Walmart Adds Fulfillment Services for Third-Party Vendors

What is Walmart Fulfillment Services?

If you’ve ever used FBA, then you’ll be familiar with what Walmart is rolling out to its third-party vendors with its Walmart Fulfillment Services, or WFS.

WFS handles order fulfillment, customer service, and provides sellers with a dashboard to track inventory and other account-related metrics.

Like Amazon’s FBA, Walmart Fulfillment Services, or WFS, will enable third-party sellers to not only gain more visibility on the ecommerce site, but sellers will also be able to streamline their operations for Walmart further.

Those sellers who are expanding out of Amazon and onto other marketplaces will be able to reduce their own warehousing and logistical needs.

Learn more about Walmart Fulfillment Services from their website.

Here are some other benefits of Walmart Fulfillment Services:

  • Improved customer service with faster delivery, easy returns, and good customer service
  • Save money with simple pricing and no hidden fees
  • Track inventory, orders, and shipments with Walmart’s Dashboard
  • Get higher search placement and visibility with Buy Box and Two Day tags, along with more control over item page
  • Streamline returns and omnichannel free and easy returns (return online or at the store)
  • Personalized support from a WFS expert
  • Nationwide coverage with 2-day delivery

Why use WFS?

Sellers who use FBA know why a fulfillment service can be powerful: it reduces the need for employees to spend time handling support and order fulfillment.

Many sellers look to diversifying their marketplaces so that an incident, like a suspension, on one marketplace won’t drastically affect their business. But one obstacle to Walmart was the need to handle order fulfillment and customer service, aspects of a business that can be extremely labor-intensive and costly.

WFS provides roughly similar benefits to FBA, and just as importantly, WFS will allow sellers with limited warehouse space and technology to expand to a big marketplace like Walmart.

WFS and FBA are very similar in that both programs offer sellers the ability to offload their customer support, allowing Walmart and Amazon to handle customer service (questions, refunds, and returns).

Here are some possible advantages to WFS over FBA:

  • Customers can return their purchases to a Walmart store
    • As of March 2020, there are roughly 4 times more Walmart stores (4,769) than Kohl’s stores (1,158), making returns more convenient for customers
  • Fixed monthly storage fee and fulfillment price based on shipping weight alone (with exceptions for apparel and hazmat items)
  • Customer support for sellers from WFS associates

WFS Restrictions

Like FBA, there are some restrictions for WFS that will turn away some sellers. Those are:

  • Products must ship from within the US
  • No perishable or regulated products
  • Maximum product weight is 30 pounds
  • Maximum product dimensions of 25″ x 20″ x 14″

The biggest of these restrictions is the first one: sellers won’t be able to ship from their factory out of the country straight into Walmart as they can with Amazon. This may help curb some of the rampant listings of Chinese products on Walmart.

Conclusion

Ultimately, sellers on Amazon will find it easier to migrate to an additional platform like Walmart. Previously, the need to handle warehousing, customer support, and other fulfillment logistics made selling on Walmart an obstacle, especially for the millions of smaller Amazon sellers.

Businesses will have to manage two different fulfillment services, so there’s likely room for mistakes and confusion, but once the confusion from adoption is resolved, sellers are likely to increase their sales with less work thanks to WFS.

Sellers who are already using FBA can easily expand to Walmart’s marketplace, and considering how ubiquitous Walmart is in the United States, the appeal to sell on Walmart through WFS will be very strong for all sellers if Walmart can make it work.

What is Just In Time (JIT) Fulfillment?

Most sellers on eBay and Amazon are familiar with retail arbitrage and drop shipping models of fulfillment. But just in time fulfillment is a fulfillment and inventory management model that may be more attractive to some sellers.

Like drop shipping, just in time fulfillment allows sellers to quickly expand their product catalog without large investments in inventory or warehouse space. Unlike drop shipping, just in time fulfillment gives sellers more control over the product that customers receive.

We’ll go over the advantages and disadvantages of JIT fulfillment in this article.

What is just in time fulfillment?

With JIT fulfillment, merchants place the order with their suppliers only when a customer places an order with the merchant.

For instance, you’d list an item for sale on your own website or another marketplace like eBay or Amazon. When a customer purchases that item, you turn around and place an order from the supplier. But you have that item shipped to you for repackaging before you ship it to the customer.

This fulfillment strategy is different from drop shipping because items are delivered to the merchant, not directly to the customer. JIT fulfillment allows for several advantages, as we’ll see below.

Pros

  • No need to store and process large amounts of inventory
    • Fewer issues related to stockouts, expirations, or deadstock
  • Lower capital investment needed because there’s no need for bulk inventory purchases and storage
  • Flexible cash flow because of reduced inventory and storage requirements
  • Can easily expand product offerings since inventory storage isn’t needed
  • Some marketplaces have strict requirements about drop shipping, so JIT fulfillment allows merchants to abide by marketplace dropshipping rules
  • Since you’re repackaging the product, you can remove all documents with the supplier’s information and include your own
    • This can mean marketing material, packing slip, invoices, or any other document that identifies the supplier
  • Ensure that the customer receives the product he ordered in the condition that he ordered it

Cons

  • Need strong relationships with vendors in order to fulfill orders on time
    • Poor relationships can lead to canceled orders, long shipping times, or other mistakes
  • Usually lower profit margins than drop shipping since there’s an extra shipping step involved (from supplier to you and then from you to customer)
  • No control over the fulfillment process from the supplier to you
    • Potentially longer shipping window
  • You’ll need to monitor your prices carefully and adjust for the fluctuating prices from your suppliers and for increasing shipping costs

There are many reasons why the JIT fulfillment model is better than drop shipping. Perhaps the biggest reason is that JIT fulfillment meets one of Amazon’s requirements about drop shipping: that you identify yourself as the seller on the packaging and inserts.

When you drop ship an item, you don’t have control over what the supplier does, but with JIT fulfilment, you’ll be able to remove all supplier information and put your own materials in there.

For instance, if you drop ship from a distributor to Amazon and the distributor sends the customer the product in its own branded box and inserts, your account would be put at risk for violating Amazon’s drop shipping policy.

Drop shipping isn’t as lucrative today as it was a few years ago. Many consumers today know about Alibaba, Aliexpress, or any number of Chinese websites selling consumer goods for super low prices.

In fact, many of those same Chinese suppliers now sell on eBay and Amazon, so you may be competing directly with them. This can really hurt you if they suddenly increase prices to force out their competition and harm your metrics.

In addition to competing with the suppliers themselves, perhaps hundreds of courses, workshops, and self-proclaimed Youtube gurus have pitched drop shipping as the next “get rich quick” business idea.

Just in time fulfillment allows you to better control the product and process for your customer, but it’ll cost you extra in shipping and time. Consider JIT fulfillment if you’re also considering drop shipping to see what works best for your business model and goals.

Learn about eBay Fulfillment or Managed Delivery

eBay’s fulfillment service, called Managed Delivery, will be a huge benefit for many sellers. Like Fulfillment by Amazon (FBA), Managed Delivery will save sellers a lot of time from having to pick, pack and ship.

This means more time can be spent on other important aspects of the business, like sourcing. We’ll go over what we know about Managed Delivery in this article.

How does Managed Delivery work?

Unlike FBA, eBay will partner with other partners in order to provide fulfillment for sellers.

Partnering with other services allows eBay to expedite the rollout for Managed Delivery and keep costs down. But having different fulfillment partners can cause some inconsistencies for sellers.

Like FBA, sellers will send their inventory to the warehouse. When the item sells, the partner fulfills the order using eBay-branded packaging.

A list of partners is not available at this time, but sellers can expect that more information about these partners as the launch date nears. More fulfillment partners will be added as the service scales up.

What are the costs?

eBay hasn’t provided a preview of the fees at the time of this article, but sellers will be able to see what the fees are closer to launch date, which is expected to be sometime next year in 2020.

eBay claims that the pricing will be competitive, so it’s likely to be similar to Amazon’s FBA pricing.

What are the benefits to sellers?

Managed Delivery appears to be modeled after Amazon’s FBA service. In fact, if you currently use FBA, then the benefits of Managed Delivery will be familiar to you.

Here’s how sellers can expect to benefit:

  • Lower fulfillment costs for 1-, 2-, and 3-day delivery because of eBay’s rates
  • Same seller protections that Top Rated Sellers have
  • Remove neutral or negative feedback related to INAD, stock out, and INR so long as seller meets eBay’s performance metrics
    • Seller protections that include customer returns that are opened, used, or damaged with ability to offer up to 50% partial refund
    • Ability to report false INAD claims and receive credit for return shipping cost
  • Simplified and faster shipping
    • Warehouses located across the United States for faster delivery times and lower shipping costs
  • Increased listing visibility
  • Save on storage space
  • Save on labor from having to pack and ship individual orders
  • eBay-branded packaging

What are the benefits to customers?

Customers will also see some benefits from Managed Delivery.

In many ways, customers will have a much more consistent experience since eBay sellers can sometimes have poor packaging processes.

These benefits are:

  • Faster delivery times with tracking
  • More sellers offering free shipping
  • Quality packaging
  • Better customer support

Conclusion

eBay’s Managed Delivery service is a great way for sellers to reduce the labor related to storage and shipping. Combined with FBA, any extra costs associated with fulfillment can be offset by reducing warehouse space and labor.

But there are still some questions that aren’t addressed. For instance, FBA sellers know that mistakes happen on inbound shipping and receiving. Those mistakes can lead to lost or damaged inventory, and Amazon has a system in place for investigating and reimbursing sellers.

But with partners, who will be the one to reimburse sellers when inventory is inevitably damaged or lost at the warehouse? And how will sellers go about requesting reimbursements for mistakes?

Will fulfillment partners also be able to offer a la carte services that some sellers want? For instance, Amazon offers a label service, while other third-party fulfillment services offer packaging, inspection, and kitting for an extra fee.

Still, the ability to reduce time spent packing and shipping will be a benefit to many larger sellers even if they still have to prep inventory.

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Use Shopify Fulfillment Network to Fulfill Orders!

Shopify store owners will now have more fulfillment options when it comes to fulfilling their customer orders!

Shopify is allowing select merchants access to the Shopify Fulfillment Network, which is powered by machine learning to identify the nearest fulfillment centers and ideal inventory levels to get orders to customers faster.

To apply for Shopify Fulfillment Network, simply click on the Shopify link to log into Shopify and apply. You’ll receive an email about your application within 48 hours.

Is Shopify Fulfillment Network better than other fulfillment options?

No doubt you’re wondering if Shopify’s network of fulfillment centers is better than alternatives like Amazon FBA or third-party fulfillment centers.

It’s likely that Shopify’s fulfillment centers will get orders to customers faster than other networks because of Shopify’s native integration and technology.

And with the network of fulfillment centers powered by machine learning, customers will receive their orders faster than any private third-party fulfillment service can provide. That’s because Shopify has access to critical metrics and data that may not be available to other parties.

Sellers who use Amazon FBA to fulfill Shopify orders know that Amazon sometimes takes days before shipping out multichannel fulfillment (MCF) orders.

Not only does Amazon take a bit longer to fulfill MCF orders than its own marketplace or Prime orders, but they also charge more for MCF.

Delays in order fulfillment can drive customers away from marketplaces, including your Shopify store if customers are waiting too long for their products.

With Amazon’s move to 1-day shipping, customers will now, more than ever, expect to have their orders within a few days, if not sooner.

Here are some of the benefits of using Shopify Fulfillment Network instead of another service:

  • Faster delivery times because of technology maintaining inventory levels and identifying nearby fulfillment centers
  • Improved customer satisfaction due to faster delivery
  • Possibly lower fees compared to other service providers like Amazon FBA

If you’ve stayed away from third-party fulfillment services or Amazon FBA for your Shopify store because of inconsistent service, then consider Shopify’s fulfillment services.

You may be able to reduce your own labor and storage expenses while increasing your customer satisfaction and loyalty metrics. The result? Lower operating costs and increased sales.

Even if you’re not going to use Shopify’s fulfillment centers and technology, having increased competition will keep prices low and increase customer satisfaction. As a seller on Shopify and potentially other marketplaces, you’ll only benefit from a new competitor to the field.

Learn more about the announcement from Shopify.

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UPS eFulfillment vs. Amazon FBA for Order Fulfillment

Interested in UPS’s new eFulfillment service? The service allows you to fulfill orders for 21 marketplaces, including major ones like Amazon, eBay, Etsy, Shopify, and Walmart!

Features and services are likely to change. Please check the UPS eFulfillment website for latest pricing and features, as figures used in this article may have changed.

Let’s take a look at the features of UPS eFulfillment and how the costs compare to Amazon FBA.

Benefits of UPS eFulfillment

  • Manage inventory and orders in one place
  • Same-day fulfillment up to 5pm on 1-day, 2-day, and 3-day service
  • Supports 21 marketplaces, including Amazon
  • Simple, bundled pricing

Costs

At the time of this article, UPS charges $0.93 per cubic foot per month for storage based on size and average inventory.

In addition to storage costs, rates are divided into three zones, A, B, and C, and fulfillment costs are based on weight. Take a look at the costs for UPS eFulfillment.

For example, the price for two-day shipping for a 1 pound item to zone A is $8.19 ($7.84 base rate + $0.35 per pound).

Shipping to Canada is also available.

UPS currently has a 60-day trial where the minimum monthly fee of $1,000 is waived. Once that trial period ends, users will pay whatever their shipping fees and storage costs are for the month OR $1,000, whichever is higher.

With our sample shipping cost of $8.19, you’d have to ship approximately 4-5 orders per day to go above the $1,000 monthly minimum.

Amazon FBA vs. UPS eFulfillment

Costs will vary based on what products you’re selling and how long they sit before they sell.

To start, Amazon’s storage fees begin at $0.69 per cubic foot and go to $2.40 per cubic foot during Q4 for standard-sized products. You’ll also have increased rates for long term storage (after 365 days).

UPS doesn’t have a long term storage fee, nor is there a higher storage fee for Q4. The rate of $0.93 per cubic foot per month is fixed.

To fulfill an order for an iPad Mini 4 case, FBA costs $2.41. Amazon shoppers generally expect fast delivery, and Prime members usually get 2-day shipping.

UPS eFulfillment would cost $8.19 for the same 2-day service.

The difference in cost is significant for smaller and lighter items. But heavier items shipped through UPS may be cheaper, depending on the location.

For instance, a 20-pound tire that measures 25 in x 25 in x 9 in would cost $15.10 to fulfill through FBA (small oversize rate of $8.26 + $0.38 per pound above the first 2 pounds).

UPS eFulfillment would cost $14.84 for 2-day shipping to Zone A.

Of course, there are other considerations. For instance, FBA handles all customer service, but some sellers may prefer handling customer service for more complex products.

Conclusion

There are other considerations when deciding on a fulfillment service like inbound shipping costs, removal fees, and other processes like damage and lost products at the warehouse.

Do the calculations to see if using UPS eFulfillment makes sense for your business.

Even if the fulfillment and shipping fees are slightly higher, sellers on multiple marketplaces may still save money overall by using one integrated service.

Don’t forget that you can still use Amazon to fulfill orders from other marketplaces through Amazon’s Multichannel Fulfillment service (MCF).

Streamlining your fulfillment to one service may actually save you money. Your employees won’t have to learn multiple processes. As a result, you’ll make fewer mistakes due to having one service provider instead of multiple ones.

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