Understanding Walmart Marketplace Fees: What Sellers Need to Know
Walmart Marketplace offers an exciting opportunity for sellers to reach a vast audience by listing their products on Walmart’s platform. However, understanding and managing Walmart Marketplace fees is crucial for optimizing profitability and running a successful online business.
This guide explores Walmart Marketplace fees, including referral fees, fulfillment costs, sales tax considerations, and strategies to effectively manage these expenses. Additionally, we’ll cover the costs to sell on Walmart, how sellers are paid, and the dos and don’ts of pricing items on Walmart Marketplace.
What Is the Cost to Sell at Walmart?
Selling on Walmart Marketplace comes with a variety of costs, each of which can affect your overall profitability. Understanding these costs upfront is essential to making informed decisions about product pricing, inventory management, and overall strategy. The primary costs include:
Referral Fee: A percentage of the total sales price of each item sold, varying by product category.
Monthly Subscription Fees: A fixed fee is charged to maintain your seller account on Walmart Marketplace.
Fulfillment Fees: If you use Walmart Fulfillment Services (WFS), fees will be charged for storing, picking, packing, and shipping your products.
Walmart Marketplace Sales Tax: Managed by Walmart, but sellers must ensure compliance by setting up the correct shipping sales tax codes.
Other Potential Costs: Additional costs may include advertising, return processing fees, and more.
Each of these costs plays a role in shaping your pricing strategy and overall business model on Walmart Marketplace.
Types of Walmart Marketplace Selling Fees
Walmart Marketplace fees can be complex, but understanding them is essential for effective financial planning. Let’s break down each type of fee you’ll encounter:
1. Referral Fees
Referral fees are a percentage of the total sales price of each item sold on Walmart Marketplace. These fees vary by product category and can significantly impact your pricing strategy and profitability.
Referral Fees for Walmart Product Categories
Referral fees differ depending on the product category. Below is a detailed breakdown of referral fees for various product categories on Walmart Marketplace:
Apparel & Accessories: 5% for items with a total sales price of $15 or less; 10% for items priced between $15 – $20; 15% for items priced greater than $20.
Automotive & Powersports: 12%.
Baby: 8% for items with a total sales price of $10 or less; 15% for items priced greater than $10.
Beauty: 8% for items with a total sales price of $10 or less; 15% for items priced greater than $10.
Books: 15%.
Jewelry: 20% for the portion of the total sales price up to $250; 5% for the portion of the total sales price greater than $250.
Example Calculation:
For a product in the Apparel & Accessories category with a total sales price of $25, the Walmart referral fee would be:
Referral Fee = Total Sales Price × Referral Fee Percentage
Referral Fee = 25 × 0.15
Referral Fee = $3.75
This calculation demonstrates how referral fees directly impact your profit margins, making it crucial to understand these fees when pricing your products.
2. Monthly Subscription Fees
Walmart Marketplace charges a monthly subscription fee for maintaining your seller account. This fee is fixed and covers the cost of listing products and accessing Walmart’s platform.
Example:
Monthly Subscription Fee: $39.99
This fee remains constant regardless of the number of products listed or sold, so it’s important to factor it into your overall cost calculations.
3. Walmart Standard Fulfillment Fees
Walmart, like Amazon, provides an all-in-one fulfillment service called Walmart Fulfillment Services (WFS). Through WFS, sellers can store and ship inventory without any minimum or maximum limits. However, there are specific fees associated with this service, including referral fees.
Standard Fulfillment Fee
A product qualifies as “standard” if it meets the following criteria:
Weight: 150 lbs or less
Dimensions: Longest side is 108 inches or less
Girth: Longest side + girth is 165 inches or less
For items weighing less than 1 lb., the fee is determined by unit weight. For items between 1 lb. and 150 lbs. Walmart uses either the unit weight or the dimensional weight, whichever is greater. Dimensional weight is calculated by dividing the unit’s volume in inches (length x width x height) by 139. Additionally, 0.25 lb. is added for packaging materials, and the total is rounded up to the nearest pound.
Shipping Weight Fees
Up to 1 lb.: $3.45
2 lbs.: $4.95
3 lbs.: $5.45
4–20 lbs.: $5.75 plus $0.40 for each lb. over 4 lbs.
21–30 lbs.: $15.55 plus $0.40 for each lb. over 21 lbs.
31–50 lbs.: $14.55 plus $0.40 for each lb. over 31 lbs.
51 lbs. or more: $17.55 plus $0.40 for each lb. over 51 lbs.
Note: Items over 50 lbs. may take longer than two days to deliver as they are shipped via ground transportation.
Additional Fees for Standard Items
Apparel: Add $0.50 for clothing items.
Hazardous Materials: Add $0.50 if the item contains chemicals, aerosols, pesticides, or batteries.
Low-Priced Items: Add $1.00 for items priced under $10.
Oversized Items:
If the longest side exceeds 48 inches but is 96 inches or less, or if the longest side + girth exceeds 105 inches but is 130 inches or less, add $3.00.
If the longest side exceeds 96 inches but is 108 inches or less, or if the longest side + girth exceeds 130 inches but is 165 inches or less, add $28.00. The minimum unit weight starts at 90 lbs. for calculating the fulfillment fee.
Big & Bulky Fulfillment Fees
Walmart applies big & bulky fees for items that meet at least one of the following conditions:
Weight: Greater than 150 lbs. but up to 500 lbs.
Dimensions: The longest side exceeds 108 inches but is 120 inches or less
Girth: Longest side + girth exceeds 165 inches
For these items, the fee starts at $155, plus $0.80 per pound for weight over 90 lbs.
4. Walmart Fulfillment Service Storage Fees
Storage fees under WFS are calculated based on the space your products occupy in Walmart’s fulfillment centers. These fees are typically charged on a monthly basis and vary depending on the time of year:
Standard Storage Fee: A set rate per cubic foot of storage space used.
Peak Season Storage Fee: Higher rates may apply during peak seasons like the holiday period.
January–September: $0.75 per cubic foot per month.
October–December (peak season):
$0.75 per cubic foot per month for items stored for up to 30 days.
Additional $1.50 per cubic foot per month for items stored beyond 30 days.
More than 12 months: Up to $7.50 per cubic foot per month.
These fees incentivize efficient inventory management, as overstocking can lead to higher storage costs, while understocking might result in missed sales opportunities.
5. Shipping Sales Tax Codes
Sales tax on shipping costs is another critical aspect. Walmart handles the collection of sales tax, but you must set up the correct shipping sales tax codes in your Walmart seller center to ensure compliance with state and local tax regulations.
Example:
Shipping Sales Tax Code: 7%
Shipping Cost: $10
For a shipping cost of $10, with a sales tax rate of 7%, you would collect $0.70 in sales tax on shipping.
How Are Sales Taxes Determined on Walmart?
Sales tax collection on Walmart Marketplace is largely automated by Walmart. However, sellers need to understand how taxes are applied to ensure compliance.
Items Purchased from Walmart Marketplace: Walmart automatically collects and remits sales tax for items sold by third-party sellers based on the shipping destination. Sellers must set up the correct sales tax codes in their Seller Center to ensure proper tax calculation.
Items Purchased Directly from Walmart.com: When customers purchase directly from Walmart’s inventory, Walmart is responsible for collecting and remitting sales tax. This process is seamless and requires no action from the seller.
Understanding these differences is important for ensuring compliance with state and local tax laws while selling on Walmart Marketplace.
How Are Sellers Paid on Walmart?
Walmart Marketplace sellers are paid via direct deposit into their bank accounts. Payments are typically disbursed every two weeks, though the schedule may vary depending on factors such as the seller’s performance and account standing.
Steps to Get Paid:
Link Your Bank Account: Ensure that your bank account is correctly linked to your Walmart seller account, as this is where Walmart will deposit your earnings.
Payment Processing: Walmart processes payments for completed orders, deducting any applicable fees before disbursing the funds.
Regular Payment Schedule: Sellers on Walmart receive payments on a regular schedule, helping them manage cash flow and plan for expenses.
Staying on top of your payments and understanding how Walmart’s payment system works is crucial for maintaining financial stability.
Dos & Don’ts While Pricing the Items on Walmart
Pricing strategy is crucial for success on Walmart Marketplace. Here are some dos and don’ts to keep in mind:
Do: Price competitively to increase your chances of winning the buy box.
Do: Factor in all fees, including referral, fulfillment, and storage fees, when setting your prices.
Do: Monitor competitor pricing regularly to adjust your strategy as needed.
Don’t: Ignore Walmart’s price parity and price leadership rules, which require competitive pricing.
Don’t: Overprice your products, as this can lead to poor sales and loss of the buy box.
Don’t: Forget to account for seasonal pricing trends and adjust your prices accordingly.
By following these guidelines, you can optimize your pricing strategy to maximize sales and profitability on Walmart Marketplace.
Conclusion
Managing Walmart Marketplace fees can be challenging, but it’s important for your success. By understanding referral fees, fulfillment costs, and sales tax considerations, you can better manage your pricing and improve your profitability. Use Walmart’s tools, keep track of your costs, and adjust your strategy as needed to succeed as a Walmart Marketplace seller.
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