Walmart, Inc. recently announced that it has removed all rules that require sellers on its marketplace website to be registered in the US. The move is an attempt to close the e-commerce gap with Amazon.com. The removal on registration will likely favor Chinese manufacturers the most.
Sellers on Walmart’s marketplace website are no longer restricted to those registered inside the US. Non-US vendors can now compete for a space on the company’s third-party marketplace. It’s expected, though, that this segment of new sellers will make up only a fraction of Walmart’s total seller population.
“We have strong relationships with many reputable companies around the world and we have some of the most rigorous seller requirements in the industry,” Walmart said in an emailed statement. “As a result, we are opening our US marketplace to a limited number of international companies who share our commitment to customer trust and safety.”
Walmart made the move to expand its marketplace and diversify the services that branch of it. The move also helps the company generate profits by selling advertising space on its websites. Note that Walmart began offering fulfillment services for its marketplace sellers last year, a move that Amazon made over a decade ago.
Chief Executive Officer Doug McMillon has said that Walmart’s marketplace business is a “huge opportunity” for the retailer, and in February told investors that Walmart would make a “greater push” to expand new services like fulfillment.
It’s likely that Chinese manufacturers will benefit the most from Walmart’s latest decision. These manufacturers have looked upon US marketplaces as a popular way to reach American customers for years now.
According to researcher Marketplace Pulse, nearly 40 percent of all Amazon marketplace sales to US shoppers come from Chinese merchants. In January, Chinese merchants represented 75 percent of new Amazon marketplace sellers, the firm found, and Walmart will likely see a similar ratio.
Brand Focus Digital acknowledges Walmart’s latest move. We believe that the company’s announcement shows that the retailer is positioning itself to better compete with Amazon in the U.S. While Walmart still has some work to do to emerge as a head-to-head competitor with Amazon, the company is becoming better positioned to do so than any other competitor out there.
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