Walmart & Amazon Compete for Third-Party Sellers

What happens when a big box retailer thinks outside of that box? We’ll soon find out, as retail giant Walmart is facing off against rival Amazon by making an effort to attract third-party sellers in order to beef up its online presence.

The announcement was made during Walmart’s first-ever Marketplace Seller Summit, “Let’s Grow,” on Aug. 30, 2023. Amazon announced new third-party initiatives of its own that same day, making one thing clear: a battle is brewing.

For Walmart, Imitation is the Sincerest Form of Flattery

The secret to Amazon’s success is pretty straightforward: build an E-Commerce platform, open it to third-party sellers, offer logistics and fulfillment services to those sellers, and sell them ads to boost their visibility in a crowded marketplace filled with competitors.

Taking a page from the Amazon playbook, Walmart’s strategy is basically the same. To boost its third-party fulfillment business, Walmart Fulfillment Service (WFS) — itself a copy of Amazon’s Fulfillment By Amazon (FBA) — the retailer will begin offering branded store pages for third-party sellers, as well as local pickup and delivery services from sellers’ physical stores…two services that have been available to Amazon sellers for years. Additionally, sellers will be able to ship bigger and bulkier items, such as canoes and trampolines, and multi-box items like patio sets. They will also have access to Walmart’s technology that allows for curbside pickup and last-mile delivery services.

Other changes include expanding its marketplace outside of North America, offering service to Chile in early 2024, and adding automation to more warehouses and stores.

While these moves are hardly original, Walmart does have one ace up its sleeve: its network of 4,600 brick-and-mortar stores. There’s a lot to be said for shopping from the comfort of your own home, but being able to order online and pick up from a physical store nearby is an appealing compromise for many consumers.

Amazon Isn't Resting on its Laurels

Amazon’s efforts to strengthen its logistics business include integrating its “Buy With Prime” app with Shopify, a move that will make it easier for Shopify merchants to sell directly to Amazon Prime members through its fulfillment network — a new initiative also announced (perhaps not coincidentally?) on Aug. 30.

The collaboration benefits both Amazon and Shopify, as well as consumers. Third-party sellers will have access to new business opportunities, saving time and resources in the process, while offering Prime members additional savings on products they purchase.

While Amazon still holds a commanding lead in the E-Commerce marketplace — its 38% share of online sales in 2022 far outpaces Walmart’s 7% — moves like these indicate we may be in for a prolonged chess match.