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How to Do Two-Step Dropshipping on Walmart?

Quick answer: Two-step dropshipping on Walmart means you first buy inventory from your supplier and route it through your own address or a prep center, then ship it to the customer under your own brand when a sale happens. This keeps you as the seller of record and complies with Walmart’s policy, unlike direct retailer-to-customer dropshipping.

How to Do Two-Step Dropshipping on Walmart

In this comprehensive guide, we will explain how to do two-step dropshipping on Walmart. This model provides the flexibility and low upfront investment of traditional dropshipping while offering more control and better risk management.

What is Two-Step Dropshipping?

Two-step dropshipping differs from traditional dropshipping in that it involves working with a middleman supplier rather than sourcing directly from manufacturers. The first step is to purchase products in small quantities from a supplier, which can be stored in a local warehouse or fulfillment center. The second step is to ship the products directly to your customers when they make a purchase.

This method provides several advantages:

  1. Faster Shipping: By holding some stock in a local warehouse, you can reduce shipping times compared to sourcing products directly from overseas manufacturers.
  2. Better Control: You have more control over quality, packaging, and delivery, which can help reduce errors and returns.
  3. Lower Risk of Stock Outs: Since you’re managing a small inventory, you can avoid situations where a manufacturer is out of stock.

Step-by-Step Guide How to Do Two-Step Dropshipping on Walmart?

Step 1: Set Up Your Walmart Seller Account

Before you can start two-step dropshipping on Walmart, you need to become a Walmart Marketplace seller. Here’s how:

a. Apply for a Walmart Seller Account
To begin selling on Walmart, you must apply and be approved as a seller. Walmart has a strict vetting process, and they prefer established businesses with strong reputations. To apply, go to the Walmart Marketplace application page and provide:

Once approved, you’ll receive an invitation to set up your account and start listing products on the platform.

Learn More: How Do I Apply for a Walmart Business Account?

b. Set Up Seller Central
Walmart’s Seller Central is where you manage your products, orders, and business operations. Once you have access, you’ll want to:

Step 2: Find Reliable Suppliers

Finding reliable suppliers is a key aspect of two-step dropshipping. You’ll be working with suppliers who can provide products in bulk, which you’ll then store and ship from a local warehouse or fulfillment center.

a. Research Suppliers
There are some ways to find trustworthy suppliers:

b. Vet Your Suppliers
Before committing to a supplier, ensure they meet your quality and reliability standards. Ask for product samples, review their return policies, and inquire about shipping times. A reliable supplier is key to the success of your two-step dropshipping business, as they will be responsible for providing you with inventory on time.

Step 3: Choose a Fulfillment Partner

Since two-step dropshipping involves holding a small amount of inventory, you need a reliable fulfillment center to handle warehousing and shipping. Some popular options include:

Benefits of Using a Fulfillment Partner

Step 4: Create Product Listings on Walmart

With your supplier and fulfillment partner in place, it’s time to start listing your products on Walmart. Creating high-quality product listings is essential for visibility and sales.

a. Optimize Product Titles and Descriptions
Your product title and description must be optimized for Walmart’s search algorithm and customer readability. Follow these guidelines:

b. Use High-Quality Images
Walmart requires product images to meet specific guidelines. Your images should be clear, high-resolution, & show the product from multiple angles. Use lifestyle images where possible to give customers a better understanding of how the product will fit into their lives.

c. Set Competitive Pricing
Pricing is a major factor in Walmart’s marketplace. The platform encourages competitive pricing, so you should research your competitors and ensure your prices are reasonable. However, don’t set prices so low that you eat into your profit margins.

Step 5: Manage Orders and Inventory

Once your listings are live, you need to actively manage orders and ensure inventory levels are maintained.

a. Monitor Inventory Levels
Keeping track of your inventory is critical in two-step dropshipping. Since you’re working with limited stock at a fulfillment center, you need to monitor inventory levels closely and reorder products before they run out. Most fulfillment centers offer inventory management tools to help with this.

b. Process Orders Quickly
When a customer places an order on Walmart, the order is sent to your fulfillment center for processing. You must ensure that orders are processed quickly and shipped according to Walmart’s shipping standards. Delayed shipping or inaccurate tracking can lead to poor customer reviews and lower visibility on Walmart’s marketplace.

Step 6: Optimize and Scale

As your two-step dropshipping business on Walmart grows, you’ll need to optimize your operations and scale up to increase revenue.

a. Use Walmart’s Advertising Tools
Walmart offers advertising tools, such as Walmart Sponsored Products, to help boost visibility and drive more sales. By using ads, you can target specific keywords and products to appear at the top of search results or within product categories.

b. Analyze Sales Data
Use Walmart’s Seller Central analytics tools to track sales performance, customer reviews, and pricing trends. Understanding what’s working and what needs improvement will help you make data-driven decisions.

c. Expand Your Product Line
As your business grows, consider joining more products to your store. Use the data from your current listings to identify new opportunities, such as related products or new categories.

Conclusion

Two-step dropshipping on Walmart provides the perfect balance between the flexibility of dropshipping and the control of traditional retail models. By working with reliable suppliers and fulfillment centers, you can offer fast shipping and better quality control, making your business more competitive in the Walmart marketplace.

Setting up your Walmart dropshipping store requires careful planning, from finding the right suppliers to managing inventory and shipping. However, with the right approach, you can create a scalable and profitable business that meets customer demands and thrives in the e-commerce world.

By following the steps outlined in this guide, you’ll be well on your way to launching a successful two-step dropshipping business on Walmart, setting the stage for long-term growth and profitability.

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Frequently Asked Questions

What is two-step dropshipping?

Instead of shipping directly from a retailer to the buyer, you route products through your own inventory or a prep center first, then fulfill orders yourself. This makes you the true seller of record.

Why is two-step dropshipping better for Walmart?

It complies with Walmart’s rule that you must fulfill from your own inventory, avoiding the ban on shipping from another retailer like Amazon.

Do I need a prep center for two-step dropshipping?

A prep center or your own storage helps you receive, inspect, and rebrand inventory before shipping, making the two-step model smoother and more compliant.