Walmart (WMT) has decided to offer logistics services to third-party sellers to boost marketplace sales. The American big-box retailer announced the news at its 2024 Walmart Marketplace Seller Summit as part of several other initiatives. Importantly, Walmart Fulfillment Services (WFS) will allow sellers to use the company's supply chain to fulfill orders from any e-commerce website. WFS will also manage returns and deliver the goods in unbranded packaging at competitive rates.
Walmart expands services to attract retailers
Walmart's WFS will leverage its vast logistics network with advanced technology and supply chain management services to boost sales for independent merchants. The program is set to launch on September 10 to ensure a speedy delivery experience during the crucial holiday season. Additionally, Walmart announced that it will offer logistics services at rates that are at least 15% lower on average compared to competitors.
Additionally, Walmart announced the launch of Walmart Cross Border Import Services, which will ship imported goods from Asia directly to WFS facilities through the U.S. The company is also offering third-party merchants the option to ship small quantities or truckloads of goods at competitive rates using the Walmart Preferred Carrier program. Other initiatives include cash advances of up to $5 million to qualifying merchants and waiving peak season storage fees for merchants who store inventory in WFS centers through September 30.
Walmart's marketplace sales have grown by more than 30% annually over the past four quarters. The number of third-party sellers registered on the WMT marketplace has grown by 20% in fiscal 2023. Additionally, WMT's global e-commerce sales are expected to exceed $100 billion in 2023, and its U.S. e-commerce business has recorded double-digit growth over the past six quarters. However, these figures still fall short of the massive figures of rival Amazon.com (AMZN), which boasts dominance in the logistics sector. With its latest initiative, Walmart is strengthening its logistics business to better compete with AMZN's Amazon Fulfillment Services.
Should you buy or hold Walmart stock?
At TipRanks, WMT shares have a Strong Buy consensus rating based on 27 Buy and 3 Hold ratings. However, with WMT shares already up 45.9% so far this year, Walmart’s average price target of $74.11 suggests a potential downside of 2.7% from current levels.
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