Why I Quit Dropshipping on Walmart
Table of Contents
- Introduction
- The rise of selling on Walmart
- Changes in Walmart's policies for returns
- The impact on sellers' businesses
- Issues with the new system
- The challenge of obtaining reimbursements
- Dealing with buyer claims of non-receipt
- The decision to stop dropshipping on Walmart
- Transitioning to Walmart Fulfillment Service (WFS)
- Exploring the potential of WFS for business growth
- Conclusion
Saying Goodbye to Dropshipping on Walmart
Dropshipping on Walmart seemed like a lucrative opportunity when I first started in late 2019. As one of the largest marketplaces in the US, it offered a wide customer base with minimal competition. However, recent policy changes regarding returns have compelled me to discontinue dropshipping on Walmart. This article will delve into the reasons behind this decision and explore the alternative of Walmart Fulfillment Service (WFS) as a promising avenue for business growth.
Introduction
The allure of selling on Walmart was hard to resist - a vast marketplace and the potential for significant sales. It quickly became one of the primary sales channels for my business, garnering attention from viewers on my channel. Despite the challenges faced by the Walmart marketplace, such as customer service issues, its promising future seemed evident. Walmart's support, superior to that of Amazon's, and plans for new tools like advertising and brand tools, as well as Walmart Fulfillment Service (WFS), added to its appeal.
The Rise of Selling on Walmart
When I began selling on Walmart, it was a time of great opportunity. With little competition, I could tap into one of the largest marketplaces in the US. The platform's popularity grew, and it became a frequent topic of discussion on my channel. However, as with any good thing, the progress eventually came to an end. A year ago, Walmart made significant policy changes regarding how they handled return claims from sellers. These changes would have a profound impact on my business and other sellers alike.
Changes in Walmart's Policies for Returns
While Walmart always required sellers to accept returns, the new policies transferred the financial burden of returns onto the sellers. Previous methods allowed sellers to create a claim stating that the item was received, with sufficient proof leading to refunds for both the seller and the buyer. However, Walmart implemented a new system that demanded strict proof in the form of signature confirmation, photo evidence, or proof of admission from the customer. Initially, I believed this policy change wouldn't heavily affect my business.
The Impact on Sellers' Businesses
Initially, I thought I had found a solution by adding signature confirmation to all orders, removing unprofitable items, and adjusting prices to account for the added cost. For two months, everything seemed fine, despite a few lost after delivery and lost in transit cases. However, it was during this period that I realized the flaws in the new system. I began losing around a thousand dollars per month due to these cases.
Issues with the New System
The first issue lies in the fact that even with sufficient proof, Walmart does not automatically reimburse sellers. Creating a case and providing proof doesn't guarantee reimbursement. Instead, I found myself engaged in a back-and-forth with Walmart's customer support. Their responses were often requests for further evidence or outright denials, even when the customer's signature matched the order exactly. This process not only consumed significant time but also required additional resources for a few sales.
The Challenge of Obtaining Reimbursements
The struggle to obtain reimbursements for lost after delivery and lost in transit cases was frustrating. Despite buyers signing for the orders, I still haven't been refunded for several cases. This means I'm left without the item cost and the buyer's payment, as Walmart has already refunded them. Such difficulties further amplified the losses and made dropshipping on Walmart increasingly unprofitable.
Dealing with Buyer Claims of Non-Receipt
Buyers claiming that items were never received or were lost in transit became a rampant issue on Walmart. In contrast to Amazon, where such cases occur only occasionally, nearly half of all my returns on Walmart were due to non-receipt or loss in transit claims. Moreover, many of these cases involved orders where the buyers themselves had signed for the items. Yet, I have still not received the refund, leaving me at a loss and the buyers retaining both the item and their money.
The Decision to Stop Dropshipping on Walmart
Considering the numerous issues faced with dropshipping on Walmart, I have made the difficult choice of taking down my dropshipping listings and ceasing business on the platform. The lack of profitability and the overwhelming challenges associated with returns have left me with no choice but to move away from dropshipping on Walmart.
Transitioning to Walmart Fulfillment Service (WFS)
While dropshipping may no longer be viable on Walmart, I am not completely leaving the platform. Instead, I will explore the potential of Walmart Fulfillment Service (WFS). Similar to Amazon FBA, WFS allows sellers to send their products to Walmart's fulfillment centers. Walmart stores, processes, and ships the products to customers, while also handling returns. This shift promises scalability, manageable operations, and relief from the burdensome process of dealing with returns.
Exploring the Potential of WFS for Business Growth
With my dropshipping venture no longer sustainable, I plan to delve into the workings of WFS and embrace it as a promising opportunity for my business. I believe WFS can provide a more efficient and profitable means of selling on Walmart. I intend to share more content regarding my experiences with WFS, as I see it as a significant step forward for my business. Stay tuned for future updates on this exciting fulfillment service.
Conclusion
As dropshipping on Walmart becomes increasingly disadvantageous due to policy changes and challenges with returns, sellers like myself are compelled to seek alternative solutions. While the decision to stop dropshipping wasn't an easy one, transitioning to Walmart Fulfillment Service offers new opportunities for business growth. With the ability to focus on sales rather than returns, I am optimistic about the scalability and manageability of this new approach.
