When you sell on more than one channel, there’s bound to be more complexity than simply sticking to Amazon or your own store. However, diversifying your sales channels is one of the best ways to increase your revenue, access new markets, and boost your brand recognition.
Amazon and Walmart Marketplace are two of the biggest and most prominent eCommerce platforms available to merchants today. However, selling on both with either a separated or single pool of inventory can present unique challenges.
For example, you may end up running out of inventory from a shared pool and overselling, or having too much inventory allocated to one marketplace in a split pool and not enough in another.
In this article, we’ll discuss how you can address these issues, as well as:
- The advantages of adopting a multi-channel approach
- The potential difficulties associated with this strategy
- The solutions Walmart and Amazon provide
- The pros and cons of each solution
- Recommendations to optimize your fulfillment on both platforms
Why sell on Walmart.com and Amazon?
Amazon hosts 1.7 million small and medium-sized businesses, and Walmart.com attracts nearly 120 million unique monthly visitors. Given the size and reach of these marketplaces, selling through both provides a potentially lucrative opportunity for eCommerce merchants.
These platforms also offer their own fulfillment programs (WFS and FBA respectively), which make it easier to establish your business on Walmart.com and Amazon. FBA and WFS handle end-to-end fulfillment and customer support for you, along with providing advantages on their respective marketplaces.
With Amazon and Walmart taking care of fulfillment, you can focus on other priorities — like implementing an approach that harnesses the power of both platforms.
The benefits of a multi-channel approach
Launching your business on both Amazon and Walmart.com can yield fruitful benefits that grow your store and promote its overall success.
Expanded reach
The growth of eCommerce has broadened consumers’ choices as well as the number of digital channels to shop and sell on. This has simplified the process of researching and comparing products and increased the average number of pre-sale touchpoints to six.
Mobile commerce has also exploded. As of 2022, more than 230 million consumers in the U.S. own smartphones. Of those, 79% made an online purchase using their mobile device within the last half of 2021. These numbers show this method of selling can generate significant revenue.
With a multi-channel approach, you’ll be able to meet customers across touchpoints and engage mobile shoppers.
Improved customer experience
A report by Salesforce revealed 64% of customers move across an array of devices and platforms to start and complete a purchase. If they’re unable to find their desired product, price, or shipping speed, 59% then head to Amazon. Customers also want the best deals and a more personalized experience.
You can satisfy your customers by implementing additional sales channels because:
- They can find you using any device
- Customers can access more payment and shipping options
- Different shopping platforms hold their own sales and promos
Higher customer retention
Statistics from Cybra show that companies with limited sales channels only retain 33% of their customers. On the other hand, those that engage customers on multiple channels retain an average of 89% of them.
Decreased risk
You can offset, or even eliminate, a point of failure with a network of sales channels. Imagine you have three, and you discover two are thriving while one is failing. Your two successful channels can offset the third’s losses. With only one channel, however, the damage would have been worse.
More lucrative bottom line
The above benefits will increase your revenue. To present a concrete figure, Shopify reported that businesses with multiple sales channels generate 190% more revenue than those that rely on one. A multi-channel approach can make that large of a difference.
Complexities in multi-channel fulfillment
Multiple selling channels bring multiple processes to oversee. Because WFS and FBA are restricted to orders from their marketplaces, you’ll have to manage two independent marketplaces and fulfillment solutions simultaneously. Below, we’ve outlined some of the key challenges with multi-channel fulfillment.
Inventory management
Maintaining inventory is difficult with multiple sales channels. You may encounter issues such as:
- Overstocking & overselling — Managing supply and demand or estimating how much product you’ll need on hand can be challenging. Having too much can incur high storage costs and other expenses, while not having enough prevents you from serving new customers.
- Manual tracking — Using physical spreadsheets and documents to monitor and manage inventory, sales, and orders across channels and warehouses quickly becomes inefficient. You’ll need multi-channel software that can automate the process and provide data.
Customer experience and support
Each sales channel offers its own customer experience, which makes it more difficult to provide customer support. If your fulfillment solutions handle support for you, providing a consistent on-brand interaction with your customers is also a major challenge.
Managing fees
Fees can be hard to calculate and monitor properly with a multi-channel approach because each online marketplace structures its fees differently. For example, the referral or product fees you incur on Amazon for a category like Electronics will be different compared to those on Walmart.com.
Multi-channel logistics options
Amazon and Walmart.com are aware of these problems. Both platforms provide solutions to the aforementioned challenges to ease the burden on sellers.
Walmart Fulfillment Services
Walmart runs a program called Walmart Fulfillment Services (WFS), which provides sellers access to fulfillment centers where they can store their inventory. Through it, the company handles order fulfillment and customer support, just like Amazon’s FBA.
The program also offers a flexible range of carriers, shipping methods, and shipping prices. However, it’s not without its drawbacks. We’ll discuss the pros and cons of WFS below.
Pro: Greater brand awareness, visibility, and sales
WFS gains your brand more exposure (which leads to more sales) by improving the customer experience through:
- Two-day shipping, plus free and easy returns — The program can achieve this anywhere in the United States.
- Free shipping — WFS products are included in the Walmart+ “free shipping” subscription program, which helps customers minimize their expenses.
- Increased product visibility — You can display your items with “Two-Day Delivery” and Fulfilled by Walmart tags, which earn you higher search rankings and Buy Box wins. They can also close 30% to 50% more sales on average.
Pro: Save money
The WFS Preferred Carrier Program reduces your expenses. Compared to those who ship inbound themselves, early participants reported an average 50% lower inbound shipping rates. You’re also charged minimal fees for shipping customer returns and inventory removals.
Pro: Easy performance monitoring
You can view real-time data on your business’s sales performance through WFS dashboards and APIs. Effectively manage your inventory, shipment, and order tracking through:
- Walmart’s Seller Center
- Direct APIs
- Third-party solution providers
However, the WFS program also has its drawbacks.
Con: Tedious onboarding process
Walmart’s onboarding can take a long time. Besides completing your registration, going through the launch checklist, and obtaining your authentication credentials, you also have to:
- Provide Walmart with data on a minimum threshold of items and quantities (typically 100 SKUs)
- Undergo testing for your store
- Pass Walmart’s final review
- And more
Con: Unwelcoming to new sellers
Walmart prohibits sole proprietors or LLCs without a unique business tax ID from selling on the platform. You must also verify your business address by submitting an EIN Verification Letter to certify your company, and have a wide SKU catalog (as mentioned previously).
Con: Limited to one platform
WFS only fulfills Walmart orders, which leaves you no room to fulfill orders for other eCommerce marketplaces or to expand your business.
Fulfillment by Amazon
Fulfillment by Amazon makes it easier to build your eCommerce presence on Amazon.com. Through the program, Amazon stores, handles, and ships your items, even providing customer service for your goods.
You simply send your products to Amazon’s warehouse, then the company takes it from there. Below, we’ve outlined its advantages and disadvantages.
Pro: Multi-channel fulfillment
Besides the FBA platform, you can also take advantage of Amazon Multi-Channel Fulfillment (MCF). This provides low-cost, quick, and reliable fulfillment for your eCommerce sales channels, including:
This simplifies fulfillment for businesses that sell on multiple marketplaces and, if you start with Amazon.com, it also provides the opportunity for expansion.
Pro: International network of fulfillment centers
Amazon’s warehouses and distribution centers cover many locations worldwide, which you can access through FBA. The company leases massive warehouses and subdivides them into smaller spaces for fulfillment. Amazon also has years of experience in international eCommerce, so they’ve honed their strategy to ensure minimal hassle and errors.
Pro: Prime two-day shipping
These days, customers expect speedy shipping. Offering that plus free delivery gives you an edge over your competition. FBA fulfillment gives you access to Prime two-day shipping, and your items receive Amazon’s Prime badge as well, which lets you:
- Reach Amazon’s loyal customers — You can offer your products to Amazon’s wide network of Prime members.
- Compete more strongly — Products listed with Seller Fulfilled Prime have higher chances of being the featured offer.
- Offer guaranteed delivery dates — Seller Fulfilled Prime orders display “Free Two-Day Delivery” messaging so Prime customers are more likely to make repeat purchases.
FBA may seem like an obvious choice for eCommerce sellers, but it’s not perfect.
Con: Fees can pile up
Thriving businesses on Amazon.com will inevitably need more storage. FBA’s fees are charged based on your product’s size, weight, and how much space it occupies. You also have to take into account three other storage fees:
- Monthly inventory storage fees that climb as you store and sell more units
- Long-term storage fees, which you incur on top of your monthly fees if your inventory sits in the company’s fulfillment centers for an extended period of time
- FBA inventory storage overage fees, which Amazon charges when you exceed the company’s storage limits (on top of your monthly expenses)
So, as your business grows and scales, the above-listed fees will also increase and cut into your profit margins.
Con: Potentially expensive product line expansion
Amazon structured its referral fees so that certain product categories incur higher charges. Widening your product catalog may be less profitable as a result, especially if your desired items fall under categories with higher rates:
- Items under the Cell Phone Devices and Consumer Electronics categories, for instance, have a referral percentage of 8%
- Electronics Accessories are subject to a rate of up to 15%
- Meanwhile, the referral percentage for Amazon Device Accessories is 45%
Con: Less control
If you use FBA, the customer experience revolves around Amazon, not your brand. Despite a thriving business, all your customer interactions will go through Amazon. This limited branding capability prevents you from leaving a lasting impression and may cause long-term issues such as short customer lifetime values.
Our recommendations
Here are some tips to help you effectively address the challenges of multi-channel fulfillment, especially if you want to sell on both Amazon and Walmart.com.
Diversify your fulfillment solutions
A good workaround is to combine WFS and FBA along with a 3PL, which serves as an additional backup. This is a helpful redundancy for your logistics, since a 3PL backup can serve both Amazon and Walmart at the same service-level agreements, as well as prep and replenish inventory at WFS and FBA.
Establish cohesive branding
Your packaging is the first physical representation of your brand, making it a prime spot to establish brand consistency. Packaging allows you to differentiate your name and deliver a memorable impression to your customers (which can make your brand recognizable in the long term). Some ways to customize your packaging so you’ll stand out include:
- Design a unique aesthetic
- Create an opening experience
- Use sustainable and eco-friendly materials
The main point though, is for your packaging to provide a uniform brand experience across your various sales channels. This requires you to work with reliable partners that can accommodate your branding’s specific dimensions, materials, aesthetic, or design. Also, make sure to account for both Amazon and Walmart’s respective packaging requirements.
Digital integration
A digitally connected supply chain makes managing your fulfillment across sales channels seamless. It helps to ensure accurate data, real-time adjustments, and on-point inventory forecasting.
Digitally integrating your supply chain, from manufacturer to fulfillment helps you:
- Optimize your distribution and delivery networks
- Automate your manual processes and streamline inefficient ones
- Properly monitor your supply chain with end-to-end visibility and traceability
Wrapping up — Diversification and cohesion is key
Incorporating more fulfillment solutions — like using FBA, WFS, and a 3PL simultaneously — can solve your problems with multi-channel selling, especially on Amazon and Walmart.
Additionally, by utilizing your packaging and digital connectivity, you can ensure cohesion in your supply chain and your branding across sales channels. Take note of what we’ve discussed in this article, and you’ll be better positioned for success.
About the Author
Rachel Go is the marketing director of MyFBAPrep, an international network of eCommerce 3PLs and prep warehouses with 50+ locations, 20M+ square feet of operating space, and the ability to reach any US customer in 1 to 2 days. MyFBAPrep handles item-level FBA prep and eCommerce fulfillment (pick/pack/ship) including Amazon FBM and Seller Fulfilled Prime. They also handle other marketplace fulfillment such as Walmart for enterprise merchants, at-scale forwarding and storage for Amazon aggregators, and B2B retail replenishment services including EDI.
MyFBAPrep provides access to strategic warehouse locations and a wide variety of eCommerce services with a single partnership, along with white glove customer service and best-in-class technology. Sellers can send items into a single MyFBAPrep location and let us handle shipment splitting, prepping, packaging, and shipping across their sales channels. We integrate with most major warehouse WMS platforms and client Order Management Systems offering real time inventory levels, order tracking and dashboard analytics across our network.
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