How to More Effectively Manage Shipping Costs on Walmart Marketplace

*lift applicable to Free 2-Day selection

Through our close working relationship with Walmart Marketplace and the Rithum sellers using it as a key sales channel, we’re able to apply best practices and strategies to help sellers take advantage of Walmart Marketplace’s innovative programs to increase sales and enhance their customer experience.

Today, we’re taking a look at the different strategies that sellers can implement to better manage shipping costs related to their participation in Walmart’s Free 2-Day and 3-Day Shipping programs.

Along with dimensions and weight, the distance from seller to buyer are the two main drivers of ship cost. Finding ways to minimize that distance will help youmaximize your opportunity with Walmart’s Free 2-Day and 3-Day Shipping program.

You can do this with a number of different approaches:

Regionalization

Walmart has created the ability to reduce the regions to which you offer expedited shipping methods in Seller Center. While this will reduce the number of buyers that will receive your Free 2-Day/3-Day offer in search, it will help you reduce the cost of shipping associated with that listing.

Zone charts from carriers provide a template for identifying the regions that will support expedited delivery requirements. Using these charts for your preferred ship method (i.e., ground) will also help you estimate the cost to add new items to the program to help you find the balance between pricing yourself out of the Buy Box and losing money due to costly shipping.

Regardless, shipping sticker shock can be limited by starting small and working your way to the outer limits of your preferred ship methods coverage zone.

While Ground may be necessary for some selection, USPS Priority Mail is available to fulfill Walmart’s 3-Day order volume. The ability to leverage this ship method is a great way to lower the price point for products that remain profitable within this delivery promise. Weekend delivery is not considered in the 3-Day promise so weekends may offer the opportunity to flex your regions.

Fulfillment Expansion

Rather than reducing the area to which you offer 3-Day, you may consider increasing the area to which you offer expedited ship options at a reasonable ship cost by expanding your fulfillment network. While this may not be a reasonable approach in every circumstance, understanding the available options may help you plan for growth. We focus on two of the most common methods.

Seller-owned warehouse

This option provides the most control, but also the most complexity and cost. Owning the warehouse gives you the oversight to implement your process, resolve performance issues, and maintain independent carrier relationships. However, you will also need to staff and manage your warehouses, implement and maintain the technology and physical assets, and cover the startup and ongoing costs.

The expansion location will be critical as making a poor decision may have lasting implications.

Additionally, it can be time consuming to implement which may mean lost opportunity.

Third party logistics solutions (3PLs)

As an alternative to owning/operating your own warehouse network, 3PLs have some distinct advantages when trying to scale your business.

Existing warehouse network. An experienced 3PL has built a network of warehouses to allow you to stage inventory close to your buyers. These networks may offer you the ability to expand placement for popular items and during peak times while maintaining the long tail in fewer locations to reduce cost.  

Software and technology Many 3PLs have adopted software and processes to differentiate themselves among a crowded field of startups and regional solutions. These solutions may provide insight into demand, inventory health, and operational costs.

Fulfillment expertise You are entrusting your marketplace business to your 3PL, so ensure that they understand the unique requirements associated with supporting a marketplace business. Your solution provider should have mechanisms to maintain shipping and delivery requirements without sacrificing order fulfillment accuracy.