For many ecommerce merchants, it’s difficult to independently handle order fulfillment. On top of operational challenges, fulfillment isn’t cheap. According to Statista, 53% of merchants revealed that their fulfillment costs had risen in 2020.
These rising costs can be attributed to the need for personnel, insurance, and warehouse space. Working with a fulfillment service provider allows sellers to focus on other aspects of their business and continue to grow.
Walmart Fulfillment Services can make order management less time-consuming and costly for sellers. Sellers who want to meet Walmart’s performance standards and expectations understand the part that fast delivery at a low shipping cost plays in their success. Merchants using WFS typically see improved visibility in Walmart’s search results, faster shipping, and ultimately, business growth.
Here’s what Walmart sellers need to know to get started with WFS.
What is Walmart Fulfillment Services?
Walmart Fulfillment Services (WFS) is an order fulfillment service that allows sellers to outsource inventory management for a fee. It’s commonly called Walmart’s “answer to Fulfillment by Amazon.”
When a customer orders from a seller that uses WFS, Walmart takes over the order process. It fulfills the order, manages returns, and provides customer service on the seller’s behalf.
According to Gartner, Walmart has one of the most impressive supply chains globally. Walmart Fulfillment Services allows sellers to leverage Walmart’s efficient logistics capabilities with a trusted, reliable fulfillment process.
As Walmart grows and expands its marketplace, its fulfillment services are likely to grow with it.
Eligibility
To be eligible for WFS, you’ll need to be an existing Walmart Marketplace merchant. In addition, your products need to meet the following requirements:
- Products must be shipped to Walmart fulfillment centers from within the United States
- No perishable or regulated products
- Products cannot weigh above 30 pounds
- Product dimensions should not be more than 25″ x 20″ x 14″
You also need to be in good standing with the platform with a history of on-time orders, great customer satisfaction, and overall quality service.
Although Walmart was notoriously slow with approvals for the program, sellers have reported an uptick with monthlong applications going through.
Cost
One of Walmart’s stated selling points for Walmart Fulfillment Services is its simple pricing structure. As Walmart’s website states, “Enjoy a simple cost structure that includes a fixed monthly storage fee and a fulfillment price based on shipping weight alone.” However, apparel and hazmat items are exempt from this pricing structure.
As of August 20, 2021, the program’s pricing starts at $3.45 for products weighing under 16 ounces or 1 pound.
Sellers can expect to pay $0.75 per cubic foot for storage space every month from January to September. However, the $0.75 fee only applies to items stored for less than 30 days from October to December.
Items stored for longer than that will add $1.50/cubic foot per month for a total cost of $2.25/cubic foot per month. This article offers more insight into WFS fees.
Walmart Fulfillment Services vs. Amazon FBA: What’s the difference?
WFS is often touted as Walmart’s answer to Fulfillment by Amazon (FBA). However, despite frequent comparisons, WFS and FBA are very different fulfillment services with distinct benefits.
- While customers without Amazon Prime cannot access one- and two-day shipping, WFS offers free two-day shipping on all orders over $35—no Walmart+ membership required.
- WFS has never had significant issues with two-day delivery. Amazon’s delivery suffered a blow at the start of the COVID-19 pandemic, as it could not maintain two-day shipping. Granted, WFS handles a lower volume of shipments, but its strong delivery record is still likely a good indicator of future success.
- The process of shipping products is simpler. FBA requires sellers to ship inventory to multiple fulfillment centers, but Walmart sellers only have to ship to one or two Walmart fulfillment centers.
Neither service is perfect. Ultimately, the choice of which marketplace service to use for your business should be determined by your business model.
Pros and cons of Walmart Fulfillment Services
For Walmart sellers, there’s no better third-party fulfillment option than the one offered by Walmart itself. By offering fast shipment at reasonable costs, Walmart Fulfillment Services allows sellers to focus solely on the core of their business.
Benefits
If you’re doubting whether to take the leap with Walmart Fulfillment Services, the program offers several benefits that might help you make a decision.
- Fast delivery. WFS sellers can offer two-day shipping on their products.
- Simple pricing structure. Compared with platforms like Amazon’s FBA, which have hidden fees that sellers always need to keep track of, WFS’ pricing structure is straightforward.
- Clear reporting. Through easy-to-read dashboards, sellers can track their orders and inventory.
- Support for your customers and your business. WFS provides customer service on sellers’ behalf by managing all inquiries, refunds, and returns. Sellers can also get help from WFS customer support as needed.
- Increased visibility in search. Sellers using WFS are automatically assigned Walmart’s TwoDay tags. Walmart prioritizes sellers with the two-day tag on their products, so sellers can gain higher rankings and Buy Box prominence in Walmart Marketplace search.
The benefits Walmart sellers will encounter using this service are likely to improve, as WFS is still in its early stages and will only grow as Walmart expands and more customers are drawn to the platform.
Drawbacks
WFS is a fairly new program, with Walmart launching it in February 2020. Its recency and low user rate mean that there are issues that sellers will encounter when using it. To provide as much information as possible, sellers also need to understand the drawbacks associated with WFS.
- Strict rules. Merchants cannot sell the same products through WFS that they do through other fulfillment services like FBA. If discovered, sellers risk having their Walmart operations shut down.
- Geographical limitations. WFS only ships in the U.S. Sellers can ship to all 50 states, some military addresses, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
- Limiting product dimensions. Walmart has very limited product dimensions, so certain sellers might not be able to use the service.
Despite the program’s restrictions, the WFS program is still worth pursuing for Walmart sellers.
How to set up Walmart Fulfillment Services
Getting started with WFS is fairly straightforward, as long as you’re a Walmart Marketplace seller. If you’re not, visit the Walmart Fulfillment Services Interest Form. Walmart recommends that sellers have the following details on hand before starting their seller application:
- U.S. Business Tax ID. Social Security Numbers are not accepted
- Primary product categories, catalog size, and related information (e.g., total SKUs you initially plan to fulfill with WFS)
- Planned integration method for your product catalog (i.e., how you plan on adding your existing inventory to the platform. Some options provided are bulk upload, API, and external solution provider)
For existing Walmart sellers, just sign in to your Seller Center account and use the WFS link in the marketplace dashboard to begin the process.
Walmart then reviews your application. If accepted, you will have to convert your products to Fulfilled by Walmart listings.
Keep in mind that any product you intend to enroll in the program must be set up on the Walmart Marketplace as well.
Next, you’ll send your inventory to Walmart fulfillment centers, where items will be stored until a customer places an order. Then, from Walmart’s warehouses, orders are packaged and shipped.
Strengthen your business with Walmart Fulfillment Services
With the burden of fulfillment taken away, WFS sellers can improve their operations to meet and surpass Walmart’s standards. Merchants can focus on meeting Walmart’s expectations by offering:
- Products that are new to the marketplace
- Competitive pricing
- High-quality listings
- Enough inventory to meet customer demand
The combination of a compliant business model with WFS will help your business scale significantly on the platform.
This article was written for Business 2 Community by Michael Ugino.
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