technology

Walmart Is Getting Picky About Online Marketplace Sellers

Walmart Inc.’s online marketplace is getting more choosy.

The retailer’s website -- where third-party vendors sell their own wares -- is adding far fewer sellers a month compared with a year ago, according to data tracker Marketplace Pulse. The site, which Walmart created in 2009 to compete with a similar offering from Amazon.com Inc., now includes about 18,000 sellers.

Seller Shortfall

The growth of vendors selling on Walmart's marketplace site has slowed in recent months

Source: Marketplace Pulse

The slowdown mirrors a deceleration in growth at Walmart’s e-commerce business last quarter, which spooked shareholders and renewed concerns about the investments Walmart is making to catch up with Amazon, such as its recent expansion of grocery home delivery to 100 markets. It also comes amid a whistle-blower lawsuit from a former marketplace executive. He claims he was fired after raising concerns about the company’s “overly aggressive push to show meteoric growth in its e-commerce business by any means possible -- even, illegitimate ones.”

“Since November they appear to have reduced the number of sellers they approve,” said Juozas Kaziukenas, founder of Marketplace Pulse. “Most U.S. marketplaces are adding thousands of sellers a day, so Walmart is doing the opposite by trying to manage it.”

Walmart’s U.S. e-commerce business generated $11.5 billion in revenue last year, and should do about $16 billion this year, but the company doesn’t disclose how much of that business comes from the third-party site. It has doubled the number of products available online over the past year to almost 75 million.

“We’re focused on adding the best items our customers want from the best sellers,” said Ravi Jariwala, a spokesman for Walmart. “In any given month, the number of new Marketplace sellers added to our platform may fluctuate as we continuously add new items and offer customers an expanding range of choices.”

Sellers must be preapproved by Walmart to enter its marketplace -- unlike Amazon’s, which takes all comers, many of whom never end up selling a single product, Kaziukenas says. Close to 3,000 sellers join one of Amazon’s global marketplaces each day, according to Marketplace Pulse, which tracks the sales performance and customer reviews of millions of online vendors. Amazon has more than 2 million sellers in the U.S. alone.

Marketplace sites get a cut of each sale made, typically around 15 percent, by handling the entire checkout process, shipping and any exchanges or returns.

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