

In addition to Walmart’s internal advertising options, consider using external marketing strategies to drive traffic to your Walmart listings. Some effective methods include:

Social Media Marketing: Promote your products on social media platforms like Facebook, Instagram, and Pinterest. Use paid ads to target specific demographics and drive traffic to your Walmart listings.
Email Marketing: Build an email list of potential customers and send them targeted promotions, product recommendations, and updates about your Walmart store.
Content Marketing: Create blog posts, videos, and other content that highlights the benefits of your products. Share this content on your website and social media channels to attract customers and build brand awareness.

6.3 Reviews and Ratings

Customer reviews and ratings are crucial to your success on Walmart. Positive reviews boost your product’s visibility and credibility, while negative reviews can hurt your sales.

Encourage satisfied customers to leave reviews by following up with them after their purchase. Address any negative feedback promptly and professionally, offering solutions to resolve the issue. High ratings and positive reviews can significantly improve your product’s performance in Walmart’s search results.

7. Monitoring and Improving Performance

7.1 Performance Metrics

Walmart provides sellers with various performance metrics to help you monitor and improve your operations. Key metrics include:

Order Defect Rate (ODR): This measures the percentage of orders with issues such as late deliveries, cancellations, or negative feedback. Walmart expects sellers to maintain a low ODR.
On-Time Delivery Rate: This measures the percentage of orders delivered on time. Meeting Walmart’s delivery expectations is crucial for maintaining your seller status.
Customer Service Metrics: These metrics track your response time to customer inquiries and the overall satisfaction of your customers.

Regularly review these metrics to identify areas for improvement and ensure you’re meeting Walmart’s performance standards.

7.2 Adjusting Your Strategy

Based on your performance metrics and sales data, continuously adjust your strategy to optimize your Walmart dropshipping business. This might involve:

Optimizing Listings: Regularly update your product listings to improve visibility and conversions. Test different titles, descriptions, and images to see what works best.
Refining Pricing: Use dynamic pricing tools to adjust your prices based on competition, market demand, and inventory levels.
Improving Fulfillment: Work with your suppliers to streamline order processing and shipping, ensuring timely deliveries and reducing the risk of order defects.

7.3 Scaling Your Business

Once you’ve established a successful dropshipping operation on Walmart, consider scaling your business by expanding your product range, entering new categories, or exploring additional marketplaces.

Consider the following strategies for scaling:

Diversifying Product Offerings: Add complementary products to your existing lineup to increase average order value and attract repeat customers.
Expanding to Other Marketplaces: Once you’ve mastered Walmart, consider expanding to other marketplaces like Amazon, eBay, or Shopify to reach even more customers.
Investing in Automation: As your business grows, invest in automation tools to manage inventory, orders, and customer service more efficiently.

8. Challenges of Dropshipping on Walmart

8.1 Competition

Walmart’s marketplace is highly competitive, with many sellers vying for the same customers. To succeed, you’ll need to differentiate yourself by offering unique products, competitive pricing, and exceptional customer service.

Consider the following strategies to stand out from the competition:

Niche Focus: Focus on a specific niche where you can offer unique products or better value than your competitors.
Brand Building: Build a strong brand that resonates with your target audience. This can help you attract loyal customers who choose your products over generic alternatives.
Customer Loyalty Programs: Implement loyalty programs or incentives to encourage repeat purchases and build long-term customer relationships.

8.2 Compliance with Walmart’s Policies

Walmart has strict policies regarding product quality, shipping, and customer service. Non-compliance can lead to account suspension or removal from the marketplace. It’s crucial to stay informed about Walmart’s policies and ensure your business operations align with them.

Consider the following best practices for compliance:

Regular Audits: Conduct regular audits of your operations to ensure compliance with Walmart’s standards.
Training: Train your team and suppliers on Walmart’s policies and expectations to prevent compliance issues.
Stay Informed: Keep up with any updates or changes to Walmart’s policies and adjust your operations accordingly.

8.3 Supplier Reliability

Your success on Walmart heavily depends on your suppliers. Unreliable suppliers can lead to stockouts, delayed shipments, and negative reviews. Regularly evaluate your suppliers and have contingency plans in place to mitigate risks.

Consider the following strategies for managing supplier relationships:

Regular Communication: Maintain regular communication with your suppliers to stay informed about inventory levels, shipping times, and potential issues.
Backup Suppliers: Have backup suppliers in place for your most important products to prevent disruptions in case of supplier issues.
Performance Monitoring: Regularly monitor your suppliers’ performance and address any issues promptly.