Walmart Permits Amazon’s Multi-Channel Fulfillment Services: Implications for Brands – KJK

Walmart recently updated its shipping and fulfillment policies to permit its third-party merchants to use Amazon’s Multi-Channel Fulfillment (“MCF”) when fulfilling orders placed through Walmart’s marketplace. With this critical change, Walmart is enabling sellers to streamline inventory and fulfillment operations across both Walmart and Amazon, which should improve efficiency and delivery reliability for customers.

A Significant Shift for Sellers

Walmart’s decision is a significant shift, as previously, sellers could face suspension for using Amazon’s fulfillment services for orders placed through Walmart, even when going to great lengths, such as hiding Amazon’s branding on packaging. This adjustment should allow orders to process faster and promote a more seamless experience for customers.

With MCF, Amazon stores, packs, and ships products, even if the order originated from somewhere other than Amazon, like Walmart’s online marketplace, eBay, or other standalone e-tail websites. Generally, Walmart’s marketplace policies prohibit orders or packaging from referencing any other marketplace business or fulfillment provider, like Amazon. Now, Walmart permits Amazon’s MCF so long as packages are shipped in “neutral packaging using unbranded delivery vehicles, which means neither can display any logos, trademarks or branding of the other retailer.” As a result, Amazon’s delivery services are not permitted, and delivery should be made through alternate, approved carriers like USPS, UPS or FedEx. Merchants must also comply with Walmart’s minimum operational and shipping standards, such as timely processing and shipment tracking.

What Does this Mean for Brands?

The increase in cross-platform collaboration reflects a broader industry trend toward multichannel fulfillment flexibility. While the use of MCF may cut into merchants’ profit margins and raise consumer expectations, the use of MCF reduces barriers to entry that sellers previously faced when considering selling on multiple ecommerce platforms.

With that, channel control becomes more challenging as more channel conflict may occur. Now, a merchant can sell on the two largest ecommerce platforms—Amazon and Walmart—without using separate warehouses and fulfillment methods. Brands should expect those selling on Amazon, including unauthorized resellers, to take advantage of Walmart’s marketplace more frequently.

To combat this, brands should remain vigilant and continue to monitor the marketplaces for not just unauthorized resellers but to ensure that a preferred resellers’ practices are not running afoul of any obligations to marketplaces or other resellers. Brands should also consider updating their distribution policies and agreements to not only delineate between marketplaces but also emphasize the importance of a high-quality consumer experience and adequate storage, shipping and handling policies.

Contact

To review your marketplace strategies, please contact Alex Jones (AEJ@kjk.com), Kyle Stroup (KDS@kjk.com), Isra Ghanem (ITG@kjk.com) or anyone in KJK’s eCommerce practice group.