Amazon/Walmart Battleground Shifts to Suppliers’ Financial Health

For Amazon and Walmart, crafting the perfect commerce ecosystem means locking in sellers’ loyalty.

Suppliers, too, to keep supply chains intact.

To keep small- to medium-sized businesses (SMBs) sealed into their respective marketplaces, the two commerce behemoths are focused on the financial health of those merchants.

We’re in what might be charitably called a challenging macroeconomic environment.

For these smaller enterprises, access to capital is critical, and getting funds into the corporate coffers with speed means that it becomes easier to manage operations and they can, in turn, access the inventory and items that they sell to the consumers on Amazon’s and Walmart’s marketplaces. This keeps customers happy, boosting subscriptions to Prime and Walmart+. And in the background, Amazon and Walmart help spur merchants to use fulfillment services to get goods to the consumers’ doorsteps.

It’s a virtuous cycle. In recent days and weeks, we’ve seen the Amazon/Walmart battleground broaden and deepen to focus even more on the seller and the suppliers’ side of the equation.

Amazon Eyes Speedier Payouts

Amazon this week announced the availability of Express Payout for Amazon Pay. The result is that merchants get paid more quickly, sidestepping the traditional three to five days it takes money to settle via automated clearing house (ACH) transfers. And merchants can receive deposits of up to $1 million within 24 hours.

“For Amazon, there’s a cross-pollination effect: conceivably, Express Payouts can become a point of leverage to incentivize sellers to become Amazon Pay merchants,” PYMNTS reported. “And as these merchants add Amazon Pay to their online stores, there’s at least the chance to jockey for a share of consumer mind and wallet share,” which would help cement some competitive advantage against Walmart.

Walmart Bridges Suppliers’ Cash Flow Divide

Walmart’s own most recent forays into the working capital realm for SMBs include the announcement that it is working with Citi, bringing the Bridge built by Citi lending platform to Walmart’s roughly 10,000 U.S. suppliers. The joint efforts connect suppliers with potential lenders for capital up to $10 million.

Rohit Mathur, head of Bridge built by Citi, told Karen Webster in an interview that “online lenders and other [FinTech] solutions are really focused on microloans and lending products that are less than $100,000 — but the business needs of SMBs looking for something in the range of $50,000 are different. Thinking about point-of-need financing. If you need the loan to deliver the product to a large client, like Walmart, financing can really propel a business to the next level.”

For those suppliers, then, the advantage is in having a large, dependable customer, and for Walmart the advantage lies in having supply. The latest initiatives with Citi come as Walmart has already had its Sellers Funding functionality. Walmart has said that more than 10,000 users have so far enlisted services such as working capital and daily marketplace advances since 2018.

The jockeying between Amazon and Walmart will only get more intense — and it’s the SMB business community that may benefit overall.

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