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Third-party sellers are individuals or companies that sell products on Amazon and Walmart. They can be both small businesses or large conglomerates or really can be anyone, that uses Walmart or Amazon’s marketplace to sell directly to customers.
Amazon and Walmart allow third-party sellers to list their products on their respective websites. Doing so gives these third-party sellers access to a wider customer base.
In order for a seller to list their product on Amazon, they need to provide information about the product, upload pictures of the product, and set the price for the item. The same process applies to Walmart as well.
Most of the buyers out their turn to Amazon when deciding to shop online, and Fulfillment by Amazon or FBA provided Amazon with an advantage. With free fast shipping for Prime members. But more recently Walmart has introduced Walmart Fulfillment Services or WFS, which is their adaptation of FBA.
Online marketplaces serve as bustling hubs for vendors, yet the presence of third-party sellers introduces a host of challenges that could jeopardize both consumer trust and brand integrity.
Despite some marketplaces implementing vetting processes, such as requiring government-issued IDs and tax numbers, these credentials can easily be forged or stolen. This loophole allows fraudulent sellers to infiltrate the marketplace, posing as legitimate vendors without consequence.
Fraudulent sellers often exploit the marketplace’s scale by listing intellectual property-infringing products. These include counterfeit items and grey market goods, which are genuine products distributed through unauthorized channels. Such practices not only undermine brand value but also cut into legitimate revenue streams.
One of the most troubling issues is the challenge consumers face in distinguishing real products from counterfeits. Grey market goods, although authentic, blend seamlessly with authorized products, making differentiation nearly impossible for the average shopper. This confusion can lead to purchases of inferior, or even hazardous, goods.
For brands, the consequences extend beyond lost sales. The presence of fake and grey market goods can severely damage a brand’s reputation. Customers encountering poor quality or unsafe products may lose trust in a brand, leading to long-term detriment to brand image and consumer loyalty.
By addressing these issues, online marketplaces can create a safer, more reliable shopping environment for consumers and preserve the integrity of brands.
Amazon is the world’s largest online retailer, and the most popular, but Walmart seems to be fast picking up steam.
At the moment Amazon’s customer base is way larger than Walmart’s, within 2021 65% of US Consumers shopping on Amazon compared to the 37% of consumers shopping on Walmart. This makes Amazon the largest online marketplace for 3rd party sellers. But with that being said Walmart’s customer base shows considerable growth every year, so you know there is no lack in shoppers.
In my opinion, it really comes down to preference of where people would rather shop from. As both Amazon and Walmart offer fast shipping through their fulfillment services. With Walmart offering the Walmart+ membership that is to compete with the Amazon Prime membership.
Selling on Amazon or Walmart? Or maybe Selling on Both.
You decide, and to help you I will give you a brief run-through of what you will need to do so.
The Buy Box is a crucial feature on Amazon’s product pages, prominently located on the right side where you’ll find the “Buy Now” button. It’s the gateway for most sales, making it a hotly contested spot among sellers.
Unlike other marketplaces, Amazon utilizes a unified product card system, identified by an Amazon Standard Identification Number (ASIN). This means multiple sellers offering the same item compete for a single product display rather than individual listings.
Winning the Buy Box is incredibly significant. Research shows around 82% of Amazon’s sales funnel through this feature, making it the primary method shoppers use to purchase items. The visibility advantage is clear: most consumers rarely click through the less conspicuous “new or used” options to view other sellers, thereby boosting the sales for whoever holds the Buy Box.
Amazon doesn’t openly share the exact formula for winning the Buy Box, but several key factors typically play a role:
A potential risk arises if a fraudulent seller captures the Buy Box. This scenario can lead to the proliferation of counterfeit or unauthorized products, which not only harms legitimate brands but also jeopardizes consumer trust and satisfaction.
In summary, the Buy Box is a pivotal element of Amazon’s marketing strategy with a direct impact on competitive dynamics. Sellers aiming for success must focus on optimizing the aforementioned factors to secure and maintain this advantageous real estate on the product page.
One of the differences you will notice is to sell on Walmart you need to request to sell on Walmart Marketplace. This consists of an application process that will take a few minutes and the following info:
After you have been approved to sell you will start the registration process. First,
1 – You will need to create your account ( username and password)
2 – Review the Walmart retailer agreement.
3 – Register your company.
4 – Fill out a W-9 form for tax purposes
5 – Payment info
6 – Select Shipping Methods
Finally, list your products and start selling.
When it comes to online marketplaces, third-party sellers pose notable challenges for brand protection experts. The very nature of these platforms, even those that attempt some level of vetting, leaves them vulnerable to fraudulent activities.
Many marketplaces require credentials like government IDs and tax numbers to register sellers. However, the verification of these documents often lacks depth, making it relatively easy for counterfeiters to submit forged or stolen identities. This loophole allows unscrupulous individuals to infiltrate the platform.
Once onboard, fraudulent sellers may flood the market with products that infringe on intellectual property rights. This includes both grey market goods—which are genuine but distributed through unauthorized channels—and outright counterfeit items. For consumers, differentiating between genuine and fake products is a growing challenge, as counterfeit items often mimic the appearance of original ones.
Beyond brand image, there are significant risks to consumer safety. Poorly-made counterfeit products can be of inferior quality or even dangerous, leading to potential harm for unsuspecting buyers.
The presence of counterfeit or unauthorized products can severely impact a brand’s reputation. Trust diminishes as consumers become uncertain about the authenticity of their purchases. Furthermore, brands suffer financially due to lost sales and potential erosion of their customer base.
In conclusion, the activities of third-party sellers create a complex array of risks for brands, from reputational damage to consumer safety issues. It’s crucial for brands to develop robust strategies to monitor and combat these threats effectively.
Ensuring your brand’s integrity and safeguarding your customers from unauthorized third-party sellers is crucial. Here are some effective strategies to implement:
1. Online Brand Protection Program
Develop a comprehensive brand protection strategy to counteract IP infringements. This program should encompass proactive surveillance of online marketplaces where your products are sold.
2. Marketplace Monitoring
Leverage advanced monitoring tools combined with expert analysis to keep an eye on unauthorized listings. This allows you to identify harmful listings across multiple marketplaces, safeguarding your brand’s reputation globally.
3. Conduct Test Purchases
Execute test purchases to gather concrete evidence on the origin and authenticity of products. This practice helps in collecting admissible proof about seller behavior, allowing you to take decisive action if necessary.
4. Enforce Your IP Rights
Once you spot infringements, it’s crucial to act swiftly. Implement enforcement measures to ensure any listings violating your intellectual property rights are removed from the marketplace. This helps in protecting both your brand and its customers from low-quality or counterfeit products.
5. Customize Your Protection Strategy
Tailor your brand protection efforts to meet the specific needs of your business. Understanding the unique challenges your brand faces will enable you to effectively counteract threats from third-party sellers and prevent revenue loss.
By adopting these strategies, you can maintain the integrity of your brand and foster trust with your customers while combating the threats posed by unauthorized sellers.
As per Amazon, the process is a bit easier. First, start by choosing a selling plan. (Individual plan or Professional plan).
After that create an Amazon seller account. For this you will need the following:
1 – Business email address or Amazon customer account
2 – Bank account number and bank routing number
3 – Chargeable credit card
4 – Government-issued national ID
5 – Tax information (you may use your SSN here)
6 – Phone number
Start adding your listings and you are ready to go.
When a fraudulent seller manages to secure the Buy Box on popular e-commerce platforms like Amazon, it can lead to significant consequences for both customers and the marketplace. Here’s how:
Increased Risk of Counterfeit Products: Fraudulent sellers often supply counterfeit or illicit goods. When these products win the Buy Box, unsuspecting customers may end up purchasing fake items instead of the genuine ones they intended to buy.
Degrading Customer Trust: The Buy Box is typically associated with trust and reliability. When customers receive subpar or fake products from the Buy Box, their trust in the platform and its sellers diminishes, affecting their overall shopping experience.
Brand Reputation Damage: Even though the fraudulent seller is at fault, the brand suffers a hit to its reputation. Customers may associate the experience with the brand itself, leading to a decrease in brand loyalty and future sales.
Customer Service Nightmares: Receiving counterfeit items often leads to customer complaints, returns, and negative reviews. This creates an overwhelming volume of customer service issues for legitimate sellers to address, eroding their resources and time.
Market Disruption: Genuine sellers face unfair competition as fraudulent listings undercut prices with lower-quality fake products. This distortion in pricing and quality standards can destabilize the market, making it difficult for authentic sellers to compete.
By understanding these impacts, consumers can remain vigilant and make informed purchasing decisions, while platforms can work to improve their measures against fraudulent activity.
When shopping online, you may wonder if you’re buying directly from the marketplace or a third-party vendor. Here’s how to find out:
Check the Seller Information: Look closely at the product listing. You’ll find a line that states “Sold by.” If it mentions any name other than the marketplace itself, you’re dealing with a third-party seller.
Seller Profile: Clicking on the seller’s name will take you to their profile. Here, you can gather more information about their ratings and reviews, which can provide insights into their reputation.
Customer Reviews: Often, other buyers will mention in reviews whether they dealt with a third-party seller and share their experiences. This can be a valuable source of information.
Return Policies: Third-party sellers may have different return policies compared to the marketplace. Check the return policy section for any specifics.
By carefully examining these details, you can confidently determine whether you’re purchasing directly from the marketplace or through a separate vendor.
Third-party sellers hail from virtually every corner of the globe. This diverse pool ranges from your local grocery store to major international distributors.
For example, on various online marketplaces, sellers from all over the world converge. European platforms often attract local vendors, like German sellers on German sites and French sellers on French platforms. Yet, no matter the region, it’s common to find sellers from countries such as China, the United States, Brazil, and many others.
The geographic reach of third-party sellers is incredibly broad, allowing consumers worldwide access to a range of products and cultural influences, seamlessly bridging global markets.
Final Thoughts
While selling on Walmart you may deal with less competition compared to the high levels of competitors on Amazon, you will also need to take into account all the different seller fees ( account fees, sales fees, etc)
As we could see both Amazon and Walmart offer advantages, as well as their own routes to success.
Now it is up to you which one to choose to start or grow your business.