Walmart To Pilot Third-Party Fulfillment Strategy

Walmart has revealed it is testing out a fee-based service called “Fulfilled by Walmart.”

The company’s U.S. eCommerce chief, Marc Lore, announced the news at an industry conference this week, explaining the service aims to help Walmart’s online unit generate more revenue, as well as enable it to move more items from third-party merchants. Lore did not provide any further details, according to Bloomberg.

There has been speculation that Walmart would move in this direction, with its large warehouses and fleet of 6,500 trucks. There’s no doubt the company is hoping the service could help stabilize its losses, which Morgan Stanley estimates may reach $1.7 billion this year.

The service will take on “Fulfillment By Amazon,” which launched in 2006. Merchants readily pay the eCommerce giant to deliver goods to customers faster through its own distribution networks. In fact, three out of four Amazon sellers use fulfillment by Amazon, and in its second quarter, the company’s revenue from “third-party seller services” went up 23 percent to almost $12 billion.

On a call with reporters in August, Lore said fulfillment “will be a future part of marketplace.”

The service is “exactly what [Walmart] should be doing,” said Juozas Kaziukenas, founder of data tracker Marketplace Pulse.

This isn’t the only delivery news from Walmart this week; the company announced that it plans to grow the reach of Delivery Unlimited to 1,400 stores later this autumn. The offering allows shoppers to pay a monthly or yearly fee to get unlimited Walmart Grocery Delivery orders.

“We’ve been investing in our online grocery business by quickly expanding our Grocery Pickup and Delivery services. Delivery Unlimited is the next step in that journey,” said Tom Ward, senior vice president of Digital Operations for Walmart U.S. “By pairing our size and scale and these services, we’re making Walmart the easiest place to shop. Combine that with the value we can provide, our customers can’t lose.”