Ship cost represents a significant percentage of the cost of operating an ecommerce business as evidenced by the $74 billion and $69 billion in 2019 revenue earned for UPS and FedEx respectively. With the launch of Walmart Fulfillment Services (WFS), Walmart introduced a new way to compete with Amazon and manage ship costs. Jare Buckley-Cox, President, Walmart Fulfillment Services, introduced the program as, “a service where select sellers can leverage our world-class supply chain capabilities – from storing, picking, packing and shipping items to handling of returns and customer service.”
With WFS, sellers will ship inventory into Walmart’s fulfillment network. Once received, WFS will make the selection available with “fast shipping, easy returns, and dedicated customer service.” The faster speed will include the added benefit of “higher search rankings and Buy Box prominence with Walmart 2-day tags.” The program operates similar to Amazon’s Fulfillment by Amazon (FBA). In FBA, sellers receive the Prime badge which increases the probability of winning the Buy Box, prominence in search and 2-day delivery.
The pricing structure of WFS is similar to FBA with storage and tiered fulfillment costs based upon weight. Storage costs will increase during peak and after one year. There are additional fees associated with Haz Mat and apparel selection. All fees are subject to change, and if the program is popular, expect to see that happen.
What WFS has to offer sellers
In addition to the flat cost and obvious conversion benefits, Walmart is also offering account management for, “custom recommendations on business optimization and growth.” Anytime you have the opportunity to connect to individuals within the marketplace take advantage. These account managers can provide insights into changes to the program, access data that may not be available to you via Seller Center, and early access to new tools that may provide a competitive edge. Early adopters may encounter bugs, and these account managers are a great way to get those resolved and improve the program.
WFS has some reasonable restrictions:
- Must ship to their fulfillment center from within the U.S. Sellers may not manufacture the inventory overseas (i.e. China) and ship it direct to a WFS fulfillment center. This adds some additional cost, as the shipment will have to be prepped and re-shipped in the U.S.
- No perishable or regulated products. This is necessary to keep operation costs reasonable.
- Maximum product weight is 30 lb. The heavier the item, the costlier the shipping, so this keeps the program reasonably priced for sellers.
- Maximum product dimensions: 25”x20”x14”. The bigger the packaging the costlier the storage and shipping, so adding a cap keeps the program reasonably priced for sellers.
If you are already on Walmart Marketplace, this is a great way to expand assortment, and increase delivery speed to customers. In ecommerce, the early adopters tend to get the biggest benefit. That being said, any new program will experience some growing pains, it’s important to be patient. Our experts can help you determine if WFS is a good fit for your business. Contact us.
For those of you still considering a connection to Walmart Marketplace, read our blog Walmart Marketplace: Why it’s a key move for your ecommerce business, to learn more about how to get started and why partnering with CommerceHub gives you an advantage.