Today’s brands are tasked with efficiently managing inventory across various platforms, including key marketplaces like Amazon and Walmart. As major players in ecommerce, these platforms offer sellers fulfillment services through Amazon FBA and Walmart Fulfillment Services (WFS). These fulfillment options can play a vital role in a brand’s strategy and leveraging these services can help scale operations and get products to customers faster. However, assessing whether FBA and WFS align with your brand’s specific needs is important. This article will explore how Amazon FBA and Walmart Fulfillment Services can fit into your broader omnichannel operations and examine how a hybrid fulfillment strategy can be an optimal answer.
Amazon FBA and Walmart Fulfillment Services
Amazon FBA (Fulfillment by Amazon) is a comprehensive fulfillment service where Amazon handles the storage, packing, shipping and customer service for sellers. Brands can benefit from Amazon’s extensive fulfillment network. This service helps them provide fast and reliable shipping, which is crucial for customer satisfaction. One key advantage is Prime eligibility, giving brands access to millions of loyal Prime members who expect two-day or even same-day delivery. In addition to fast shipping, Amazon FBA provides customer service and returns management, easing operational burdens for brands.
Walmart Fulfillment Services (WFS) is a similar offering but operates through Walmart’s vast retail ecosystem. It allows brands to integrate their products with Walmart’s ecommerce platform and physical stores. WFS offers perks such as 2-day shipping and in-store pickup, which appeal to Walmart’s massive customer base. By using WFS, brands can tap into the reach of Walmart’s retail infrastructure, enabling them to access customers who may prefer buying online and picking up in-store. In addition, Walmart recently expanded its Cross Border (WCB) ocean shipping solution to all Walmart Fulfillment Services (WFS) sellers after a successful pilot program. This service streamlines the transportation of goods from major Chinese ports to Walmart’s U.S. fulfillment centers, providing enhanced convenience, speed and reliability.
Both Amazon FBA and WFS offer significant opportunities, but understanding how they align with a brand’s goals is essential. It’s also critical to consider the pros and cons and how these services fit within your larger omnichannel fulfillment operations.
The complexities of managing inventory across omnichannel retail
In omnichannel retail, brands sell products across multiple platforms and channels. This includes your own ecommerce site, Amazon, Walmart, physical stores, social media and more. While this approach creates more opportunities to reach a wider audience, it also introduces complexities, especially with inventory management. As businesses grow their presence across these channels, ensuring seamless coordination and inventory availability becomes increasingly important.
With Amazon FBA, your inventory is stocked across multiple fulfillment centers, which can be beneficial for reaching customers quickly but can also create logistical challenges. You must balance FBA inventory with what is kept in your own warehouse or third-party fulfillment centers to avoid overstock or stockouts. Amazon’s storage fees and strict guidelines for maintaining inventory levels can further complicate this balance, making it crucial to closely monitor demand forecasting and turnover rates to avoid costly errors.
Managing inventory for Walmart Fulfillment Services (WFS) has its own set of challenges. Unlike Amazon FBA, WFS has different expectations for how inventory is stocked and synchronized across multiple channels. To ensure that stock levels are sufficient not only for Walmart but also for other platforms you sell on, you must plan carefully, which requires robust visibility. Failure to properly manage these complexities could lead to delays, overstocking or running out of stock, affecting brand reputation and sales.
Pros and cons of marketplace fulfillment services
When considering Amazon FBA and Walmart Fulfillment Services, weighing each service's pros and cons is essential. Both offer unique advantages regarding fulfillment efficiency, customer reach and logistics, but they also come with distinct challenges. Understanding these factors can help brands make informed decisions about whether using these marketplace fulfillment services aligns with their business needs and growth goals.
Advantages of Amazon FBA
- Hands-off fulfillment process, including picking, packing and shipping
- Prime membership eligibility, providing access to Amazon’s vast customer base
- Amazon handles customer service and returns, reducing the operational burden
Disadvantages of Amazon FBA
- High storage fees, especially for long-term inventory
- Limited control over customer relationships, as Amazon owns the interaction
- Potential competition with Amazon’s private-label products
Advantages of Walmart Fulfillment Services
- Access to Walmart’s large physical and online customer base
- Competitive shipping and delivery times using Walmart’s logistics network
- Increased trust and credibility due to Walmart's brand backing
Disadvantages of Walmart Fulfillment Services
- Strict eligibility requirements for sellers and product categories
- Smaller marketplace reach compared to Amazon, limiting customer exposure
How to decide if marketplace fulfillment services are worth it
Navigating marketplace management and fulfillment adds a lot of pressure on retail operations. Amazon and Walmart’s fulfillment services can be a welcome relief if they are a good fit and managed well. Here are some things to consider when deciding if your brand wants to use FBA and WFS:
- The importance of scalability: Both FBA and WFS offer scalability, but determining which platform supports your growth strategy is key. If you anticipate rapid expansion, Amazon’s global reach might be more fitting. However, WFS provides an opportunity for omnichannel growth by leveraging Walmart’s retail footprint. You could also use both platforms in tandem, supported by a third-party logistics (3PL) provider to streamline operations.
- Costs and margins: While both platforms offer fulfillment solutions, their costs vary. FBA has storage and long-term fees that may affect margins, while WFS tends to have more predictable pricing. To maximize profitability, compare the fulfillment and storage fees on each platform and understand how they’ll impact your product margins, especially if you’re carrying significant inventory.
How a 3PL can support your brand with FBA and WFS
A third-party logistics (3PL) provider is a partner that handles warehousing, fulfillment and shipping for your brand. By working with a 3PL, you can simplify the complexities of managing both FBA and WFS. The 3PL acts as a centralized hub, allowing you to manage inventory for multiple platforms without the administrative burden.
A 3PL streamlines multichannel fulfillment by integrating with both Amazon and Walmart, ensuring your inventory is synced across all sales channels. For example, a 3PL can implement a centralized inventory management system that updates stock levels automatically across FBA, WFS and other sales channels, reducing the risk of stockouts and overstocking.
By consolidating warehousing and order processing across Amazon and Walmart, a 3PL can help reduce fulfillment costs. For instance, instead of paying for long-term storage fees with FBA, a 3PL offers flexible warehousing options to keep your inventory stored at more competitive rates.
A 3PL can also manage reverse logistics for both platforms, ensuring a seamless returns process. For example, they can coordinate with Amazon’s returns process while adhering to Walmart’s stringent return policies, giving your customers a smooth post-purchase experience.
3PLs often provide advanced technology solutions that offer unified tracking, reporting and analytics for your FBA and WFS orders. You can use a single dashboard to monitor inventory levels, shipping statuses, and fulfillment costs across both marketplaces, enabling data-driven decision-making.
Lastly, a 3PL offers the flexibility to scale fulfillment capacity during peak seasons, ensuring that both Amazon and Walmart orders are processed quickly and efficiently. This allows your brand to handle demand spikes without overwhelming your internal resources while maintaining high customer satisfaction.
Use Cart.com for optimized marketplace fulfillment
Today’s retailers face complex inventory and marketplace management. Robust strategies and strong solutions and services can make all the difference. Cart.com offers both marketplace services and 3PL fulfillment services, helping you achieve streamlined marketplace operations. Leverage our expert marketplace team and advanced tools to optimize inventory forecasting, ensuring accurate demand predictions and seamless logistics management. Plus, our 3PL services help prevent long-term storage fees and streamline your entire fulfillment process. Contact Cart.com today to find out more.
