Back to blog

Learn with Threecolts

Small group workshops to help you learn, optimize, and grow.

Learn About Coaching

Walmart Marketplace: Common Seller Challenges (& Solutions!)

Threecolts
Threecolts Staff
Published
April 25, 2024
Modified
June 17, 2024
frustrated man grabbing his hair

If you’re an e-commerce seller, you’ve no doubt been interested in selling on Walmart Marketplace. Walmart’s e-commerce platform allows third-party sellers to sell their products to Walmart’s global customer base. Whether you’re just starting out, or you’re looking to expand an existing e-commerce business, selling on Walmart’s online marketplace provides immense opportunity. However, like selling on any other platform, Walmart Marketplace comes with its own set of challenges that can frustrate even seasoned sellers.  

Knowing these challenges beforehand is key in turning any potential hiccups into stepping stones to growth. From navigating the strict Walmart seller's approval process to out-pacing the competition, dealing with fees and enhancing product visibility, there is a lot to consider! Further, operations issues like software integration challenges, ad limits and demanding performance standards can also impact resources and efficiency. 

If you’re curious about selling on Walmart Marketplace, we’ll share some of the most common challenges that current sellers face. We’ll provide practical strategies and insights to help you leap over these challenges, so you can thrive in this competitive selling environment. If you’re struggling with initial setup, trying to improve operational efficiency, or looking for better customer engagement, the following sections will walk you through planning and executing solutions. Let’s explore how to optimize your Walmart selling strategy for maximum growth and minimal stress. 

Understanding Walmart Marketplace Challenges

Complex Approval Process

Description of the Approval Requirements:  

Becoming a Walmart Marketplace seller isn’t as straightforward as it is for other marketplaces. You’ll need to go through an in-depth vetting process that includes providing business details like tax forms, and potentially product samples. Walmart evaluates sellers on product quality, competitive pricing and operational capabilities. 

Why It Can Be a Barrier for Some Businesses:  

For small or newbie sellers, this process can be intimidating. The requirements for detailed business documentation and a lengthy review process can slow your entry to the marketplace. If you’re hoping to start selling quickly, be mindful of these barriers. 

High Competition

Nature of Competition on Walmart:  

From small indie businesses to multinational brands, there is a lot of competition on Walmart Marketplace. Sellers aren’t only competing with each other, but also Walmart’s own private label lines, which usually have prime positioning and competitive prices. 

Fees and Pricing

Commission Structure and Its Impact on Profitability:  

For every item you sell, Walmart will charge you a referral fee. If you want to be a Walmart seller, you’re going to need to make peace with fees as part of the deal. The referral fee varies by category, but it typically ranges from 6-20%. (Which, if you’ve got small margins, can represent a significant chunk of your profit!) 

Visibility and Search Issues

How Product Visibility Is Managed on Walmart:  

Search optimization, customer reviews, pricing and sales performance strongly impact your product visibility on Walmart Marketplace. 

Challenges with Walmart’s Search Algorithm:  

A lot of sellers struggle to understand and optimize for Walmart’s search algorithm, so their products struggle to sell for lack of visibility. Finding the most relevant keywords and setting competitive pricing are key to success here. 

Advertising and Promotional Limitations

Comparing Walmart’s Advertising Tools to Other Platforms:  

Similar to Amazon, Walmart offers ads options like Sponsored Products - but a lot of sellers have found these tools to be significantly less sophisticated compared to those found on more established platforms like Amazon or Etsy. This can limit sellers’ ability to boost visibility and sales for their products. 

Operational Challenges

Issues with Order Fulfillment, Inventory Management and User Interface:  

Many sellers have complained about the Walmart Marketplace platform’s user interface. It’s less intuitive and can be more difficult to navigate. Inventory management and order fulfillment quickly can also pose problems, particularly in high-demand periods. 

Customer Service and Support Issues

Common Complaints About Walmart’s Seller Support:  

Many sellers report difficulties in getting timely and effective support from Walmart. Issues can linger without resolution, impacting seller performance and customer satisfaction.

High Performance Standards

Walmart's Performance Metrics and the Consequences of Not Meeting Them:  

Walmart holds sellers to very high standards, specifically on metrics like on-time delivery and inventory accuracy. Failing to meet their standards can result in penalties that could include the suspension of selling privileges on the platform.

Strict Return Policy

Description of Walmart’s Return Policies and Their Impact on Sellers:  

Walmart’s return policy is friendly towards customers, not sellers. Sellers are required to accept returns within a 30-day window at minimum, which can lead to increased returns and the associated costs.

Integration and API Issues

Technical Difficulties Faced by Sellers in Integrating with Walmart’s Systems:  

Tech challenges can be a big hurdle for some e-commerce sellers. In the case of Walmart Marketplace, the most common struggle is with API integration. This is vital for real-time inventory and order management. Integration problems can lead to discrepancies in inventory levels, pricing issues, and delayed order processing. All things that can negatively affect the customer experience and your seller ratings and sales. 

In understanding these common problems, Walmart Marketplace sellers can be prepared ahead of time. By spending some time strategizing your way through these issues, you’ll have a better chance of success once you do start selling. Now let’s look at some effective strategies to address the challenges. 

Strategies to Address and Overcome These Challenges

Navigate the Approval Process

- Tips for Preparing Comprehensive Application Documents: Make sure your business licenses, tax IDs, and other required documents are current and easily accessible. The more detailed, accurate and organized your application documents are, the more easily you’ll be able to handle any curveballs in the process. 

- Ensure Your Business Aligns with Walmart’s Standards: Walmart has high expectations for sellers on their platform. Ensure that product quality and customer service meet their guidelines. This will help you in getting seller approval, but it also sets a foundation for long-term success on the platform. 

Deal with Competition

- Strategies for Differentiating Products: Focus on what is unique about your products - whether they have unique features, are of higher quality, or serve niche markets that Walmart may not yet be serving with an extensive selection. 

- Competitive Pricing and Unique Selling Propositions: Have a very clear “mission statement” about your business’ unique selling proposition (USP). This is what sets you apart from everything else that is available on the marketplace. Offering competitive pricing on your products is also vital. Performing periodic market research will help you to analyze price points and USPs that will resonate with your potential customers. 

Manage Marketplace Fees and Pricing

- How to Set Prices Considering Walmart’s Fees: Marketplace fees can take a bite out of your profits, so be sure to account for them in your pricing strategy. Calculate the total cost of selling your product, including shipping, storage, platform fees, and other small costs, so you can maintain a healthy profit despite the various deductions. 

- Tools and Software That Can Help Manage Profitability: Utilize product pricing tools and software that automate price adjustments and help track profitability across different product categories.

Improve Product Visibility

- Walmart Marketplace SEO Tactics: Optimize product listings with relevant keywords, both in the titles and descriptions. It’s really about providing as thorough and as accurate a product listing and title that you can so your products appear in search results.

- Use High-Quality Images and Detailed Product Descriptions: High-quality product images have a direct impact on sales. Quality images let your potential customers know what to expect (which has a side benefit of reducing returns and refunds!). And, when paired with clear, comprehensive product descriptions, can boost your overall Marketplace visibility and conversion rates. 

Leverage Walmart Advertising Tools

- Available Promo Tools on Walmart: Familiarize yourself with Walmart’s Sponsored Products and other ad formats that can boost product visibility.

- Tips for Effective Advertising: Start with a small budget first! You’ll want to test which ads perform the best, while you tweak product images and descriptions to find the optimal presentation. Then you can slowly add to your ads budget over time, boosting spend on high-performing ads with a better ROI. 

Optimize E-commerce Operations

- Best Practices for Inventory and Order Management: Use inventory management software to keep accurate stock levels and ensure fast restocking. Automate order processing to reduce errors and speed up fulfillment.

- Tools That Improve Efficiency and Accuracy: Implement tools like barcode scanners and inventory management systems that integrate seamlessly with Walmart’s platform.

Enhance Customer Service

- Use Automated Systems to Improve Response Times: Implement customer service software that offers automated responses to common inquiries, ensuring quick communication.

- Maintain High Customer Service Standards: Regularly train (and re-train when needed!) your support team on following Walmart’s policies and customer service best practices. Walmart Marketplace takes customer service very seriously, and has high standards for their sellers. Aim for personal, empathetic interactions with your customers. 

Meet Performance Standards

- Monitoring Tools and Practices to Stay on Top of Performance Metrics: Regularly check your Seller Scorecard on Walmart’s dashboard to monitor key performance metrics like shipping times, cancellation rates, and customer feedback.

Handle Returns Quickly

- Strategies to Minimize Returns: Make sure product descriptions and images are accurate. More details can make the difference between a happy customer and one with a case of buyer’s remorse. If needed, offer clear how-to instructions to limit returns due to “user error”. 

- Best Practices for a Smooth Return Process: Have a reliable returns process in place for handling returns quickly and efficiently will help you deliver a positive customer experience - even in less-than-ideal transactions. 

Solve Integration Issues

- Use Third-Party Software and Services: Look for reliable third-party software created for Walmart Marketplace sellers. These seller tools can help you monitor your business by syncing inventory, prices, and orders. (This is especially important for multi-channel sellers!). They can even help you automate your bookkeeping.

- Tips for Troubleshooting Common Integration Issues: Maintain regular checks on data synchronization and stay updated with any changes in Walmart’s API documentation to prevent issues.(Or quickly resolve them, if/when they come up!) 

By implementing these strategies, Walmart Marketplace sellers will be better prepared for any ‘growing pains’ along the way to business success. 

Conclusion 

Building out your business on a new platform is rarely a straightforward process. And the high expectations and stringent guidelines required to be a Walmart Marketplace seller can scare off most interested business owners. But the rewards to do so are significant. By preparing for the approval process, strategically managing pricing and competition, optimizing your products’ visibility, and leveraging advertising tools, sellers can significantly enhance their presence on the platform. Moreover, focusing on efficient operations, exceptional customer service, and high performance standards will ensure not only compliance with Walmart's expectations but also a superb shopping experience for customers.

Walmart sellers must stay flexible and continuously seek improvements in their business practices. Staying informed about platform updates, actively engaging with seller support, and mining the gold from customer feedback to refine your operations are all part of a proactive approach that can lead to sustained success.

Ultimately, while selling on Walmart Marketplace comes with its own set of challenges, the potential rewards of access to a vast customer base and the ability to significantly grow your business are substantial. By addressing the common pitfalls with well-thought-out strategies, sellers can thrive in this competitive marketplace.

FAQs from Walmart Marketplace Sellers 

How can I effectively handle customer disputes on Walmart Marketplace?

Handling customer disputes on Walmart Marketplace involves a proactive and customer-centric approach. First, it's important to respond promptly to any complaints or issues raised by customers. This shows that you take their concerns seriously and are committed to resolving the problem. Always communicate clearly and professionally, regardless of the nature of the complaint.

When resolving disputes, always refer to Walmart’s policies to ensure your solutions are in line with platform guidelines. Offer clear, straightforward solutions such as refunds, replacements, or returns, depending on the situation. If a resolution isn't straightforward, consider asking the customer what solution would satisfy them, as long as it is reasonable and within your company policies. This can help prevent the issue from escalating and potentially leading to negative reviews or further complications.

What are the best practices for managing seasonal fluctuations in sales on Walmart Marketplace?

Managing seasonal fluctuations in sales requires strategic planning and flexibility. Start by analyzing previous sales data to identify trends and patterns that could inform your inventory and marketing strategies for upcoming seasons. Increase stock levels of high-demand products ahead of peak seasons to avoid stockouts and potential sales loss. 

Adjust your marketing efforts based on seasonality; for example, ramp up advertising campaigns during holidays or special events when consumers are more likely to make purchases. During slower periods, you might focus on improving your listings, optimizing SEO, or clearing out old inventory with promotions or discounts to maintain steady cash flow and engagement.

How can I use data analytics to improve my sales performance on Walmart Marketplace?

Data analytics can significantly enhance your sales performance by providing insights into customer behavior, product performance, and market trends. Start by regularly monitoring key metrics available through Walmart’s seller dashboard, such as sales volume, return rates, customer traffic, and conversion rates. 

Analyze this data to identify your best-selling products, peak shopping times, and any patterns in returns or customer feedback that could indicate issues with certain listings. Use these insights to adjust your inventory levels, pricing strategies, and marketing efforts. Additionally, consider investing in third-party analytics tools that integrate with Walmart Marketplace to gain deeper insights into your performance. These tools can offer more detailed data visualizations and predictive analytics to help you make more informed business decisions.

By actively engaging with data and focusing on customer feedback and seasonality, you can better navigate the complexities of selling on Walmart Marketplace and position your business for sustained success.

Browse through and read our other blog posts that are data-driven insights with our very own proprietary data and learn more on Mother's Day trends and best practices, Easter sales, price elasticity of demand, Amazon FBA fee changes, Amazon product title optimization, winter seasonal products, Amazon end of year sales, Valentine’s Day trends and best Amazon fulfillment centers by location and throughput.

Learn with Threecolts

Small group workshops to help you learn, optimize, and grow.