How to Build a Marketplace Like Walmart

How to Build a Marketplace Like Walmart

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Last Updated: 10th January, 2024

With over 10k stores in 20 countries, Walmart is the largest retailer in the world. It is also the second most preferred e-marketplace platform in the US with a 6.3% market share in the country, to add to a global $70.3 bn of revenue, according to eMarkerter.

Regardless of these numbers, the immense scale of this retail giant is hard to miss. But have you ever wondered what sets it apart? What has made Walmart the force it is today?

Consider this: back in 1945, when founder Sam Walton, bought a retail store for a rather large sum of $25,000 to set his business dream in motion. That too in a nondescript US city of Newport, AK. It may not have been the most noteworthy of business decisions in retail history!

Yet, out of about 2.7 million such retail businesses at that time, Walmart has come to tower over anything and everything in the retail landscape, redefining the industry. Significantly, during all these years, whether Walmart pioneers transformation with innovation or plays catch up –  it just seems to know the right ingredients to win.

Similarly,  Walmart eCommerce strategy too follows a similar pattern. It brings a different perspective to achieve “Amazon-esque results”. This emphatically came to the fore, during the pandemic crisis, when Walmart flipped the narrative and dominated the game – by out-performing Amazon, the market leader, with higher sales.

Walmart eCommerce strategy is a trendsetting example, to win in the competitive industry. In this blog, let’s put the spotlight on Walmart’s business practices, and know how to build an eCommerce platform like Walmart.

Table of contents

The Walmart story

In its 60+ years of existence, Walmart is the Tom Brady of retail – consistently winning it all, with sustained resilience and a constant focus on self improvement. Let’s trace its journey from the start and move to eCommerce.

The foundation to Becoming a Retail-icon

Sam Walton (1)

When Sam had bought the stores in the ’40s, he had set the foundation of a simplistic yet effective motto – win over your customers by offering greater value, by leveraging high volumes.

The business kept on expanding in the years to follow, navigating challenges. It’s only in the ’60s that the business took the name of Walmart. Its journey continued, with another significant development coming in 1970, when Walmart registered on NYSE. Similarly ’80s (and beyond) witnessed the Walmart juggernaut propelled ahead underpinned by rapid expansion of stores. It also included multiple acquisitions.

The key to the company’s success has been the following:

  • Win over customers with industry-defining low prices and greater discounts. These discounts are driven by higher volumes. However, overall efficient business practices are equally significant. Lower prices attract higher sales and reaffirm customer loyalty.
  • With the company’s focused USP, even sellers are aware they will get volumes, and brand exposure.
  • Consistent analysis of the competition: Walmart has sustained the practice of studying and analyzing the competition. In fact, the name Walmart itself has been inspired from “Fedmart” (a chain of stores in the US, operative from 1954-1982)
  • Walmart has offered an extensive list of products and services – inclusive of groceries, electronic products, fashion, home appliances, office supplies, furniture, and a lot more.
  • Consistent focus on introducing technology-driven innovations and automation to optimize business processes.

Walmart eCommerce Strategy – Repositioning and repurposing assets’ value

One can point out that Walmart’s success strategies are the same ingredients that have spurred the success of online marketplaces – naturally the strategy of leveraging volumes in lieu of higher profit margins, to meet revenue targets, gels well with multivendor eCommerce ethos as well.

In Walmart’s case though, their eCommerce journey didn’t start with a bang. They started online sales as early as 2000, but did not really push for dominance, until 2016.

Few reasons for the same could be: eCommerce, as a sales imperative, gained traction only later on. Moreover, during those times, Walmart could have viewed online sales as a cannibalizing channel to their core offerings. While their investments, attention, and core competence was brick and mortar ― a high-performing online presence, could have undermined the very pillar they have stood on for the past 40 years, compromising their competitive advantage. Or in other words, as Clayton Christensen puts it Walmart faced “The Innovator’s dilemma”.

But, gradually, the global retail landscape evolved…

eCommerce was no longer an additional sales channel for businesses, it became “THE” sales channel, compelling even legacy businesses like Walmart to recalibrate their eCommerce strategy.

And ever since that phase, or the post-2016 period, Walmart accelerated its advance, prioritizing eCommerce as a unified sales channel along with its chain of retail assets. Also in doing so, it met its competitors’ challenge head-on, by setting its business proposition distinctly apart from the market leader.

The key takeaways from Walmart eCommerce strategy are as follows:

  • Adding thrill to discounted shopping: The prices on Walmart are not just low upfront, rather, they offer multiple discount coupons, assistance for the elderly, daily coupons, and other reward schemes. This makes shopping for low priced products a memorable experience altogether.
  • Effective supply chain management: Historically, technology has been integral to Walmart marketplace strategy. It has made the best use of technology to enhance efficiency. For instance, it has implemented automated fulfillment centers, resulting in greater efficiency and lower operational costs – allowing Walmart to offer lower priced products.
  • Data-driven decision making: Walmart marketplace strategy leverages optimum use of data at each level. Sellers get key data such as EDLP (Everyday Low Price) and EDLC (Every Day Low Cost) to make pivotal decisions.

The Walmart eCommerce strategy – Exemplary inspiration for modern startups

walmart - online sales Source: statista.com

With more than two decades of existence, eCommerce is an integral part of everyday lives. While western markets have matured some time back – even global markets, that were slow to adapt to online shopping, are now opportune playing fields for global eCommerce orchestration.

Today, consumer expectations are defining the evolution of eCommerce businesses. With brick and mortar advantages of location, personal relations, etc. nullified by a virtual domain address, the eCommerce advantage is purely leveraged by value – prices, faster delivery, exceptional service, et all.

In such scenarios, the Walmart business model has expeditiously achieved user traction to dominate eCommerce in the US, in less than a relatively short span of time.

To understand how the behemoth was able to achieve such accelerated growth, let’s know the key areas over how the Walmart e-business strategy differentiates its value from other eCommerce platforms, particularly Amazon, eBay, and the likes:

  • Fewer but appropriate sellersBy following a rigorous seller vetting process, tedious registrations, and more, Walmart only allows sellers to onboard that are aligned with their vision. This is a policy that they have implemented right since their early days. This modus operandi is reciprocated by the trust that consumers have in the sellers, making the overall Walmart ecosystem more focused and purpose-oriented.
  • Policies to sustain low prices on the platform: Unlike the competition, Walmart removes sellers’ products from their listings if those products are available at a lower price on a competing website, or even at a significantly lower price on Walmart.com itself! This has ensured that Walmart adheres to its policy of lowest prices guaranteed, sustaining its distinct USP in the market. 
  • Leveraging a local user base: Sellers on Walmart.com are primarily from the US, when compared to a competitor like Amazon (where 49% plus are based in China). This helps the company to achieve consistency and execute a more holistic business plan. For instance, product availability, prices, delivery times, and other related factors are likely to remain consistent with local vendors in the fray. So customers get a more predictable shopping experience. 
  • A balanced ecosystem: A marketplace has both buyers and sellers operating in it. Success of the platform hinges in giving both these users a defined value. Hence, it is a balance that Walmart’s policies strive to maintain. Notably, these are more balanced for sellers than many other competing platforms. For instance, the returns are managed with sellers as stakeholders in the process. This avoids giving into buyers whims, bypassing unnecessary returns.
  • Benefits of Multichannel: A key component in Walmart’s eCommerce strategy is the effective use of its 5000+ of brick and mortar locations all over the US. For Walmart, the Brick and Mortar are beyond just warehouses. So its sales channels are unified, yet provide more options to the buyers – and opportunity of a multi-faceted sales strategy to the sellers. So Walmart is basically a brick and mortar store plus a virtual marketplace, while Amazon is an online only platform, the physical assets are lesser and don’t offer retail experience to buyers.
  • Extensive product range with exclusive leverage on some: While Walmart both offer an extensive product range like some in the competition, it outsells them on groceries, medicines, cleaning supplies, and more. Platforms like Amazon have more apparel, beauty, personal care products sales, and more. Thus, Walmart has a product range it can easily differentiate itself with.

In summary, by executing its business model, Walmart has built an ecosystem for all business participants. For buyers, they are offering low prices, last mile shipping, multichannel shopping experiences, a vast product range, and more. For sellers there is an ecosystem to scale and relatively a more conducive ecosystem. For the business itself, there is a limitless opportunity to grow even further.

Significantly, the most detrimental aspect is low prices for Walmart. While intrinsically the business will involve multiple considerations, from the outset it is a low-price. Notably, this strategy is also one the most easy to gain traction with the users.  Walmart has taken the low price business model to scale and this opens up opportunities as also discussed later in the blog.

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Start a Walmart-Inspired eCommerce Business

Step: 1 Defining your business – Distinctly and precisely

Unarguably, the scale and legacy of Walmart will be difficult to match from the word go, yet, notably, if one analyzes Walmart’s business over time – it is a journey of sustained business sense defined by a clear value proposition – executed by purpose-driven business resilience.

Walmart started its journey with a well defined positioning of its brand. Over the years, it has built the business around that core message – adding predictability and in the process garnering buyer expectations. Its processes and policies turn these expectations into experiences. Likewise, even as an eCommerce force, it has leveraged its clear USPs, as mentioned above, to establish itself among the top three.

In fact, back in the day, when eCommerce emerged as a disruptor of brick-and-mortar retail, it was speculated that Walmart, with all its eggs in the offline retail basket, will struggle to exist. What ensued in the years to follow, was contrary to these expectations.

As mentioned earlier, even though Walmart truly entered the eCommerce race post 2016, following its acquisition of Jet.com,  Walmart caught up to its key competitors, by leveraging its key strengths, and gaining traction over users, with its defined USPs. Here again the retail behemoth emphasizes the significance of well defined business objectives, especially in the competitive eCommerce space.

For the success of your endeavor, the first thing is to define this “value”. This value is best defined when it solves a key problem/need/roadblock for a buyer.

Identify this problem/need by conducting extensive market research. You can consider the following steps to execute a market analysis. 

  • Begin with Identifying your target market.
  • Collect market-related data.
  • Examine the competitors in your targeted industry. For example, their offerings, pricing structures, unique selling propositions, and the business strategies they employ.
  • Identify the demands of the users in the market. Users in a marketplace are both the buyers and the sellers. Achieving traction with both parties is essential for a marketplace’s success.
  • Decide on the products/services to be featured on the platform.
  • Research for any regulations or necessary legal compliances.

All efforts made at this phase can serve as a stepping stone for the platform. Insights driven by data contribute to mitigating uncertainties and aid in creating robust market tactics.

Step:2 Defining appropriate revenue streams

A robust marketplace strategy can include both direct and indirect revenue streams. The direct streams are as follows:

  • Charging commissions on product sales. (Walmart levies referral fees.)
  • Offering subscription plans for users. This can be in lieu of additional services, or can be offered as a standalone fee. For instance Walmart offers a Walmart + subscription service.
  • Monetizing advertisements on the platform.

While these are direct revenue streams, there are multiple indirect sources of revenue from an eCommerce platform, especially once the business starts to scale. Consider the following:

  • Revenue earned via additional services offered. For instance, Walmart charges sellers a monthly storage fee for its Walmart Fulfillment Services (WFS). These are charged per item.
  • Opportunities for co-branded partnerships.
  • Sale of self-owned branded products. Walmart also retails its own products under the brand name of Great Value, Equate, and others.
  • eCommerce platforms that are on-premises or self-hosted accumulate user data over a period of time. Such data offer multiple earning opportunities.

Generate Multiple Revenue Streams via your Platform

A Walmart-styled business can potentially scale big, which means higher volumes like the retail giant itself. Hence, these revenue streams are just some of the many ways an e-marketplace like Walmart can earn.

After conceptualizing your e-business strategy, the next consideration will be the important thread in the eCommerce business – the platform to conduct the business.

Step 3: Understanding Pivotal Features in Walmart Marketplace Strategy

For an  eCommerce platform like Walmart, you first need to analyze what are the features that allow users on the platform to conduct their eCommerce activities smoothly – and marketplace operators to manage operations efficiently.

Multichannel capabilities: For seamless multichannel experience, there are features such as Walmart’s pickup service, or Buy Online and Pay In Store (BOPIS), to allow buyers to buy products online. They can complete the checkout at the physical store, by paying and collecting the item.

Data insights: In today’s world, you need quantifiable insights to feed your decision making. Data is the quintessential tool that drives results-oriented business decisions, for both the sellers and the marketplace operators.

Seamless Fulfillment: eCommerce is driven by fast, efficient, cost-effective shipping. Automations, optimized operations, as well as lower carrier rates can bring desired results.

Platform workflows: Automated and synched operations, logic-driven UX, a high performing engine are some of the critical components that foster enhanced workflows, rendering a sustainable advantage to businesses.

Optimized overheads: In the competitive domain of eCommerce, business overheads can be make or break for businesses pushing for that minutest of advantage over competitors. In these scenarios, a lower overhead baggage can minimize the drag coefficient for the business to propel forward.

Start with an e-Marketplace Tailormade for Modern eCommerce

Step 4: Building the eCommerce platform

You can go about building your platform in a number of ways, depending upon the degree of involvement you want to invest in the process, both in terms of time and capital.

On one end of the spectrum, you can hire developers to code your eCommerce platform right from the ground up. For obvious reasons, this is the most resource intensive process and will require your team’s involvement during the entire time.

The other end of the spectrum is using a self-hosted readymade solution. Because eCommerce platforms globally are connected by some common underpinnings, there is a scope for readymade eCommerce solutions.

For example, a platform based on Amazon will have more in common with a platform based on Walmart, than there are differences. The reason is the constant evolution of these marketplace platforms, which in turn is foundationed on competitor analysis.

Hence readymade solutions, built, (and constantly evolved) by studying popular market platforms, have a universal application. Unless a business has a unique set of requirements, a well-built readymade solution will help them bypass the need for coding the eCommerce platform from scratch.

These two are the most popularly adopted since they maximize benefits either way. Then there are also other options in between. For instance, you can choose SaaS-based solutions, if you are still unsure of your business idea. Since these come with recurring costs, an achilles heel for eCommerce competitiveness ― such solutions can undermine success once the business grows, with significant costs.

Don’t Compromise on your Platform Capabilities for Low Costs

Step 5: Getting started – Market your eCommerce business 

Now that you have the eCommerce platform set up, the next would be getting users onboard. Deciding  between onboarding sellers or buyers, is itself a consideration. The Walmart marketplace strategy, much like those of other popular eCommerce platforms has its unique way to approach this conundrum. Once the plan is in place, you can follow these steps to market your business.

  • Work towards curating a strong Brand voice that connects with the target audience and is aligned with the USP of the business. 
  • Adopt a multi pronged content strategy for digitally market your business, balancing short term and long term objectives, with prudent distribution of the content.  
  • Social media offers a tailored large-scale audience – leverage popular platforms to audition your brand. 
  • Explore potential business partnership which gives mutual symbiotic benefits to all the stakeholders.
  • Periodically, analyze the effectiveness of your marketing campaigns with data insights.

These are some ways in which you can work towards marketing your eCommerce marketplace business.

How can Team FATbit Help

FATbit Technologies offers a holistic approach to help you get started in eCommerce, launch your platform, and scale – in the following ways: 

Get Started:

FATbit offers readymade solutions – Yo!Kart to build a marketplace like Walmart, right off the bat – essentially offering Walmart marketplace software capabilities. Yo!Kart gives businesses the advantage of 10 years of development invested in the solution. The self-hosted solution has all the bases covered with essential eCommerce features and multiple business APIs pre-integrated, logic-driven UX and pleasing UI, extensive data insights, and more – all encapsulated in a high-performing system.

Apart from being a rich-featured solution, Yo!Kart gives businesses the advantage of low overheads. The solution can be purchased for a lifetime of use with a single payment package. There are no recurring or any hidden charges thereafter. This helps businesses keep overheads low, and transfer this benefit in the form of low prices or additional services to the users.

Furthermore, there is an in-house team that covers any need for customization.

Launch:

Yo!Kart comes with standard inclusions that include free installation on a server of choice. Further, there is free technical support for upto 1 year. Also there is bundled Digital Marketing services that can help businesses build a robust launchpad for growth in the competitive eCommerce market.

Scale:

Yo!Kart is built to scale – an imperative for a Walmart marketplace software, which should have the capability to sustain robust performance during high volumes. The solution has a robust, secure and reliable underpinnings that is the growth engine of large scale marketplace businesses, thus giving businesses an ideal Walmart marketplace software.

Moreover, the in-house customization team can give you the technology-driven innovation to lead, aligned with Walmart’s e-business strategy. For instance, if you plan to introduce a functionality in the platform, to outperform your competitors, you can rely on the customizable Yo!Kart-powered platform and the expertise of the team.

Thus FATbit’s business relation with clients is a sustained support of a technology partner that starts with offering a leading eCommerce product – Yo!Kart and can continue to cover comprehensive requirements of the client.

Wrapping Up

Walmart, is a half a century long story of tenacious business resilience, forged over time, underpinned by being steadfast, taking challenges head-on, consistently leveraging innovation, and being proactive against the competitors.

Starting a marketplace like Walmart means not only getting inspired by Walmart’s business strategies, but also Sam Walton’s visionary providence and pertinacity towards his vision.  Moreover, Walmart highlights the critical part operations and technology play collectively in eCommerce success.

That said, eCommerce is a complex business that will require you to be dynamic with your plans. While we have touched on some brief considerations in this article, your eCommerce journey will be unique in itself. A sustained and holistic focus towards the aspired objectives, can give you a competitive advantage in the market.

While you focus on achieving your business goals, you can rely on eCommerce technology solutions from FATbit Technologies. With a versatile and readymade solution, Yo!Kart gives you reliance on contemporary technology, to set you forth for dominance in eCommerce.

FAQs

Q1.: What is Walmart’s market strategy?

Ans: At the heart of Walmart’s market strategy is a sustained focus on offering low prices on a wide range of products. This is possible via effective cost leadership, efficient supply chain management, and working intently towards customer satisfaction. The same ethos is reflected in Walmart eCommerce strategy as well. 

Q2.: What is Walmart Marketplace and how does it work?

Ans: Walmart Marketplace is a multi vendor e-commerce platform i.e. it allows third-party sellers to register themselves and join Walmart in selling on the website. While, Walmart itself has the marketplace operator prerogatives. It provides customer support, and online visibility to the sellers and conducts various eCommerce operations. This allows sellers to reach a wider customer base and leverage Walmart’s popularity.

Q3.: What is the e business strategy of Walmart?

Ans: The Walmart e business strategy builds on their decades of retail dominance via offline stores and adds exclusive online strategies to leverage a competitive advantage. A few things that Walmart does differently from an eCommerce platform like Amazon are: 

  • An effective seller vetting process resulting in fewer but appropriate sellers
  • Policies to sustain low prices on the platform
  • Leveraging a majorly local user base
  • A balanced ecosystem for both sellers and buyers.
  • Extensive product range with exclusive leverage on some

Q4.: Is YoKart a Walmart marketplace software? 

Ans: YoKart is a leading multivendor eCommerce solution. Let’s see how it offers pivotal inclusions to entrepreneurs looking to build a marketplace like Walmart.

YoKart offers: 

  • Key features and an intuitive shopping experience to offer buyers the eCommerce experience they expect in the modern competitive environment. 
  • Functionalities to allow sellers to operate a microsite within the whole marketplace ecosystem and sell effectively. 
  • Business API pre-integrations to allow the marketplace operator to set up an automated infrastructure – conducting seamless eCommerce operations. 
  • Exclusive features like BOPIS to unify offline and online sales. 
  • Scalable, high-performing core engine for high-volume operations. 
  • Significantly, no recurring software charges, to help businesses leverage lower overheads, and get a critical advantage over competitors – to offer Walmart-like low prices on their platform.

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