Walmart Now Will Let Non-U.S. Vendors In Its Marketplace

Shoppers wearing protective masks leave a Walmart store in Lakewood, California, U.S., on Thursday, … [+] July 16, 2020. Walmart Inc. will require customers to wear masks in all of its U.S. stores to protect against the coronavirus, an admission that the nation’s pandemic has reached new heights and setting up potential confrontations with customers who refuse to don them. Photographer: Patrick T. Fallon/Bloomberg

Management of Walmart has changed its mind. It has removed the rule that required sellers on its marketplace to be registered in the United States. Now, foreign sellers can sell their wares on Walmart’s website as well.

It is a clear effort to be more competitive with Amazon

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and, at the same time, tap into China’s vast network of manufacturers. Now vendors will be screened by Walmart’s global trust and safety team to prevent the listing of items that are not safe or ethical. At this stage, the new sellers will make up only a fraction of Walmart’s total seller group since the initial vendor population was based in the United States. But that will likely change quickly.

Business of Fashion reports that Chinese manufacturers pursue entry into U.S. marketplaces as a popular way to reach American customers. Nearly 40 percent of all Amazon marketplace sales in the United States come from Chinese merchants. 75 percent of new sellers on Amazon are Chinese vendors. It is expected that Walmart will find a similar ratio as it proceeds with an open door to foreign manufacturers.

As its marketplace opens, it will give Walmart customers more affordable prices on a greater selection of merchandise that now dominates Amazon’s best seller list. We will watch the competition heat up.

In 2021, it is expected that global sourcing will be about $532 Billion. It is expected that 60% of this amount will be sourced by Amazon. Goods sold by Amazon usually are charged 15% commission plus any warehouse storage and delivery charges. Doug McMillon, CEO of Walmart, has said that Walmart’s marketplace business is a huge opportunity for the company, and at the meeting in February told investors that Walmart would make a greater push to expand new fulfillment. 

Recently, John Furner, President & CEO of Walmart U.S., made a commitment to invest $250 Million in products made, grown, or assembled in America. He wants to find great new products that are sourced locally. Of note, this will also support more jobs in the U.S. This very admirable new Walmart initiative does not conflict with obtaining low-priced, competitive merchandise from overseas. In my opinion, the two efforts can complement each other and fulfill different needs for consumers. 

At this juncture, Walmart’s management is aware of the needs of the American consumer. While a huge relief aid package was made available by the Biden administration to millions of consumers, the threat of inflationary pressures still hovers over our economy. By making product from China more available on the marketplace, Walmart is helping to stem that pressure.

Walmart does not disclose how many marketplace sellers it has, but Marketplace Pulse estimates it at about 80,000. Walmart carries more than 80 Million unique items online. While I estimate that 75`% of the new vendors will come from China, I am certain that there will be representation from European and British countries as well.

Moving ahead with these programs, Walmart is on the threshold of new growth. That will be good for the company and the overall economy.