Walmart has seen a flurry of product launches in their Marketplace since the start of 2020. In addition to their Free 2-Day Shipping program (launched 2019), they added Walmart Fulfillment Services (WFS) and 3-Day Shipping this year.
With the growing fulfillment options available to sellers on Walmart Marketplace, these are some ways to think about using each to diversify your Walmart business.
Walmart Fulfillment Services (WFS)
To determine if WFS is a good fit for your business, consider your cost to store, pick/pack, and ship items against the inbounding ship cost, storage, and per order fulfillment costs of using WFS. You should also factor in conversion lift on order volume to find the point where overall profit is maximized.
Once you have found your profitability breakpoint, you should then consider order velocity. Start with high velocity selection that would benefit from a boost in search relevancy and Buy Box prominence. Positive search results and conversion tend to build on themselves, so establish a regular inbounding schedule and make changes as demand warrants.
Pro tip: Avoid locking up slow-moving inventory in WFS, relying upon the seller-fulfilled options to generate sales on your long-tail selection. To learn more about the benefits of WFS, check out our overview here.
Walmart Free 2-Day Shipping
If you meet the requirements to participate in this program, Walmart 2-Day Shipping program may either be your primary method for offering selection on Walmart’s marketplace, or a feeder and backstop to your WFS program.
A brand or reseller selling on Walmart’s marketplace must consider the Free 2-Day program given the boost to search relevancy associated with the 2-Day search filter, Buy Box premium, and conversion lift.
Even if you do not have a wide fulfillment network, you should still consider Walmart 2-Day as part of your Walmart Marketplace business. The associated lift in conversion correlates to increased sales, so even offering it in limited regions could provide incremental order volume over 3-Day and standard delivery options.
Walmart Free 2-Day Shipping program could also give you the ability to:
- Identify high velocity ASINs for WFS. Demand generated from your 2-Day offerings will also provide insight into which products (SKUs) will respond well to inclusion in WFS. These insights may help you avoid unnecessary inbounding and storage fees. generated from your 2-Day offerings will also provide insight into which products (SKUs) will respond well to inclusion in WFS.
- Backstop your WFS selection. Even an optimized inbounding schedule may experience listing delays. By maintaining a 2-Day program, you can quickly list a competitive offering ensuring uptime for your listings.
- List WFS Ineligible items. If your selection is too large/heavy for WFS, or contains hazardous materials, Free 2-Day may be the only option for obtaining the search and conversion benefits available in Walmart Marketplace.
- Generate your own carrier order volume. The ability to obtain your own competitive carrier rates provides independence and flexibility in growing your ecommerce business. By offering Free 2-Day selection, you can leverage the increased search relevancy and conversion to help grow carrier order volume.
Once you have established your Free 2-Day assortment and regions, your focus should shift to 3-Day.
Benefits of 3-Day Shipping
In a recent webinar, Walmart shared data showing an organic 30% lift in conversion of a 3-day listing over a 5-day listing, assuming price and cost of shipping are unchanged.1 Understanding the importance of this as a purchasing driver, Walmart has added 3-Day to their seller-fulfilled marketplace programs.
The new program provides a boost to Buy Box prominence, giving you a possible edge on similar offers with a standard 3-5 day promise, if you also offer free shipping.2 Walmart Free 2-Day has the possibility for a similar boost, with the added bonus of a search filter which can lead to more traffic and improved search ranking.3
Right now there are no qualifications to take advantage of these benefits, however you do need to have the ability to support zero lag time and same-day shipping for orders received prior to 2 pm in your local time zone. Enabling the program requires some simple changes to your Shipping Settings in Seller Center, where you can include the entire catalog, or exclude a portion via shipping overrides.
Where does 3-Day fit? To answer this, start from the high-level goal of offering the shortest delivery promise possible while maintaining profit margins. With that framework, you can diversify your selection across the full suite of Walmart Marketplace’s programs.
With 3-Day, you can continue to expand your expedited delivery coverage beyond 2-Day while applying the cost considerations described above. What you lose in search filtering and badging on the detail page with 3-Day, you gain in extended program reach and ease of implementation. Where your Free 2-Day region ends, your 3-Day region should begin.
By overlaying these three programs, you can create a nationwide Free 2-Day program with optimized expedited shipping regions spreading out from your fulfillment locations.
Finding the outer boundary of your 2-Day and 3-Day regions will impact the cost to ship, and ultimately the profitability of participating in WFS and Walmart’s Free 2-Day and 3-Day programs. Our CommerceHub ecommerce experts can help you determine what the best approach is for your business. Contact us.