Walmart Marketplace is a partnership between you and Walmart: Walmart provides your supplier business with a world-class e-commerce platform, and you take responsibility for your listings, inventory control, and, in many cases, delivering your products to customers.
Ensuring an excellent customer experience is important to Walmart, which is why it has high standards for its sellers. Fortunately, Walmart clearly defines its expectations so that you can optimize your processes and remain in compliance.
What Are Walmart Seller Performance Standards?
Walmart performance metrics define Walmart’s expectations of its Marketplace sellers. Your compliance with these standards reflects your ability to accurately and quickly fill orders, ensure product quality, and provide excellent customer service.
It’s important to understand that all Walmart Marketplace sellers are expected to remain in compliance with these metrics.
Why Walmart Performance Metrics Matter
Prioritizing Walmart performance metrics is more than a compliance measure. It’s also imperative for the supplier’s relationship to Walmart and the end customer. Walmart performance metrics matter because:
- They ensure continued business with Walmart. Performance metrics matter because you want to continue working with Walmart. If you fall short, you risk being removed from the Marketplace. Fortunately, Walmart provides you with access to your performance metrics so that you can check them whenever you need to and take corrective action.
- They help measure and enhance customer relationships. Metrics aren’t just about the threat of removal from the platform. They are also about customer relationships: When people buy your products online, they expect the quick delivery of a quality product. They also want to get their questions answered and know when to expect their item to be delivered. If you aren’t meeting customer expectations, your business will suffer. If you do meet Walmart’s standards, you’ll be able to cultivate customer loyalty.
- They offer insight into your business’s health. If you struggle to meet one or more metrics, it’s time to learn why you fall short. It may also be time to get help with your business.
5 Metrics That Matter to Walmart
Walmart Marketplace standards focus on five key areas that greatly impact the customer experience. Understanding these metrics, also known as Walmart Key Performance Indicators (KPI), is critical to your success on the Walmart Marketplace.
1. Cancel Rate
What is cancel rate?
The Walmart Marketplace cancel rate is the percentage of orders canceled by you, the seller, after you receive a Marketplace order.
Seller benchmark for cancel rate
Walmart expects its Marketplace sellers to maintain a seller cancellation rate of less than 2%.
How to improve cancel rate
When customers see a product for sale, they expect it to be available. Canceling a shopper’s order inconveniences shoppers and represents a lost sale for you. Walmart doesn’t like cancelations either, because shoppers will likely be frustrated by a seller cancelation and may take their business elsewhere.
Canceled orders are often caused by one of two things: Errors in your product listings or inventory management problems.
- Product listing errors range from price discrepancies to inaccurate product titles, photos, or descriptions. Good supplier processes include the creation of accurate listings and maintaining their accuracy. Templates and management systems like CEDCommerce can also standardize listings and check prices before your product goes live.
- Inventory management problems mean that you might not have enough inventory to fulfill the orders you receive. This problem is exacerbated by selling across multiple platforms. Inventory management tools can sync your platforms so that each reflects the amount of product you have available.
2. On-Time Delivery Rate (OTD)
What is on-time delivery rate?
Walmart Marketplace customers receive an expected delivery date when they make a purchase. Your on-time delivery rate is the percentage of orders that arrive at the customer’s doorstep on or before the expected delivery date.
Seller benchmark for on-time delivery rate
Walmart expects its Marketplace sellers to maintain an on-time delivery rate of 95% or greater.
How to improve on-time delivery rate
If you opt not to use Walmart Fulfillment Services (WFS), you are responsible for getting packages to customers. Your on-time delivery rate depends on your internal order fulfillment processes as well as your choice of carrier.
When shipping a product, it’s critical to choose a carrier that can deliver your product on time. It’s also your responsibility to monitor the performance of your chosen carrier or carriers: If they aren’t delivering on time, you need to work with a different service.
3. Valid Tracking Rate (VTR)
What is valid tracking rate?
Your carriers will provide a tracking number when you ship an order. You must enter this number when marking your orders as “shipped.” Your valid tracking rate is the percentage of orders with valid tracking numbers.
Seller benchmark for valid tracking rate
You must provide a tracking number for 99% or more of your Marketplace orders.
How to improve valid tracking rate
Tracking numbers serve several purposes: They confirm the shipment of an order and allow your customer to track the shipment. If the shipment is lost or there is a delay in shipping, the carrier uses tracking information to locate the parcel. To ensure that your valid tracking rate remains high, do the following:
- Work with reputable carriers that are capable of effectively tracking orders.
- Choose trackable delivery methods. USPS, for example, still offers some shipping options that aren’t trackable. These options are not acceptable for shipping Marketplace orders.
- Enter the tracking information correctly when marking an item as “shipped.”
4. Refund Rate
What is refund rate?
The refund rate is the percentage of refund requests you receive due to issues that your company is responsible for. Examples of such refunds include shipping a defective product or the wrong item.
Seller benchmark for refund rate
Your refund rate should be under 6%.
How to improve refund rate
You can improve your refund rate by ensuring your products are manufactured to a high standard, stored correctly, and packed accurately and securely.
5. Seller Response Rate
What is seller response rate?
Your seller response rate reflects your ability to respond within 48 hours to customer messages and questions.
Seller benchmark for response rate
Your seller response rate should be 95% or greater.
How to improve response rate
Check your message center often and respond to customer inquiries promptly. Remember: The 48-hour countdown begins when you receive the message… even if it arrives on a weekend, holiday, or day off.
How and Where to View Your Performance Metrics
It’s a good idea to check your performance metrics regularly. Log in to your Seller Center account and visit your Order and Fulfillment dashboard to check your rates. If you see a negative change in your metrics, even if you are within Walmart’s benchmark, take action. You don’t want a missed message or a lost package to hurt your business.
The Consequences of Non-Compliance
One reason to check your performance metrics frequently is that Walmart is doing the same. If you are out of compliance with Walmart’s performance indicators, expect Walmart to get in touch. You’ll be expected to address the issue immediately. Walmart may suspend or terminate your Marketplace Seller account if you don’t improve your compliance rates.
Some actions can result in the automatic termination of your Marketplace account. These include:
- Not maintaining compliant technology.
- Providing false information about your account or business.
- Using abusive language toward customers, associates, or fellow Marketplace sellers.
- Attempting to divert customers to another selling platform.
- Engaging in fraud, including changing prices after making a sale.
If you have any questions about the kind of activities that can get you banned from the platform, it is critical that you do your research and understand the behaviors that can result in your termination. Don’t assume that you know what these are: Learn about them and work with your team to ensure compliance.
How 8th & Walton Can Help
Getting used to a platform like Walmart Marketplace can be a huge challenge. Whether you are thinking about selling on Marketplace or are already doing so, 8th & Walton can help you improve your metrics and your sales through:
- One-on-one consultations that allow our experts to understand your organization and provide guidance in every aspect of your supplier business.
- Walmart onboarding for your whole team. We can help your managers and employees work effectively with Walmart.
- Need help with accounting, item creation, analytics, or supply chain logistics? We can help with all of these areas.
- Classes on every aspect of working with Walmart. Classes are taught live on Zoom allowing you and your team to learn from the comfort of your homes or at your workplace.
8th & Walton’s team of instructors and consultants include Walmart and Sam’s Club veterans with decades of experience working with Walmart and Sam’s Club’s systems and processes. In fact, Walmart’s e-commerce program was pioneered by some of our colleagues.
The Bottom Line
Selling on Walmart Marketplace is serious business: You can expand your brand, connect with new customers, increase sales, and make a lot of money.
Understand, however, that Walmart is protective of its brand and holds sellers to the standards it has set for itself.
If you are worried that your organization may not be able to meet these standards, reach out to our team. We can help get you on track.
