Walmart dropshipping is profitable if you can buy products at low prices and sell them for a good profit on Walmart. It's important to have reliable suppliers who can quickly ship orders and keep product quality high to avoid delays and returns. Focus on selling popular products with low competition to ensure consistent sales. Set your prices competitively to attract customers while still making a profit. Use effective marketing strategies like targeted ads and SEO to drive traffic to your listings.
Additionally, keep your costs low, including marketing and platform fees, to maintain profitability. Make sure your product listings are clear. They need good descriptions, pro images, and positive reviews to attract more buyers. Also, provide excellent customer service to handle questions, returns, and complaints quickly. It keeps customers happy and encourages them to buy again.
Walmart is a multinational retail corporation and is the largest company in the entire world in terms of revenue. According to the retail giant, about 220 million shoppers go to the Walmart Marketplace each week to make purchases. Data from research firm Renolon shows that there are now about 152,000 third-party Walmart Marketplace sellers. Money with Jee says that Walmart dropshipping is the easiest right now.
Noah Mincis stopped dropshipping on Walmart due to new return policies that made it unprofitable. The changes required sellers to cover return costs. Walmart made it hard to get reimbursed for fraud, despite measures like signature confirmation. Rampant fraud and frequent denials of reimbursement claims led to significant financial losses. Noah switched to Walmart Fulfillment Services (WFS), where Walmart handles storage, shipping, and returns. It offers a more manageable and scalable solution for his business.
The Walmart Marketplace has been open to third-party sellers since 2009. But, it did not see nearly the same seller growth as eBay or Amazon. However, the platform has become a point of interest for dropshippers looking for a less competitive alternative. Is Walmart dropshipping profitable even? For some, that answer is a resounding yes, but for many others, not so much.
This article will present you with five advantages that can increase your Walmart dropshipping profit. Additionally, it provides four tips to further boost your Walmart dropshipping profits. However, this article will also reveal why Walmart dropshippers are quitting in 2024 and highlight four dangers that make Walmart dropshipping unprofitable. Lastly, we will introduce to you how local lead gen biz can generate a monthly passive income for you ranging from $500 to $3,000.
5 Advantages That Increases Your Walmart Dropshipping Profit
1. Walmart Has Lower Competition Than Amazon
According to FitSmallBusiness, there are nearly 2 million active third-party sellers on the Amazon marketplace. That’s over 13x more than Walmart! However, even when comparing Walmart and Amazon dropshipping vs eBay, eBay is by far the most competitive with upwards of 19 million seller accounts! Selling online at Walmart hasn’t been popular for nearly as long, so it’s less saturated than the other common dropshipping marketplaces.
2. Walmart Does Not Require upfront costs
Unlike Amazon, where most dropshippers pay a monthly $39.99 seller fee, Walmart does not require sellers to pay any upfront fees to sell on the platform. The only fee you’ll need to pay as a Walmart dropshipper is an 8% - 15% (in most cases) referral fee. The referral fee is a fee Walmart charges to allow you to use their platform for your business.
3. Walmart Offers Large Range of Products and Categories
As a Walmart dropshipper, you can choose to sell in 24 product categories. Each Walmart product category also has many sub-categories for your products, so you can be very specific in what you are selling. Walmart even provides handy “Include” and “Exclude” attributes for each sub-category so you can ensure your dropshipping product is optimized for discoverability on the platform.
4. Walmart Is a Household Brand Name
Considering Walmart’s status as the company people around the world spend the most money with of any brand, it’s clear Walmart is a recognized and trusted household name. Although Walmart doesn’t have the best reputation, as according to SiteJabber they have a consumer rating of 3.31 out of 5 stars, most people are comfortable purchasing from the brand because of its competitive pricing and free shipping.
5. Walmart Allows Bulk Listing Upload
Instead of having to manually setup a new listing for each dropshipping item on Walmart, you can just use Walmart’s Full Item Spec to bulk upload everything at once. This can save a tremendous amount of time on a meticulous task, leaving you more time for other things.
4 Tips To Increase Your Walmart Dropshipping Profits
1. Optimize Your Walmart Dropshipping Product Listings
Using Walmart SEO in your product listings can increase the discoverability of your products on the Walmart Marketplace. According to Walmart’s fulfillment partner Deliverr, Walmart determines the listing quality and decides where a listing should rank in search using an “optimization triangle”. The three core elements include:
As you can see, your product listing has a major influence where your products rank on Walmart. You should:
- Use concise listing titles - Keep your titles simple and easy to understand. An effective listing title formula you can follow is “Brand + Item Name/Model + Features + Style”
- High-quality product images - Your product images should be high quality and crystal clear to reflect the value of your product. Because your customer won’t be able to touch the item with their own hands, your images need to show them enough of the product to be comfortable buying it.
- Include keywords - Write your product descriptions for your shoppers first, but be mindful of including as many target and secondary keywords as you can.
2. Sell The Right Walmart Dropshipping Products
Although there isn't really any effective third-party product research tool yet for Walmart dropshipping like Amazon has in JungleScout, you can still use some tactics to determine if selling a product is a good opportunity. First, you can type your product’s keyword into Google Trends to see the current interest level on Google. You can also use a paid keyword research tool like ahrefs to see how many people are searching the product's keyword on Amazon and Google every month. Besides tools, you can manually type your product’s main keyword and other related keywords into Walmart and see what kind of competition there is. If you find an item with a lot of search interest on other major search engines like Amazon and very few products listed on Walmart to meet that need, it’s likely an opportunity.
3. Follow Walmart's Customer Service Expectations
It’s important to meet customer expectations, so be upfront that your shipping times will be longer to avoid customer dissatisfaction. Walmart also has their own performance expectations you’ll want to follow if you want to avoid being suspended or terminated from the platform.
4. Try Walmart Dropshipping Automation
A Walmart automation service can handle many of the meticulous tasks of dropshipping for you. If you’re getting a lot of sales, imagine the hassle and headache of having to go back and forth with your supplier for each individual order with customer shipping details and then tracking fulfillment to make sure it gets to your customer. For that reason and many more, Walmart dropshippers leverage a Walmart automation dropshipping service.
3 Ways To Earn Profits In Walmart
1. Resell Walmart products onto other platforms
Reselling products from Walmart onto other platforms like Facebook Marketplace is prohibited according to the Walmart Terms of Use. However, there is a way around this rule and many sellers get away with it. Instead of using the classic dropship model where you ship directly from the product’s source to your customer, you can ship from Walmart to your address and then to your customer. This is also known as retail arbitrage. You could also hire a third-party logistics service to receive the products and outsource responsibility for forwarding them to your customer. Although this provides a workaround, it cuts more into your already slim drop shipping profit margins and requires additional work on your end.
2. Become a Walmart Drop Ship Vendor (DSV)
A Walmart Dropship Vendor is a Walmart supplier that ships the goods they sell directly from their own place of business to Walmart’s customer. Although a DSV is responsible for the entire fulfillment process, goods are still sold under the Walmart brand name. Despite the opportunity, the Walmart DSV program isn’t possible for everyone.
The program is by invite only for reputable, high-volume sellers who have been selling as a 3P seller on Walmart. Therefore, if you want to sell as a Walmart Dropship Vendor, you’ll have to become a 3P seller first.
3. Dropship as a third-party (3P) Walmart seller
As a third-party seller on Walmart, you own your product, listing, and brand, and leverage Walmart as your sales channel. Customers can see that the item is from you, not Walmart, and you’re completely in charge of setting your own prices and fulfilling orders. Dropshipping as a third-party seller is the best and easiest way to get started dropshipping on Walmart and so is the focus of this article.
Why Walmart Dropshippers Are Quitting in 2024?
According to Noah Mincis, an Ecommerce seller and YouTuber with 25.7k subscribers, dropshipping on Walmart was better before. Walmart was trying hard to attract sellers, so they treated both customers and sellers equally. However, now that the platform is gaining popularity among Ecommerce professionals, Walmart is reverting to its “customer first” approach. Walmart made a change to its refund policy towards the end of 2021 that has made it nearly impossible for dropshippers to be successful since. In fact, it forced Noah to quit Walmart dropshipping completely after losing $1,000/month in sales because of bad claims.
Walmart has always required sellers to provide refunds. Before, if a Walmart customer made a fraudulent claim or chose an adequate reason for wanting to return an item, Walmart would refund BOTH the buyer and seller by covering the costs itself. However, after the policy change, Walmart made it much more difficult for sellers to refute buyer refund claims.
Walmart outlined 3 ways a seller could refute a claim against a buyer asking for a refund, which are:
- Get signature confirmation from the buyer
- Photo evidence of delivery
- Proof of admission from buyer they received item
Clearly, paying the delivery service an extra fee to get a signature from the buyer cuts into profit margins but is the easiest option to get consistent proof, which is why many dropshippers started doing this to protect themselves. However, in the experience of Noah and other Walmart dropshippers, Walmart would often ask for additional proof or deny claims outright, even if the signature matched the name on the order. Noah was tired of seeing his order status as “lost in transit” or “lost after delivery” and moved onto Walmart Fulfillment Service (WFS) instead because then Walmart takes responsibility for order fulfillment and related refunds.
4 Dangers That Make Walmart Dropshipping Not Profitable
1. Walmart Has Extended Application Process and Strict Requirements
Although the application process only takes about 15 minutes, getting approved to sell on the Walmart Marketplace can take up to four weeks. Furthermore, in order to apply, you need to have:
2. Walmart Has Strict and complicated seller rules
Along with strict seller requirements, Walmart also has more strict seller rules because it has a reputation to uphold. For example, Walmart recently updated the requirements to qualify for the eye-catching strike-through pricing and reduced pricing or clearance pricing tags. The price now needs to be marked down 10% or more from the 90-day median average price paid by Walmart customers or the median price offered by Walmart for at least 28 out of the last 90 days.
3. Walmart Is a New platform That Still Working Out Technical Kinks
The Walmart platform has really only started taking off with sellers for the last few years, and as a result, there are many issues with the user interface. According to eCom Tom, a dropshipping expert and YouTuber with 37.5K subscribers, the seller side of the Walmart Marketplace is incredibly hard to navigate, with things changing themselves or not working a good portion of the time. You can’t even delete old items you’re no longer selling and get them out of view permanently. You can only put them in retired status.
4.. Walmart Offers Low Profit Margins
Dropshipping is the Ecommerce business model with the lowest average profit margins because dropshippers can’t take advantage of buying in bulk to lower unit costs. Dropshipping on the platform of the world’s “Every Day Low Price” retailer? Your margins are going to be slim...
Conclusion: Why Local Lead Gen Biz Is More Profitable Than Walmart Dropshipping?
Local lead generation is more profitable than Walmart dropshipping because it involves lower overhead costs, fewer logistical challenges, and generates a more stable and passive income stream. By running your dropshipping business through Walmart, you’ll always have to put up with Walmart’s rules. Relying so heavily on a third-party just to operate your business is risky. Walmart could change its rules to make dropshipping harder than it already is. They could even ban the dropshipping model completely and suspend your seller account if you don’t cooperate. On the other hand, with a local lead generation business, you own all your websites and so have complete control over your business.
Local lead generation is a business model where you choose a business niche in a local market. You get a website to rank on the first page of Google for that market. Then, interested customers go to your site and leave their contact information. You can sell the valuable leads the website generates to local businesses who do that work for hundreds to thousands of dollars every month. Unlike dropshipping, you'd have to sell many products to make a good profit. With local lead generation, you could have a six-figure business with just a few clients. Learn more about local lead gen here.
Walmart dropshipping can be a good opportunity. It's for you if you have little startup money or already dropship on other marketplaces and want to test Walmart. However, dropshipping on a competitive marketplace is not a good long-term business model. There are many better online business models to choose from, like local lead gen. There is so much money floating around on the internet.
