Walmart’s marketplace is littered with exclusive items from other retailers like Trader Joe’s
While Trader Joe’s doesn’t have an online shopping website, shoppers may find the grocer’s private-label items on Amazon’s and Walmart’s marketplaces from third-party sellers.
As of Wednesday, hundreds of Trader Joe’s product listings — sometimes at a significant markup — could be found on Walmart’s website, from freeze-dried mangos to Green Goddess seasoning and tortilla chips. It’s not just Trader Joe’s; Costco’s Kirkland Signature products, plus Publix and H-E-B products, among others, were also spotted on Walmart’s site. Walmart and Trader Joe’s did not respond to Modern Retail’s request for comment.
It’s an issue that other third-party marketplaces deal with, including Walmart’s biggest competitor, Amazon. But Walmart’s marketplace is still in a rapid phase of growth — its e-commerce sales were up 43% year over year in last year’s third quarter — and some customers may not be aware the products they are getting aren’t being sold by Walmart. It’s unclear exactly who many of these resellers are, as they’re often under LLCs and don’t have a web presence outside of the marketplaces. Walmart reached 150,000 third-party sellers last year, according to Marketplace Pulse.
“A lot of customers do not know the difference, if they’re shopping on Walmart.com, whether they’re shopping directly from Walmart or they’re shopping on a marketplace,” said Blake Droesch, senior retail and e-commerce analyst for eMarketer. “So if they have a bad experience buying from some third party on a marketplace, then they could feasibly blame Walmart, and that hurts the retailer’s brand image.”
The sourcing methods for these items are questionable at best. “There’s a million ways that these guys are getting product, and there’s millions of them,” said Phil Masiello, founder of powdered superfood brand Uplift Florae and CEO of revenue acceleration agency Crunchgrowth. “Brands work to shut them down as best they can, but sometimes it’s almost impossible.”
Masiello said the brands he works with often can’t figure out where products being resold on Amazon are coming from. He said they could come from theft occurring while items are transported to the retailer from the manufacturer. Just last month, a California mom began a five-year prison sentence after pleading guilty to stealing millions of dollars in beauty products from Ulta Beauty and Sephora to resell on Amazon.
Or, these products could come from consolidators who buy from retailers after resets, like after a store layout is redesigned. “We have one brand that we struggle with every day, and the problem is that they sell to distributors,” he added. “Well, the distributor will sell to anybody.”
Walmart has rules limiting who can sell on the platform, requiring sellers to provide documents verifying their business and have a history of success on marketplaces or e-commerce platforms, among other requirements. It prohibits the sale of stolen items and counterfeits, but some of these resellers may be in the clear.
“As long as the goods are genuine, marketplaces love to have selection that is not necessarily authorized,” Juozas Kaziukenas of Marketplace Pulse said in an email. “Walmart can’t source Trader Joe’s items, but a network of sellers can, sometimes by going from store to store. The problem is ensuring the ‘genuine’ part.”
The same goes for Amazon. Years ago, an Amazon executive told The Wall Street Journal that “genuine unauthorized products are something that we welcome [for] the selection and convenience and pricing that provides customers.”
Trader Joe’s has also commented on this in the past. “At times, and more so recently, we have been aware of our products being resold, often at exorbitant prices, in various places (online and elsewhere). This is done without our approval or authorization and outside the controls of our quality-minded supply chain,” the company said in 2021. “To be clear, we neither condone nor support the reselling of our products and do all we can to stop the practice.”
It wouldn’t be the first time that something out of character has popped up on Walmart’s marketplace, which has previously sold and since removed third-party sellers’ sweatshirts and wig caps containing offensive words, among other questionable items. That speaks to the differences between the traditional retail model and the marketplace model, Droesch said.
“You can sell a lot more products, and you don’t necessarily have to worry about managing the overhead of purchasing items at wholesale. But it’s also kind of like the Wild West of e-commerce,” Droesch said. “It’s a lot harder to maintain your brand image.”