What’s drawing Amazon sellers to Walmart’s fulfillment services

WFS, much like Amazon’s rival program, gives seller access to Walmart’s warehousing and delivery infrastructure. WFS products also receive Walmart’s fast-shipping guarantee tags — notably its “two-day shipping” label — which can help boost sales on the marketplace.

Approximately 44% of Walmart’s third-party marketplace volume flows through WFS, an increase of 250 basis points versus last year, Walmart CFO John David Rainey said in the company’s second-quarter earnings call in July. “We have a long ways to go before we are the size of what best-in-class is here,” Rainey had previously said in a May call with buy-side investors, per a transcript. “We think this is a great complement to our first-party business.”

Many sellers have taken the bait over the past five years, as Walmart has added more capabilities and services to recruit them to use its fulfillment services. In 2024, Walmart launched its Multichannel Solutions program that allows sellers to use WFS to fulfill orders from any e-commerce site, including Amazon, eBay, Shein and Temu, via Walmart’s supply chain. According to Marketplace Pulse research from 2024, more than 50% of Walmart sellers also sell on Amazon. Last year, the company also launched cross-border fulfillment, so it can handle transportation of inbound goods from ports of origin in Asia directly to WFS facilities in the U.S.

“As we continue to add more and more services, making it easy for sellers to manage their supply chain and all of their logistics needs, I think that has been a big contributor to the growth,” said Jare’ Buckley-Cox, svp of marketplace seller services for Walmart.

Walmart sells WFS on the basis of price, speed and other factors. Buckley-Cox says it’s a “natural extension” for Walmart marketplace sellers to use the fulfillment services to accelerate their growth on the platform. One of the biggest draw for sellers is the ability to offer two-day shipping and get the associated label on Walmart’s search pages. The company also claims, through first-party data, that its per-item fulfillment rates average 15% lower than competitors and that it boosts gross merchandise value by 50% on average.

“Fortunately, because we’ve been able to maintain our internal costs so low, we then, by extension, have been able to keep our prices low and consistent for our sellers over the last five, six years that we’ve operated the program,” Buckley-Cox said.

The company also doesn’t have long-term storage fees for the first year of storage and doesn’t have minimum or maximum inventory requirements, according to Buckley-Cox. It also offers item-prep services and delivery from sellers’ facilities to Walmart fulfillment centers.

“We just make it super easy for sellers. You have all the services that they need at a really easy, competitive price point,” Buckley-Cox said.

Owen Carr, chief merchandising officer for e-commerce accelerator Spreetail, said he believes WFS has grown as either a supplement or alternative to FBA. In his view, it is because Amazon sellers didn’t previously have an affordable shipping option for Walmart.

“A lot of sellers have grown up using FBA. … It’s pretty easy, because you just don’t have to worry about any of the fulfillment, and the cost and the infrastructure of that, and Amazon handles it,” Carr said. “It’s a way to bring a lot more selection and help sellers take Walmart more seriously, in terms of helping them drive volume like they do on Amazon.”

Amrinder Dulay specializes in Walmart, TikTok and social media for marketplace agency Triforce Digital Partners. She had previously worked at TikTok Shop and Spreetail and was a merchant at Walmart as the retailer was launching its fulfillment services.

“When [WFA] was first being launched, a lot of brands were hesitant to go that route” in offloading inventory to Walmart to avoid having to pay storage fees if items didn’t sell as quickly as they hoped, Dulay said.

Dulay said that, to quell those fears, the company encouraged sellers to give them just about 10% of their inventory, just the best-selling items. “A lot of [Walmart’s] suppliers actually were already working with … third-party distributors,” she said. “They were already putting their inventory in third-party warehouses. So it was basically like, ‘Hey, we’re cutting the middleman. We’re offering that to you now.’”

She said that while price has been a contributing driver to WFS for sellers, it’s more a game of speed and getting the “Fulfilled by Walmart” label.

“Being able to have WFS on your listing means that there’s more confidence, not just [by] the customer, but also in Walmart themselves that they’re going to be able to fulfill that for them,” Dulay said.

But Amazon sellers still have the option of using Amazon’s multichannel fulfillment. Some companies, Carr said, do tremendous volume on Amazon, and not much on Walmart. Therefore, it may be easier and less expensive for them to use one pile of Amazon-fulfilled inventory to service all their channels.

“I think that Amazon could theoretically stop sellers from migrating over to WFS, and I think we’ll have to see how that plays out,” Carr said. “I think that it will increase competition [between] FBA and WFS.”

Will Haire, co-founder and CEO of Amazon and Walmart marketing agency BellaVix, said he could see brands shifting toward WFS because of affordability and because WFS-fulfilled orders can be returned to Walmart’s 4,000-plus stores in the U.S. He said that, while he hasn’t personally seen the 50% growth in GMV in using WFS that Walmart has claimed, he has seen around 15-20% growth among his own clients. He said the two-day shipping badge is what he has seen lead to conversions in using WFS.

“They’re both competing to be the world’s logistics company,” Haire said, adding that he believes Walmart could catch up. “Amazon just has a solid head start.”