What Is Walmart Dropshipping? Complete Pros and Cons

With a huge 79% increase in online sales during 2020, equaling 350 billion US$  in growth it’s not surprising that many ecommerce entrepreneurs are looking at Walmart dropshipping. But what is Walmart dropshipping exactly, and how do you do it and what are the pros and cons?

In our helpful article, we will give you all the information you need to know to help start your Walmart dropshipping enterprise!

Let’s get the mini takeaway first before we drill down into more details.

Dropshipping Walmart goods through your store and selling on in traditional dropshipping methods is against their policies. But you can use a dropshipping partner, buy the items yourself for resale or become a Walmart vendor, known as a DSV. You may need to upgrade your business to qualify.

Ok so with the short answer in mind, let’s discover more and start off with understanding what Walmart shopping is.

What is Walmart shopping?

So the first thing to understand here is that Walmart dropshipping is not like the traditional dropshipping model. This means you can’t advertise Walmart products in your store, and then go on to have them ship their products to your customers.

It would seem a lucrative enterprise to simply sell on cheap items with a mark and enjoy the fast shipping of big companies with huge logistics like Walmart.

Walmart dropshipping

An easy way to explain Walmart dropshipping is that Walmart purchases your product from you at wholesale price and lists the product on its website.

Walmart then handles the listing optimization, pricing, and anything else customers see on Walmart.com.

However, the difference between this and traditional dropshipping is that you as the seller hold all your own inventory and are responsible for shipping orders, either directly to the customer or to a Walmart store.

“You can’t advertise Walmart products in your store, and then go on to have them ship their products to your customers”.

Walmart terms of use

So if you own a Shopify or other type of ecommerce store you might have thought you could simply sell Walmart products in your store, use Walmart shipping, make a markup, sit back and relax!

Well, unfortunately not only will Walmart not allow this but it’s also written into their terms of use.

“…reserves the right, at our sole discretion, to prohibit sales to dealers or resellers,” where reselling means, “purchasing or intending to purchase any Product(s) from Walmart for the purpose of engaging in a commercial sale of the same Product(s) to a third party”.

Walmart will cancel your orders

So it’s not surprising to discover that along with the many dropshipping forums quoting the same, that Walmart will take a dim view of your venture and if they catch on to your business, will cancel your orders.

Traditional dropshipping model with Walmart isn’t viable

So along with the fact that Walmart might discover your business intentions, you are also likely to get problems from customers.

For instance they will understand very quickly that they have been duped when items they thought were purchased via your store turn up with Walmart packaging.

Not to mention the refunds and customer service issues you are likely to encounter when your customers realize what’s been going on. Also, more importantly the fact they can buy their item cheaper directly from Walmart!

You could also be in very deep water in terms of returns, product warranties and even taxes!

Those of you wanting to start a Walmart dropshipping business might be wondering whether it’s permitted on Amazon or eBay.

Let’s find out.

“You could also be in very deep water in terms of returns, product warranties and even taxes!“.

Can you dropship from Walmart to Amazon or eBay?

As we’ve mentioned above, Walmart cancels orders if they discover or suspect you are dropshipping.

Even if your business enterprise isn’t discovered by Walmart, both eBay and Amazon’s dropshipping policies forbid the practice. In their t’s and c’s it specifically points out that you are not allowed to purchase items directly from other retailers and ship them directly to customers.

So how does Walmart dropshipping actually work?

“Even if your business enterprise isn’t discovered by Walmart, both eBay and Amazon’s dropshipping policies forbid the practice”.

How can I become a Walmart dropshipper?

Buy the items yourself for resale

So although it’s against Walmart and other leading  retailers’ policies to ship directly to your customers using traditional dropshipping methods.

One way of using Walmart’s products in your business is to buy them and have them shipped to you for resale.

This method of retail is known as ‘retail arbitrage’.

Dropship on Walmart’s platform

By using a dropshipping supplier like Alibaba or another of the best dropshipping suppliers, you can you can still sell dropshipped products to Walmart customers.

It’s important to remember that although Dropshipping from Walmart is not permitted, dropshipping on Walmart is ok.

Become a Dropship Vendor (DSV) or Walmart Supplier

Walmart Marketplace has a B2B program where you, as a supplier, sell products to Walmart for resale. In this scenario, you take the role of the manufacturer or wholesaler, not the direct retailer. You can either ship products to a Walmart warehouse or, through the DSV program, ship directly to the customer.

So how does this work in practice and how do you become a DSV?

How to become a DSV

By becoming a Walmart Dropship Vendor (DSV), you essentially become the ‘manufacturer’ as it were. So you supply the goods and Walmart sells and delivers them.

You need to qualify to become a Walmart supplier. Walmart won’t accept any wholesaler, so you may need to upgrade your business details and operations to meet its criteria.

Take a look at Walmart’s Supplier Checklist to find out the criteria required to become a seller .

Ok so now we’ve found out the ways to become a Walmart seller let’s see the pros and cons of Walmart shipping and whether it’s worth it.

Pros of Walmart dropshipping

• Trust in the brand
• Well optimised search listings
• Walmart pays for 2 day shipping
• No regular fee, dropshippers only pay per sale (usually around 15%)
• No SKU minimums or maximums

Cons of Walmart dropshipping

• Your store and business needs approval
• Low profit margins
• Bulk orders restricted
• Price parity rule ( sellers aren’t able to sell products lower elsewhere)
• Price leadership rule ( Walmart removes listing is products are more cheaply available on another site )
• All sellers need to handle their own storage, shipping, and returns.

Is it worth becoming a Walmart supplier?

So before you decide to become a Walmart supplier, it’s worth taking a look at their other sellers to see if you are able to offer lower prices.

As if you aren’t able to compete, it’s certainly not worth your time and effort as Walmart will simply remove your listing.

And finally…

Ok so we hope that’s given you the lowdown on Walmart dropshipping and if you think it might be a good way of developing your online venture.

Don’t forget, if you have decided that traditional dropshipping methods might be a better option for you and your business needs, then head over to find out how we can help you. Watch our video to discover more.

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