What the Walmart-Shopify Deal Means for Shippers

by | Jun 18, 2020

3 min read

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Amazon is getting a run for its money with a new partnership between Walmart and Shopify, which allows Shopify store owners to offer their products on Walmart.com. 

At the click of a button, Shopify’s 1 million merchants will be able to add the Walmart integration to their sites and reach Walmart’s massive customer base of 120 million shoppers. The companies have a goal of onboarding 1,200 sellers this year

 

Walmart plays catch-up

Walmart has struggled mightily to match the growth and eCommerce presence of Amazon. (Amazon represented a third of online commerce in 2019.)

After dumping Jet.com last month, the retailer has found a new plan of attack in partnering with Shopify. Jolted by the online boom of COVID-19, Walmart aims to keep pace with Amazon and shed its reputation as a dinosaur that couldn’t compete. This partnership expands Walmart’s third-party marketplace of 75 million items, offering customers a wider selection without all the associated costs for Walmart.

Shopify had already made headlines this year with its Facebook partnership, which made it easier for its sellers to bring their products to the Facebook Marketplace. Between March 13 and April 24, new stores created on Shopify grew 62% compared to the prior six weeks, driven in part by the shift to online sales during the pandemic.

 

How shippers will benefit

The partnership will likely continue to drive eCommerce, and in turn, parcel fulfillment. Volumes won’t necessarily shift because shoppers will replace in-person purchases at traditional retailers with online buying.

This move positions Walmart closer to Amazon in terms of third-party marketplace offerings, but what does it do for shippers?

  1. Shopify sellers can participate in Walmart’s free 2-day shipping program.
    The program offers a boatload of benefits, including a higher likelihood of winning the buy box and a higher ranking in shoppers’ search results.If you’re a Shopify seller who will take advantage of this program, it’s important to know your total landed cost for your inventory at all times. Getting items quickly often outweighs small price differences in shoppers’ minds, so ensure you’re factoring shipping costs into your Cost of Goods Sold. Otherwise, you could end up taking a loss on the sale!
  2. It makes returns for Shopify merchants cheaper.
    Return shipping is slow and costly, so Walmart accepting Shopify returns in its stores will save merchants big money and help them improve their customer experience.
  3. Shopify merchants (and all shippers) should watch out for increased last-mile costs.
    Recent peak surcharges on top of increased residential volume during the pandemic mean that that the last mile is getting costlier every day. Understanding your data from every angle is key to keeping ahead of these expenses and protecting your bottom line.

 

Potential shifts in the shipping landscape
Could this new partnership lead to a Walmart/FedEx pairing— or even an outright purchase of the shipping giant? Amazon has been favoring UPS for some time now, so perhaps a similar situation is around the corner for Walmart. Could Amazon respond by reviving its Amazon Shipping service? All of these companies want to tighten last-mile costs to gain a competitive advantage, so only time will tell.

 

Every shipper needs to keep an eye on surcharges, no matter where they sell from. Our new eBook, 5 Budget-Busting Surcharges & How to Lower Them, gives you a quick, actionable look at how to keep the biggest surcharges at bay.