Wal­mart sees boost from wary Ama­zon mer­chants

Sell­ers head­ing to ri­val due to web gi­ant’s clut­tered mar­ket­place, steep fees


SEAT­TLE— Chad Rubin be­gan sell­ing vac­uum cleaner parts on Ama­zon.com in 2008 and turned it into a mul­ti­mil­lion-dol­lar busi­ness. But in re­cent years, Rubin has found it in­creas­ingly dif­fi­cult to com­pete on the clut­tered site, where he has been forced to buy ad­ver­tis­ing that cuts into his profit.

Last year, he de­cided to shift some of his busi­ness to an up-and-com­ing web­site where it’s eas­ier and cheaper to stand out: Wal­mart.com.

“Ama­zon sells 25,000 dif­fer­ent kinds of toi­let pa­per hold­ers,” says Rubin, who is ac­tu­ally un­der­count­ing a prod­uct with more than 70,000 search re­sults on the site. “How do you win and dif­fer­en­ti­ate in that en­vi­ron­ment?”

In the last year, thou­sands of mer­chants such as Rubin have an­swered that ques­tion by sign­ing on with Ama­zon’s big­gest ri­val.

The no­tion of Ama­zon mer­chants sell­ing through Wal­mart.com would have been ris­i­ble just a few years ago. But much has changed. Wal­mart’s strug­gling e-com­merce op­er­a­tions have shown signs of life since the com­pany ac­quired startup Jet.com last year and put its co-founder, Marc Lore, in charge. Mean­while, among mer­chants, Ama­zon has earned a rep­u­ta­tion as a de­mand­ing and cranky land­lord, kick­ing sell­ers off its mar­ket­place when cus­tomers com­plain and reach­ing deeper into their pock­ets with steeper fees and new ad­ver­tis­ing prod­ucts that mer­chants say are now re­quired to get a sale.

For mer­chants, Wal­mart to­day is what Ama­zon was a decade ago: a vast fron­tier with room to grow. Ama­zon, mean­while, is reap­ing the re­wards of its pop­u­lar­ity. It at­tracts 180 mil­lion unique web vis­i­tors each month, about dou­ble Wal­mart’s traf­fic, and can charge mer­chants ac- cord­ingly to get a piece of the ac­tion.

The over­crowd­ing on Ama­zon.com is of par­tic­u­lar con­cern to mer­chants gen­er­at­ing al­most all of their sales there.

Last year, Robert Roque be­gan putting in­ven­tory from his health and beauty busi­ness on Wal­mart.com and Jet. About half his sales are now on Ama­zon — down from 90 per cent — due to the quick surge he’s see­ing on Wal­mart.

“We had to di­ver­sify,” he says. “We could not sit back and de­pend on Ama­zon and have all our eggs in one bas­ket.”

Wal­mart has a long and con­tentious his­tory with its sup­pli­ers — us­ing its thou­sands of brick-and-mor­tar stores and mil­lions of shop­pers as lever­age to pres­sure them to cut prices.

The world’s big­gest re­tailer has good rea­son to be more ac­com­mo­dat­ing to its on­line mer­chants. While Wal­mart’s on­line store has gen­er­ated im­pres­sive sales growth in re­cent quar­ters, it hosts mere thou­sands of sell­ers ver­sus Ama­zon’s two mil­lion­plus. Wal­mart needs to catch up if it is to match Ama­zon’s rep­u­ta­tion as the Ev­ery­thing Store.

“You don’t want to have a shop­per look for some­thing on your site and not find it, be­cause you might lose that cus­tomer for good,” says David Spitz, whose Chan­nelAd­vi­sor works with Wal­mart to re­cruit new sell­ers.

Though Ama­zon’s mar­ket­place is open to vir­tu­ally any­one who goes through an on­line regis­tra­tion process, Wal­mart is in­vite-only be­cause the com­pany wants to vet sell­ers be­fore giv­ing them ac­cess to its cus­tomers.


Wal-Mart’s ac­qui­si­tion of Jet.com is ac­cel­er­at­ing its progress in e-com­merce.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.