Walmart beefs up its third-party marketplace to further take on Amazon

Walmart is also expanding its range of pre-owned and collectible categories with the launch of Resold at Walmart, a beefed-up version of Walmart Restored, which sells refurbished electronics and small appliances. The company’s pre-owned assortment currently includes five million items from more than 1,700 sellers across a wide range of categories, according to Walmart.

It’s the latest sign that Walmart is betting on its third-party marketplace to grow beyond its retail footprint and become an e-commerce juggernaut that can compete with the likes of Amazon. To that end, Walmart said it expects its e-commerce business will be profitable within the next two years, according to Bloomberg. Walmart’s global e-commerce sales surpassed $100 billion in 2023, a first for the superstore. While that shows Walmart is gaining on Amazon, the e-commerce giant saw net sales from its online business that exceeded $231 billion last year. To close the gap, Amazon is taking competitive cues from its rivals.

Walmart’s new merchandise offerings reflect consumer demand and will drive further growth, Michael Mosser, Walmart Marketplace’s vice president of categories, said in an interview. Walmart’s massive retail footprint of physical stores across the country also means its marketplace is “uniquely positioned” in what has become an increasingly competitive e-commerce landscape, he added.

“We have more than 255 million customers a week shopping in Walmart stores and online, so it does provide us this opportunity to create a meaningful business for our sellers,” said Mosser. 

The Bentonville, Arkansas-based retailer is also continuing to ramp up its logistics and fulfillment capabilities. Walmart LocalFinds, for example, will allow for direct pickup and delivery from merchants’ physical stores. Additionally, sellers can leverage Walmart’s supply chain to fulfill orders from any e-commerce site, which will launch just in time for the holiday shopping season, the company said. Walmart’s supply chain can also now handle the transportation of goods from Asia directly to Walmart warehouses across the U.S.

In addition, Walmart announced a few perks for sellers. For the second year in a row, Walmart said it would waive peak season storage fees if sellers get holiday inventory into its storage facilities by Sept. 30. (In contrast, Amazon recently announced its peak holiday fulfillment fees earlier this month, though it also eliminated its storage overage fee.) 

The slew of updates comes as Walmart’s e-commerce business has seen rapid growth in recent quarters. During its second-quarter earnings, the retailer reported that online sales climbed 21% globally and 22% in the U.S. Meanwhile, marketplace growth has cooled at rival Amazon, which saw its online stores segment grow just 5% year over year in the most recent quarter.

Walmart Marketplace, in particular, is a key driver of the company’s overall online sales growth. Walmart’s third-party marketplace has seen more than 30% sales growth in each of the past four quarters, according to the company. The number of sellers listing items on Walmart.com grew 20% last fiscal year, Walmart also said. That growth is reflected in the sheer number of attendees at Walmart’s seller summit — more than three times the number of sellers compared to last year, Mosser told Modern Retail. 

“Walmart is aiming to add more value to its marketplace to keep encouraging its shoppers, and particularly Walmart+ members, to make more purchases on the marketplace, which in turn will draw more brands and sellers,” said Sky Canaves, a retail analyst at eMarketer. “Walmart is very much following the Amazon playbook of building a successful marketplace.”

Take Walmart’s Premium Beauty launch, for example. A flood of premium beauty brands, including Clinique, Kiehl’s and Too Faced, have inked deals with Amazon in recent months, Modern Retail previously reported. Notably, premium brands once shunned Amazon due to the perceived stigma associated with the platform. This sea change has come at a price to Walmart, which, despite being the largest beauty retailer in the U.S. right now, is expected to be dethroned by Amazon by 2025, according to Morgan Stanley. Beauty consumers also buy online through Amazon at nearly two times the rate of Walmart, according to eMarketer.

As the retailer continues to invest in the online platform, Walmart Marketplace increasingly becomes a viable option for brands that want to scale online, said GlobalData retail analyst Neil Saunders. 

“No one can deny that Walmart, like Amazon, is a fantastic volume driver,” said Saunders. “Walmart has the traffic, it has the conversion rates, it has the brand name that attracts people.”

Another way Walmart is mirroring Amazon’s e-commerce strategy is with its ramped-up resale business, Resold at Walmart, which features five million items from more than 1,700 sellers. Earlier this month, Amazon announced that it was rebranding its online resale marketplace to Amazon Resale, previously called Amazon Warehouse. Yet, Walmart’s focus on expanding its assortment to collectible trading cards, for example, suggests the company is also taking aim at rival eBay, said Canaves. 

Indeed, eBay’s focus on niche categories has helped it navigate stiff competition from Amazon, Walmart and Temu. During the second quarter, eBay reported revenue of more than $2 billion due in part to strong performance in categories such as collectibles and refurbished items. 

Like Amazon, Walmart seeks to offer customers a vast array of goods at a time when the e-commerce landscape is more competitive than ever. To Wade Jubrey, partner in the consumer practice of the consulting firm Kearney, it was inevitable that Walmart would take cues from its more experienced rivals to grow its e-commerce business.  

“Fresh and relevant content and products are critical for marketplaces to stay relevant,” said Jubrey. “As soon as content is stale, consumers will stop engaging and move onto any one of the dozens of other options at their fingertips.” 

As Saunders put it, “Both Amazon and Walmart are going where the growth is, and why wouldn’t they?”