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Is Walmart Dropshipping really profitable?
💡 Quick Answer: In 2023, Walmart dropshipping can be a very profitable venture due to a few key factors. Firstly, the e-commerce market is expected to continue growing at a rapid pace, with more and more consumers turning to online shopping for convenience and a wider selection of products. By dropshipping through Walmart, sellers can tap into this growing market and reach a large audience of potential customers. Additionally, Walmart's reputation as a trusted and reliable retailer can also help attract more customers to the products being sold through their platform. Furthermore, the cost of goods sold can be reduced as the sellers don't have to keep inventory or worry about shipping. All these factors make Walmart dropshipping a potentially lucrative opportunity for those looking to start an online business in 2023.
If you’re looking for a lucrative new sales channel for your dropshipping business, Walmart could be it.
In 2021, Walmart generated $75 billion in online sales. That’s nearly 7% of total US eCommerce sales.
You can sell products to a huge audience. And Walmart is less competitive than Amazon.
In this guide, you’ll learn whether Walmart dropshipping is worth it and everything you need to know to get started.
Let’s dive in.
What Is Walmart Dropshipping?
Walmart dropshipping is the process of selling dropshipping products on Walmart’s marketplace. You can register as a marketplace seller and create listings for your products. When a customer makes a purchase, your dropshipping supplier handles the packing and shipping of the product.
How Does Walmart Dropshipping Work
Before we get to the different ways you can sell on Walmart, it’s important to make one thing clear.
You can sell dropshipping products on Walmart.com.
But you are not allowed to dropship Walmart products on other platforms.
According to Walmart’s Terms of Use, reselling Walmart products on your eCommerce store or third-party platforms and using Walmart to ship directly to your customers is prohibited.
But there are legitimate ways to make money with Walmart dropshipping.
3 Ways to Dropship With Walmart
There are three different ways to dropship with Walmart.
1. Become a 3P Walmart Seller
Dropshipping on Walmart is the most viable option. After finding a product on the SaleHoo Directory, you can list the item on the Walmart Marketplace, and the supplier will handle the shipping when you make a sale.
This is the fastest and cheapest way to get started with Walmart dropshipping.
2. Become a Walmart Supplier or Drop Ship Vendor (DSV)
You can apply to become a registered Walmart supplier and act as manufacturer or wholesaler of goods.
This method involves buying in bulk and shipping your products to Walmart warehouses. Once you’ve agreed on wholesale prices, Walmart purchases your goods and sells them on its website.
You can also apply to become a Drop Ship Vendor (DSV). This is similar to becoming a Walmart Supplier. However, instead of shipping your goods to a Walmart Fulfillment Center, you will be responsible for sending items to Walmart customers.
As a Walmart DSV, you are paid a fee to cover the shipping cost when Walmart sells one of your products.
Both of these options involve selling to Walmart rather than consumers.
3. Resell Walmart Products
Reselling Walmart products directly from the marketplace is prohibited. But you can get around this rule.
Instead of shipping from Walmart directly to your customers, you can have the product shipped to your address. Then, when you make a sale, you send the item to your customer. This is known as a retail arbitrage method.
The downside is that it is a much more hands-on approach than the traditional dropshipping eCommerce model.
What Is a Walmart Drop Ship Vendor?
A Walmart Drop Ship Vendor (DSV) is a Walmart supplier that ships goods directly to customers. Walmart Drop Ship Vendors are responsible for the fulfillment process, but goods are sold under the Walmart brand name.
To become a DSV, you’ll need to meet Walmart’s requirements, including:
- A registered business address
- US business tax ID
- W9 or W8 and EIN Verification Letter from the Department of Treasury
- Insurance documents
- Product safety and compliance testing documents
You can find out more about the application requirements on the Walmart Supplier Help Center.
Pros & Cons of Walmart Dropshipping
Walmart’s online marketplace has seen massive growth over the last couple of years. The platform currently generates around 235 million organic visitors per month:
That’s a vast market of online shoppers you can sell to.
While it’s smaller than Amazon, Walmart does have some key advantages for dropshipping.
Let’s take a look at the pros and cons.
Pros
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✅ Less Competition
You have a much higher chance of claiming the all-important Buy Box, a highly coveted Add to Cart button that lets shoppers purchase something very quickly and easily, on Walmart than you do on Amazon.
In 2021, the number of active sellers on Walmart hit 126,599.
On Amazon, the number of active sellers is over 1.5 million.
Less competition can mean more sales.
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✅ No Upfront Costs
It doesn’t cost anything to register as a seller on Walmart. You only need to pay a referral fee when you sell an item.
Compared to Amazon, the fee per sale is typically lower too.
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✅ Large Range of Product Categories
There are currently 24 main product categories on Walmart, with even more subcategories.
As long as your niche doesn’t involve Prohibited Products, you’ll be able to find the right category for your dropshipping products.
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✅ Brand Reputation
You can leverage consumer brand recognition and trust in Walmart to increase sales.
People know the Walmart brand, and they are comfortable spending their money in-store and online with the retailer.
Cons
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❌ Extended Application Process
The application process to become a Walmart seller isn’t easy.
Once you’ve sent your application, it can take a couple of weeks for a response. The onboarding process can take an additional few weeks after that.
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❌ Strict Seller Rules
Walmart is quite strict when it comes to Seller Standards.
There are rules around pricing, and if your seller rating drops below Walmart’s standards, you could find yourself removed from the platform.
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❌ Low-Profit Margins
Because of Walmart’s strict pricing rules, the profit margin per item can be lower than other platforms.
Walmart will remove a listing if a product is listed at a higher price than shoppers can find elsewhere.
Walmart dropshipping has its pros and cons. But there are lots of entrepreneurs making money with the platform.
How to Dropship on Walmart (Step-by-Step)
Now we’ve covered the basics, let’s take at how you can get started with Walmart dropshipping.
Here’s the step-by-step process to becoming a Walmart Marketplace seller.
1. Find Dropshipping Products to Sell
The fastest way to find lucrative dropshipping products from reliable suppliers is in the SaleHoo Directory.
You’ll find over 2.5 million products from 8,000+ pre-vetted suppliers.
It’s easy to search the product database, and you can see the potential profit margin for each item.
Walmart has strict quality guidelines and Seller Standards, so you’ll need to make sure your products are well-made, and your suppliers are reliable.
With the SaleHoo Directory, all suppliers are pre-vetted. So you don’t have to worry about a high return rate or poor-quality merchandise.
Later in the guide, we’ll look into what makes a good dropshipping product.
2. Register to Sell on Walmart
Once you’ve found the right products, the next step is to apply to become a seller on the Walmart Marketplace.
Head over to Walmart Marketplace and click on “Request to Sell” to get started.
You’ll need to enter your eCommerce business details, including your business tax ID, registered business address, and other company information.
On the next page, you’ll need to enter details about your product categories and your average eCommerce revenue.
The final step is to provide details on your shipping arrangements.
There’s also an option to include a short note on why you would be a good candidate for the Walmart Marketplace.
3. Complete the Onboarding Process
If your application is successful, you’ll receive an email with a confirmation link within a couple of weeks.
The email link will take you to the Walmart Marketplace onboarding process.
You’ll need to provide your tax information, confirm your business details, and agree to the Walmart Marketplace Terms of Use.
This is also where you set up payment information. Walmart currently offers Hyperwallet and Payoneer as payment methods for marketplace sellers.
Once you’ve set up payment, you’ll need to upload your product inventory and set up your listings.
Later in the guide, we’ll go into what makes a good product listing.
You’ll also need to create your Walmart Partner Profile. This includes your brand name, logo, and other details that shoppers will see when clicking on your product listings.
If you need some help with the branding for your Walmart Partner Profile, check out the resources below.
4. Start Selling
When everything is set up, the only thing left is to start selling and fulfill orders.
You’ll need to pay attention to your performance metrics to see how your products are doing.
The Walmart sellers dashboard can show you insights into sales data and help you avoid falling below Seller Standards.
How to Dropship From Walmart to eBay or Amazon
You cannot currently dropship from Walmart to other marketplaces like Amazon and eBay. This goes against Walmart’s Terms of Use, and you risk orders being canceled and your account suspended.
Both Amazon and eBay also have dropshipping guidelines prohibiting direct reselling from other retailers.
How to Dropship From Walmart to Shopify
You can sell the same dropshipping products on both the Walmart Marketplace and Shopify. The easiest way to get started is to use a Shopify app like Walmart Integration.
This Walmart dropshipping automation app lets you import your products directly from Walmart to your Shopify store.
Walmart Integration also offers near real-time sync so that you can make sure inventory and pricing are aligned between Walmart and your eCommerce store.
It’s important to note that these apps are designed to help you sell your dropshipped products on both platforms. Dropshipping from Walmart on your Shopify store is not allowed.
If you try to dropship Walmart products on your Shopify store, you’ll break Walmart’s Terms of Use.
Tips for Walmart Dropshipping
Optimize Your Product Listings
Like Amazon and Google, Walmart uses algorithms to determine which listings appear at the top of search results when a shopper searches for a product.
To increase your chances of claiming a top ranking, you need to optimize your product listings.
Here are the most important factors for Walmart product listing SEO:
Product Titles
Walmart uses product titles to determine the relevance of the listing to the customer search query.
Product titles also have a significant impact on clickthrough rate.
You have a maximum of 75 characters to describe your product in a way that appeals to shoppers and the Walmart algorithm.
A good strategy is to use the following formula:
Brand + Item Name/Model + Features + Style
As you can see in the above example, the formula provides all the need-to-know details and hits the right keywords.
Product Images
Product images are one of the first things that shoppers see on a search results page.
You can make your listing stand out and increase clickthrough rate with a professional-quality product image.
One of the most effective ways to increase clicks and sales is to show the product in use.
You should also have supporting images showing the product from different angles.
All the products featured in the SaleHoo Directory include high-quality images that you can use in your Walmart dropshipping store.
Product Descriptions
The product description is an opportunity to include target and secondary keywords to increase your reach and ranking in search results.
But you should write descriptions for shoppers first.
If a shopper has clicked on your listing and started to read the product description, they are close to making a purchase.
You can increase conversions by leading with the benefits. What can your product help people to do?
Like the example above, lead with benefits and follow up with a bullet list of the features.
You can find out more about product listing optimization in the resources below.
Choose the Right Products
There’s less competition with Walmart dropshipping, but you still need the right products to generate sales.
Before you add a product to your Walmart store, you should verify customer demand.
Paid keyword research tools like Ahrefs can show you the number of people searching Google and Amazon for the product each month. You can also see the interest over time.
In the example below, you can see the search volume for “kids play kitchen” is seasonal and rises each year during the holiday season.
A free alternative tool to research customer demand is Google Trends.
You can see the search volume over time to judge whether there is enough interest to make a product viable for Walmart dropshipping.
Check out the resources below for more help on choosing a dropshipping product.
Meet Walmart’s Customer Service Expectations
Walmart is one of the biggest retailers in the US and is known for its fast shipping and great customer service. It has strict third-party Seller Standards to protect its brand.
You’ll need to make sure you meet Walmart’s performance expectations to avoid being removed from the platform.
This can include meeting expected delivery dates, refund rates, and more. You can find out more about Seller Standards on the Walmart Knowledge Base.
It’s important to meet customer expectations. It takes longer for most dropshipping products to arrive with customers, so you need to be upfront about estimated delivery dates.
Track Your Performance
Walmart provides a useful dashboard to help you evaluate your performance and get insights into your sales data.
You can see sales analytics and a breakdown of each product you sell on the platform, including customer reviews.
One of the most important things to keep an eye on is the Seller Scorecard.
This shows you the metrics that Walmart uses to judge seller performance.
Comparing your metrics to the Seller Standards lets you see if you’re meeting the required levels or if you need to improve.
Sell on Multiple Platforms
Walmart is a great place to sell your dropshipping products. But it shouldn’t be the only platform you use.
The Seller Standards can be very strict regarding returns, cancellations, and other infractions. If you put all of your efforts into growing your Walmart presence, you can lose everything in one go.
Diversifying your revenue streams makes your business model more robust. Think about using multiple platforms and creating a standalone eCommerce store using Shopify or WooCommerce.
You can learn more about places to sell dropshipping products in the resources below.
Walmart Dropshipping FAQs
Walmart does allow dropshipping. You can become a 3P marketplace seller and have a third-party handle the fulfillment process.
But Walmart does not allow resellers. For example, you cannot dropship Walmart products on a third-party website or platform.
There are a few ways to make money selling on Walmart Marketplace.
The first option is Walmart dropshipping.
You can become a 3P seller on the Walmart Marketplace and dropship products. With 3P selling, you are in control of the listing and fulfillment of your products. When a customer makes a purchase, your dropshipping supplier handles the packing and shipping.
The alternatives are to become a Walmart Drop Ship Vendor or a Walmart Supplier.
As a Walmart Supplier, you act as a wholesaler and ship your products in bulk to a Walmart warehouse. Walmart will then control the entire selling process, handling the listing, shipping, and returns.
As a Walmart Drop Ship Vendor, you remain in control of the shipping of the products. But Walmart controls everything else, including listing optimization and product pricing.
The Walmart Drop Ship Program is generally for large manufactures and wholesalers. You will need to be invited to join by a Walmart representative after selling on the marketplace. Becoming a 3P Walmart Marketplace seller is a better option for most online entrepreneurs.
It’s free to apply to sell on the Walmart Marketplace and create a store. The only cost involved is referral fees when you sell your products on Walmart’s platform.
Walmart dropshipping fees are similar to the cost of dropshipping on Amazon. You can expect to pay a fee of around 10%-15% of the item price, depending on the product category.
How to Dropship From Walmart in 2023
Walmart dropshipping can be a lucrative revenue stream for beginners and more experienced eCommerce sellers looking to expand.
It’s a well-known retailer with a huge customer base. But the standards for sellers are high.
You’ll need reliable suppliers and high-quality products. That’s exactly what you’ll find on the SaleHoo Directory.
We pre-vet all suppliers in the directory to save you time and money.
Are you planning to get into Walmart dropshipping in 2023?
Let us know your plans in the comments section below.
