Here’s a great article from WebFX Blog
If you’re looking to sell on an online marketplace, you may feel overwhelmed by your options. You may already know about Amazon, but what about other marketplaces like Walmart or Target? Are they worth selling your products on?
Many businesses like to sell on Walmart or Target, but there are positives and negatives for every platform. On this page, we’ll give you a Walmart vs. Target SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to help you decide which platform is best for your company.
Keep reading to learn more and call us today at 888-601-5359 (or contact us online) to see how our Walmart Marketplace services and Target Plus services can help you get started with selling on these platforms.
Walmart vs. Target SWOT analysis: How do they stack up?
If you’re deciding whether to sell on Walmart or Target, you want to know how these platforms compare. To help you understand these platforms better, check out this Walmart vs. Target SWOT analysis.
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|SWOT Analysis||Walmart Marketplace||Target Plus|
|Strengths||No regular maintenance fees
No inventory limitations
Walmart brand association
Easy customer payment
|Target brand association
Target return management
RedCards payment option
|Weaknesses||Selling approval required
Walmart pricing model
No fulfillment options
No fulfillment options
Must be an established business
|Opportunities||Reach millions of unique visitors
|Reach thousands of shoppers|
|Threats||Other companies selling similar products can outrank you||N/A|
In the Walmart Marketplace vs. Target debate, we’ll first take a look at Walmart.
Walmart Marketplace has a lot to offer your business, including:
1. No regular maintenance fees
When you’re exploring marketplaces, you’ve probably heard a lot of people mentioning that they sell on Amazon. You’ve also probably heard those same people complaining about the number of fees Amazon charges.
But with Walmart Marketplace, you don’t have to worry about a stack of fees.
Walmart only charges you a referral fee.
Unlike Amazon, you don’t pay any regular maintenance fees to have a seller account, like professional sellers on Amazon do.
Your Walmart referral fee amount depends on the product category. Most products have around a 15% referral fee.
2. No inventory limitations
Some online marketplaces limit how much you can list and sell, which causes you to either focus on your most popular products to earn more sales or your least popular products to try and move inventory.
With Walmart Marketplace, you get the best of both worlds.
Since there are no limitations on how many products you can upload and sell, you can sell all your business’s products, as long as they aren’t a prohibited product, like alcohol or digital goods like ebooks.
3. Walmart’s brand association
It can be hard to sell your products online if you’re a small business or brand that people don’t know. When you sell on Walmart Marketplace, your brand becomes associated with Walmart’s brand.
People trust Walmart and feel confident shopping with them.
So, if you get vetted and approved to sell on Walmart Marketplace, you’ll give shoppers confidence in buying your products. That will make people more likely to purchase from you.
4. Payment is easy for customers
Marketplace benefits aren’t just about what your business gets from selling through these platforms. It’s also about these sites creating a positive shopping environment for buyers, which in turn benefits your business.
One of the most significant selling points of Walmart Marketplace is its payment options.
People will abandon orders if they can’t use their preferred payment method. With Walmart Marketplace, you don’t need to worry about that. Walmart offers various types of payment options, from credit cards to gift cards to PayPal.
Since people have more payment options, they’re more likely to follow through with their purchase.
Like any marketplace, Walmart Marketplace has weaknesses.
In this Walmart vs. Target SWOT analysis, let’s look at where Walmart Marketplace falls short:
1. You must get approved
One of the downsides of Walmart Marketplace is that you have to fill out an application and get accepted to sell on their marketplace.
Walmart judges your business based on:
- Previous marketplace experience
- Fulfillment methods
- And more
Essentially, you must prove you’re a great candidate to sell on their site, which can prove difficult if you don’t align with their pricing model or have previous marketplace experience.
2. You must adapt to Walmart’s pricing model
Walmart is known for its low prices. While it’s great for consumers, it’s not so great for third-party sellers on Walmart Marketplace. You must keep your product prices in line with Walmart’s pricing scale.
Walmart has two pricing rules:
- Price parity: You cannot sell your products at a lower cost on other marketplaces.
- Price leadership rule: Walmart can remove listings from third-party sellers if they’re selling a product at a price that is significantly higher than other third-party sellers.
As a result, you’re continually worrying about pricing and choosing the right amount so you don’t get your listing removed and can appear in search results.
Additionally, these low prices cut into your profit margin.
If you want to match Walmart’s pricing standard, you’re going to have to lower product prices and miss out on potential profit.
3. No fulfillment options
Unlike Amazon, Walmart Marketplace doesn’t have a fulfillment option like Fulfillment by Amazon (FBA). You are responsible for storing and shipping products, as well as managing returns.
As we dive further into the Walmart Marketplace vs. Target debate, let’s look at opportunities with Walmart Marketplace. If you want to sell on Walmart or Target, you need to know if there is potential for your business to grow.
Walmart Marketplace offers an excellent opportunity for you to reach more people. Their online store gets over 100 million unique visitors a month. This broad reach means that you have the chance to reach more people interested in your products.
Additionally, there’s less competition on the platform since it’s a newer marketplace.
You have a better chance of earning product space and driving sales for your business.
The biggest threat as a seller on Walmart Marketplace is other companies.
If more than one company sells the same product as you, at the same price, Walmart will rank the item that was listed first higher. So, if you’re new to the marketplace, you’re likely to lose out to established Walmart Marketplace sellers, unless you have unique products that others don’t offer.
The only way to out-compete these established companies is to lower your prices. When you drop your prices, however, you dig further into your profit margin and leave little room to make money.
If you’re debating whether to sell on Walmart or Target, you need to investigate Target’s marketplace, too. Target Plus is fairly new in the world of marketplaces, so much isn’t known about it. Nonetheless, let’s look at the Target SWOT analysis to see how it compares to Walmart.
Target Plus has numerous strengths for your business:
1. Your brand associates with Target
Just like Walmart, you build a brand association with Target and instill confidence in buyers. Since Target is a well-known brand name, people trust them. That trust transfers to you and makes buyers feel confident in buying your products from Target Plus.
2. You can set up your own storefront
Many people like selling on Amazon because they can set up their own storefront.
With Target Plus, you can set up your own storefront, too.
Target allows you to create a page on their site that highlights your brand and products.
This personalized storefront lets you create your own “website” on Target’s website. It makes for a great feature from Target Plus that allows you to build a better brand presence on their site.
3. Target handles returns
As you saw with Walmart Marketplace, you’re responsible for shipping products and processing returns. While Target still makes you ship products on your own, you don’t need to worry about returns.
Target handles all returns for your business. It’s one less thing on your plate, which makes Target Plus a more desirable option for online sellers.
Target Plus makes it easy for customers, too, by providing the option to ship orders back to Target or make returns in-store. This easy process makes customers more likely to buy from marketplace sellers because they know returns won’t become a hassle.
4. Customers can use RedCards
When customers have exclusive perks, they want to use them.
With Target Plus, customers can use their RedCards, which gives them 5% off every purchase and free shipping. Since shoppers can use these perks with their marketplace purchases, it makes them more likely to buy items from your store.
If you’re debating whether to sell on Walmart or Target, look at the drawbacks of each platform.
In this Walmart vs. Target SWOT analysis, the next step is to see where Target Plus falls short:
The biggest weakness of Target Plus is that the application process is invitation-only. Other marketplaces, like Walmart Marketplace, allow you to apply and get approved to sell on their site. With Target, you don’t have that option.
Target only invites brands, which they’ve vetted thoroughly, to sell on their marketplace. Your company has to wait and see if Target will ask you to sell on its platform. Until that happens, you can’t sell on their site.
2. No fulfillment options
Just like Walmart Marketplace, Target does not have a fulfillment option, which makes you responsible for shipping any products you sell on their marketplace.
3. You must be established
This next weakness goes along with Target’s invitation-only marketplace model.
If you want to have a chance to receive an invitation, you must be an established business.
You have to have a positive reputation and a trusted brand.
Target’s process alienates small businesses that aren’t as well-known as some larger companies, making this one of the most significant weaknesses of Target Plus. The platform isn’t helpful to start-up businesses that need help getting their brand out there, either.
If you can get into Target Plus, you can reach a broad audience of shoppers. Target has over 1800 storefronts nationwide, which means they reach people across the country. Many customers who shop in their stores also buy online.
With Target Plus, you can tap into Target’s market and reach shoppers that want your products.
Since little is known about Target Plus and how it works, there aren’t any threats to assess.
Sell on Walmart or Target: Which marketplace is better?
After seeing the Walmart vs. Target SWOT analysis, you’re probably wondering which is better for your business.
If you’re looking to dive into marketplace selling immediately, you’ll want to get started with Walmart Marketplace. While it does require a longer application process, you can still apply to sell on their site. It’s a great option if you’re looking to dive into a marketplace and start selling.
On the other hand, if you’re more selective and want to enter a marketplace with less competition, then Target Plus may offer a better fit. You’ll have to spend time building your brand and increasing brand exposure, but it will help increase your chances of Target discovering your company.
The right platform will depend on who you want to reach, and when you want to start selling.
Need help finding the right marketplace and getting started?
It’s tricky to know which marketplaces to use and how to get started. If you aren’t sure whether you should sell on Walmart or Target, our team of experts at WebFX can help.
We’ll help you choose the right marketplace for your business and help you get started. With our Walmart Marketplace services and Target Plus services, we’ll help you apply and add products to your marketplace.
You can feel confident that we’ll help you drive the best results for your campaign. Considering we’ve handled over nine million transactions for our clients in the past five years, you can count on us to have the knowledge and expertise to manage your marketplace.
If you’re ready to get started, contact us online or call us today at 888-601-5359 to speak with a strategist!
The post Should I Sell on Walmart or Target? Which Marketplace Is Best? appeared first on WebFX Blog.