Ep. 1 - Mastering Walmart’s Ecosystem: 1P, 3P, and the Power of Omnichannel

Ready to turn Walmart into your strongest growth channel? We break down exactly how to choose between 1P, DSV, and 3P, why WFS unlocks conversion and rank, and how to use marketplace proof to win store distribution with less risk and more leverage. Instead of pitching hypotheticals, we show how to arrive at hard data, conversion rates, search share, and regional heat maps that give buyers confidence and help you scale smart.

We start with the selling frameworks: store‑shared assortments that power true pickup and delivery, .com‑only assortments for controlled inventory and pricing, and the 3P paths that maximize flexibility. Then we get tactical. Map your product to the right category and product type, align titles with real shopper keywords, and secure fast two‑day coverage. Build a lead SKU for volume and flankers for digital shelf presence, so your brand shows up broadly across the queries that matter. If you’re launching a new mod, use 3P to solve the cold start problem: seed reviews, buy early visibility with efficient Walmart Connect, and flip that momentum into 1P with a compelling strike‑through that lifts conversion.

We also dig into the bigger picture. Walmart’s partner‑first approach is changing the seller experience, from easier onboarding to tougher action on counterfeits and unauthorized resellers. Their EDLP focus keeps search honest and pushes brands to deliver real value. And the AI wave is here: from supplier tools to shopping assistants and a growing OpenAI referral channel, discovery is shifting fast. Brands that keep inventory healthy, content clear, and delivery fast will ride these surfaces as they expand.

If you’re serious about owning your retail, protecting margins, and building an omnichannel flywheel, this playbook will get you moving. Subscribe, share with a teammate who needs a Walmart strategy refresh, and leave a review with your biggest Walmart growth question so we can tackle it next.

Transcript

Welcome And Omnichannel Focus

SPEAKER_00 0:06

Good morning everyone. Welcome to the Marketplace Code, a podcast where you'll be learning everything you need to know about Walmart.com and how to master the Walmart space. Here today, it's myself, David Milstein, and Michael Lebar from Silk Orde. We'd love to talk to you and hopefully you learn something new about Walmart. Let's uh let's kick things off today, talking a little bit about the Omnichannel on Walmart. You know, this is an ever-evolving space as it continues to grow. Um, yeah, let's dive right in. Awesome.

SPEAKER_01 0:36

Yeah, thanks everybody for tuning in. We're gonna talk on a lot about a lot of different things throughout this this series and throughout a lot of our content. And really, we're gonna be focused on how to leverage, how to grow on Walmart.com. But in these sessions, we'll also touch on how to leverage Walmart.com to really grow in store and how to leverage the omnichannel experience. I think one of the biggest things that Walmart offers is because it's a true omnichannel retailer, there's so many opportunities if you leverage.com to grow your in-store sales and you leverage in-store to grow your dot com business. So we're gonna touch on that. We're gonna touch on strategies, tactics, and yeah, just different um ideas of how we operate and how we help brands grow on Walmart.

SPEAKER_00 1:15

Yeah, I mean, it's it's an ever-evolving space, as we said, and really each one plays into the other. You know, having a strong in-store business can really boost your online your capabilities. And if you're, let's say, starting out a new brand, you're only online, you know, how do you use that to bring it to store? So let's let's let's explore that a little bit more. So, Michael, what do you say are some core principles for an online brand who's just getting started, or maybe they already have some strong, you know, digital penetration and they're just looking to grow and maybe build that store business? What is a key way to go about that?

Selling Models: 1P, DSV, And 3P

SPEAKER_01 1:49

Yeah, so I think we could start with first, just to take it back a little bit, like what are the different ways to sell with Walmart? Right. Yes, right. Probably a good place to start. Yeah, so when you think about Walmart, there's what traditionally people call 3P and 1P, right? So the way it's really broken out is that there's store items, right? All store items are store shared, almost all items are store shared. So meaning if you're buying if you buy it in store, you could also buy it online. And when you buy it online, you have an option for pickup and delivery and sometimes shipping as well, right? So that's a true Omni item. Then you have one P items.com only. So you either there's two types of that. So there's either a one P owned item where Walmart buys the inventory, they bring it to their own fulfillment centers, and then obviously they own the retails and they sell that. Um that's a great way to operate. Walmart's shipping rates are obviously very, very competitive, but also their shipping times are really quick, their FCs are well distributed. Then there's another model, which is 1P dropship, where Walmart still owns the retail, but it's dropship, meaning when you get to order, when the order comes in, it comes to you as a supplier and you ship it from your own warehouses, right? Then, and that's you know, for years, that's all people really operated with Walmart. And now you have 3P. Within 3P, there's two main ways to sell. There's either a WFS, which you send in the inventory to Walmart, it's still your inventory, it's not consignment, or uh it's seller-fulfilled, meaning that you get an order, it's sold and shipped by the seller, and then when the order comes in, you ship it from your warehouse. So those are the different ways to operate within the Walmart ecosystem. And there's different things are good for different different products, different ways to sell are good for different avenues, but also there is the right path for your item might be stores. And it's just about you that when you're launching them on 3P, it's to build up into that. So I think it's a lot about not understanding what's the right channel for you within the channel, but also what's the right path to build up into it.

SPEAKER_00 3:39

100%. Yeah. So let's let's recap on those key areas that you're able to sell. There's 1P and 3P, which are two separate avenues. Within 1P, there's 1P in-store or shared owned, which is your products that are going in-store that should also be available for online pickup and delivery as well as shipping. You have 1P.com, which is exclusively Walmart purchasing inventory through their fulfillment centers for fulfillment. And then you have Dropship, which is, you know, it may be referred to as DSV. Um, very commonly, uh, a lot of older suppliers, you know, or people have been in the Walmart business for a while, maybe legacy DSV sellers or suppliers with Walmart. And now that 3P has come along, you're seeing a lot of more sellers shift more in that direction. So DSV was kind of the 3P version of Walmart prior to uh to the marketplace, right? And you know, this has obviously been going on for a while before, you know, even Jet.com. Like it's it's been around for for a bit their DSV platform. And it is definitely something that also Walmart's moving away from in favor of the 3P model, just to you know, it makes it makes more sense. It's a little bit simpler. There's more levers, there's just more flexibility as a seller or supplier to leverage Walmart's 3P.

Why Brands Use Marketplace

SPEAKER_01 4:48

Awesome. Yeah. So before we dive into a little bit of the strategies for how to how to build up items online to get into store, and then also just how to build up a strong online business. I think one thing to kind of understand is why brands should do or do, or not even to sell it, so to say, it's like why when they do marketplace, like what are some of the reasons suppliers or sellers leverage Walmart marketplace? And I think there's a few different things to keep in mind. So, number one, uh, you know, you have the ability to own your retails, right? So, especially if you see have large businesses and other retailers, like it's really important to be able to own your retails on some items. You don't want to disrupt other channels. If you have an item that's really big on Amazon and you, you know, you sell it to Walmart, they own the retail, and now it could cost them buy box suppression and other things. So that's one reason why. Second reason why is you're a current supplier with Walmart and you want to better round out your assortment, meaning for two reasons. Number one, let's say you sell, you know, a certain um, you know, pack of you know, uh, of socks online um in store, but you wanna you have other similar socks and you want to be able to number one sell them online because you're able to cross-sell and you're able to pick up on more sales, but also you're able to just take more share of the category, and that's a really big point. When a customer is searching for socks, if you have one item that's in store, your share of the digital shelf is limited, right? So brands might not notice you as much, but when you have more items, you'll still have your top items, but those other items that might not be as strong sellers help overall tell the brand story and take up digital real estate, which is what's really important. So that's the second reason why. And really the the next reason why and why a lot of brands leverage marketplaces you really want to get Walmart to buy the inventory or you want to get it in store. Instead of coming to Walmart and giving them a whole pitch of why your item's great, you prove it to them on their own channel. So you're able to Walmart gives you all the tools to be able to launch the item, grow the item, and then bring it to them with a successful story.

SPEAKER_00 6:40

Right. And how many times, you know, have you, let's say, gone to a merchant and you know you start to pitch them your product and be like, wait a second, have you tried 3P? Have you just proven this on Walmart? Right? This is such a simple method that anyone could just get started with. You know, you could just get your product live, get something happening, and it just helps that sales piece. And especially right now, like for Walmart's perspective, why should they even take that risk in the first place without first having a proven model that this product does indeed sell well? Furthermore, one of the cool things about 3P that they're able to leverage is they could see demographically, you know, where your products are selling well, right? If you're leveraging, let's say, WFS and you have two-day fulfillment across the whole US, they say, hey, oh, here I see this region is selling your product really well. It helps them make a little bit more of an informed decision, or even yourself, you can export your own data and use that as a little bit of a push for hey, I think my product would sell well in this in this region. And they could then do the store allocation based on that, which gives you a little bit more leverage that you're coming in with more real, like legitimate data, showing actual sales data instead of Walmart just kind of rolling the dice and you know, hoping they make a good call on your products.

Be A Partner And Beat Cold Start

SPEAKER_01 7:46

Yeah, also to add to that, a lot of Walmart is just being a good partner, right? Walmart's a very partner-centric company, and there's nothing like being a good showing you're a good partner that actually doing the work up front and proving to them that you're willing to invest in what's important to them, invest in their channels, invest in their business. And through leveraging and investing in 3P, you're able to do that, as opposed to you coming with a whole story that you're gonna invest, you're gonna support them, but there they they'll come back to you. There's an open channel that you could be investing with, and you could have you know shown to us that you know you're you're a proactive partner, but you didn't leverage it. So I think it's just from that standpoint, it's also really important. And I think it works like this for every channel and fast growing ecosystem. It's at one point it's nice to do it and you don't get so much value when you do it because it's small. Then it starts transitioning to it's big, there's not a lot of people taking advantage of it. So you take a lot, it's easy to get growth and you're making strong sales because there's low competition, and then it becomes like, oh, it's getting really competitive and it's hard to make sales. Um, and as the channel grows, it'll just become harder and harder. And the same this in that thought in the same way is really about how things that are nice to do now become a necessity. So, for example, when two years ago or three years ago on Walmart Marketplace, you didn't have to be WFS. But I always told sellers, you know, you could wait it out, you don't need to be WFS, you could still succeed without being WFS, but right now it's an advantage if you're WFS, right? In a year, two years, you're gonna have to do it anyway. So why not, you know, figure out all the logistics that you need to and the integrations that you need to now, and then you'll get the advantage, you'll ride the advantage, and when it's necessary, you're already integrated. So it kind of works like that.

SPEAKER_00 9:27

Yeah, especially Walmart really uses historical data for your listings, you know, performance and its ranking on the platform, right? When you're looking to start off a new product, you have to go through so much more work to just build up that rank over time. Versus if you have an older product that you've been selling for a while, you've been selling well, you've always had good shipping, you've been converting for years, you hold those top positions so much stronger. And this is why you'll see a little bit of a trend when you go online, right? If you look at a lot of top, you know, large general keywords, you'll see these really legacy products that have just been in store forever and just been converting and selling online for years, that they're just sitting there at the top because they have all that historic data behind it, even though if the listing today may not be in the best shape, right? You may have like a very short title, you may see like some very simple things that like, oh hey, I would optimize this, but they're just able to dominate and maintain those top ranks because they've been good for so long. And the same thing, you know, applies to everyone. I mean, and and by the way, you know, you're hearing this today like, uh-oh, I haven't really done anything until this point. That's fine. Walmart is growing extremely quickly, and if you still get in today, you're getting in way ahead of so many other sellers and suppliers. So you still have a long way to go as Walmart continues to evolve into you know, this behemoth of this e-commerce business, and getting in today will still give you and set you up for success in a few years. So, like, don't sit there and be like, oh, I screwed up, I got in too late. Like, you're still so much more ahead of so many others, and it's just really a key thing. I want to go back to an interesting point that you mentioned before. And I think with one of the big things about 3P that a lot of current existing suppliers could leverage is how they can actually solve a big problem that exists, which is Cold Start, right? So many brands, you know, our suppliers are just like, oh, I have a new product that's going live on mod, and like, how am I gonna drive traffic towards this thing is gonna it's gonna kill me? Like, I have to spend so much, I'm already, you know, everybody wants so tight on their margins these days. When you think about the digital, the digital component of it, if you're able to first get a listing set up on the 3P side, it could be the same product, you know, you're going live, you have the product already set up on 3P, and you build up even for a couple of months ahead of time, you start just to prove that product on Walmart's platform, you're able to get it in, you're able to put some ad spend behind it. First purchase that digital real estate in advance of your launch. Then when you go live, you know, you're you're you're live on 1P. Firstly, you're probably gonna be cheaper, so you'll immediately get a strike-through, which will help your conversion rate even further, or it'll drive and boost your listing even more. And it's just gonna be a great way just to kind of get over a little bit of that hurdle of cold start, just to be able to drive and succeed immediate growth without having to like start from zero the first day your product goes live.

Setup Basics: Categories, Keywords, WFS

SPEAKER_01 12:08

Yeah, I think one of the biggest things that you know, we're gonna cover this a lot in future sessions, which is really like how what are tactical and strategic things you could do to show up well and grow. But maybe you could talk through a little bit of like what are some ways to really think through at the basic level of how to set up, make sure you're set up well on Walmart.com and some basic things. And we're not gonna go too much into detail now, but how do we what are some of the core things to make sure that we're set up the right way?

SPEAKER_00 12:36

Yeah, for sure. I mean, core principles are I would say like take a look at what your competitors are doing in terms of a few key areas, you know, stick to you know, the categorization is typically gonna be our most impactful piece. So you want to say, like, hey, what does find your top keyword, look it up on the platform, see, hey, what are the top listings doing right now? What's their product type, what's their category path, and make sure you're aligned with that. And again, just make sure your keywords are in your title. Those are gonna be like the key things that are gonna give you that initial initial success to grow.

SPEAKER_01 13:10

Obviously, Walmart has been so invested into growing their dot-com business, and it's really been from an omni-channel perspective. I think I would say Walmart was the only one, even a few years ago, I used to say it's like Walmart was the only one that could put up a fight to Amazon, and I think they've really succeeded with it. But I think what's more interesting is in that path, not only have they succeeded with challenging Amazon in just being and closer to the largest e-retailer in the world, it's really been about throughout that process, they build like a more unique omni-channel experience, which obviously the marketplace is growing really quickly, online's growing really quickly, but the way they tied in their stores into this whole business, I think, has been the most interesting out of this. Um, so maybe you could just talk a little bit about like what omnichannel means with Walmart and how they've been investing in omnichannel. What are some things they've been doing to really further the omnichannel experience business?

Walmart’s Pivot And Seller Experience

SPEAKER_00 14:03

It's it's so it's so interesting to see, you know, a behemoth company, you know, Fortune 1 company take such a drastic turn in the direct in their general direction, right? You know, obviously Walmart's been, you know, the the largest retailer, the highest revenue company, you know, for probably as long as I've been alive, which is pretty crazy. And now just to see them pivot and really like go from this massive retail in-store business to to the dot-com and exactly that, Amazon has kind of just been the dominant player in the e-comm space. They still are, right? They still are, unless you're watching this in like five, 10 years, they they still are the dominant player in the e-comm space. And who could really come in and challenge them? You know, who could be the lift to their Uber, so to say? And because there's always there's always going to be like a few a few of these different players that are coming in. And just seeing, you know, Walmart, you know, who has who has those capabilities, who are no feed. I say Walmart, Walmart knows how to make sales, you know, they definitely know how to sell to a customer, right? They've been doing this for forever, they've been dominating. And I think what kind of triggered this was it makes sense. I mean, if you take a look at the at it and you see that, hey, Amazon's hot on your coattails, Amazon, you know, is quickly catching up in terms of their revenue, and you're like, wait, how am I going to maintain this and stick to being to being the top dog here? And they realize they had to pivot and shift to this, you know, to this more of an e-commerce platform. And they've definitely tried over the years, you know. You know, they're acting Walmart.com has existed, you know, but their acquisition of JET, like over the past years, you know, and just kind of moving more towards this 3P marketplace. But just even within the past like three years or so, when we first got into this, we saw so many brands were having issues even getting accepted to Walmart.com as sellers, right? And how much has that changed to Walmart, what they called opening the floodgates? You know, it was like August 23, I think it was, where they just kind of said, All right, you know, come, just come to our platform and just come and sell your products. And we really see that has evolved to like and the way Walmart even interacts with their sellers. How how often, you know, do you speak to these Amazon sellers and they're just like, I feel like they're just trying to squeeze me for everything? Their fees keep going off. Oh, my account got shut down. I never heard from anyone. Like, Walmart's trying to be a partner, like like Michael mentioned before. Walmart's trying to be a partner with you, and so many, so many sellers and suppliers can you know can echo this and and just say, like, yeah, Walmart actually came to me. They're they've they helped me with their onboarding, you know. I was able to get to get everything set up through them. They really walked me through things. And just being again that that partner to your business to understand, hey, here's the challenges you're facing, here's how we're gonna try and improve our improve our product. And even on like the back end side of things, you know, I've been, you know, I've been working through item 360, now supplier one, seller center, and you can just see an evolution in how antiquated their systems used to be to what it is today. Are they still flaws 100%? Is it something that we see changes every single day? Even even a larger 100%, you know, that just continues to evolve and adapt. And what I really love to see, it's been very interesting. You know, I've been I've been selling people on Walmart for for a bit, talking to all these sellers for so many years, just oh Walmart this, Walmart that, you know, everyone's always complaining, and definitely it's been an easier pitch over the past few years as they see Walmart themselves as lean did more. But there's there's all these is all these complaints, and just seeing that Walmart's taking this and moving even past Amazon in some ways, and I think one key area that you see this, which is a longer conversation, is their partnership with OpenAI, you know, a direction that just shows Walmart's you know, investment in the future of you know of how of how e-commerce will succeed. You know, obviously, you know, going just through classic or standard search engines is something that's going to be potentially a thing of the past, you know, as we as we evolve more towards AI and Walmart going and investing immediately in that, making that partnership, you know, with OpenAI as you know what we want our products to show up over here. We want to be able to drive sales through uh through a medium that is just seeing the data so far here in end of 2025. ChatGPT is responsible for about 40% of all referral traffic to Walmart.com, which comes out and referral traffic is about 4%, I believe, of all Walmart.com sales. So that means that Chat GPT alone is responsible for about like one and a half percent of all Walmart.com sales. And again, this partnership happened like three, four months ago, max. That's that's crazy already. I mean, how is that only gonna evolve? Because it's not just Walmart, it's also Chat GPT, is just the adoption just continues to grow every single day. You know, it's something that you know, ever it's something that just I mean, for you listening now, like how many of you are you know headed to that direction, you have a problem, you just go chat GPT, you want to purchase something, go chat GPT, and the adoption of that and just taking that in, it just gives Walmart such a massive, you know, like it just shows their future mindset over maybe what you're seeing today in Amazon. Obviously, I'm sure Amazon has their own AI initiatives, but just a very common classic household, you know, the the household AI name integrating with Walmart just shows a certain level of investment within the future. And you just love to see that. You know, you love to see that.

AI Bets, OpenAI, And Data Advantage

SPEAKER_01 19:17

I think Walmart also just recently hired like a chief AI officer. Um, you know, ever since you know John Ferner got announced as the new CEO. The main and yeah, global CEO. The main announcement was really about how he's gonna help lead the AI transformation. And Walmart knows that in order to keep staying at the top, they have to keep pivoting. So they made that big e-commerce pivot, and now they're already planning for what the AI pivot is, right? And the thing about AI, there's you know, I don't want to go too down that rabbit hole, but now there's AI tools within Supplier One to help suppliers. There's Sparky within Walmart's shopping app to help people shop. There's so many different aspects of how it's integrated. I think for associates, they have their own AI tool. Just throughout the entire Walmart ecosystem, there's so many. Of these different AI products without throughout Walmart Connect, they want to make it much easier to run advertising, leveraging AI. So I think just seeing how what Walmart's doing with AI, but you know, it's really deja vu to what they've done with just the whole e-commerce space.

Price Leadership And Brand Protection

SPEAKER_00 20:15

Uh, very interestingly, something that Walmart has an advantage even to Amazon. I mean, aside from you know the stores and everything that's very simple to understand. Something that I think is interesting just from a business perspective is they don't have to be a pioneer for a lot of these existing you know products that exist, right? Amazon has really been able to boom and really make e-commerce, you know, the thing it is today. And Walmart is able to look at that and be like, all right, this part, amazing. I love this, but this, I don't know about that. Like there's certain there's certain things that they're able to see and be like, hey, I don't like this, and this is a problem for me, and I don't want that on my marketplace. And I just think like just off the top of my head, a couple things. I'd love to hear your thoughts on this, Michael. Like, firstly, is you know, a price first, a price first approach. You know, Walmart is so so much about selling that EDLP, and especially, you know, in today's day and age, you know, when you know every dollar needs to go as far as it can from a customer perspective. Just being in that marketplace for people to be able to shop and know that you're getting a good deal is so impactful. And I've done this, I I mean, I was, you know, I I've I've I've gotten into this just myself from uh experience I had. I was looking to buy windshield wiper fluid. You know, this is crazy to say publicly, but you know, I went to Amazon to go look for my windshield wiper fluid, and I'm like looking at the listing. You can do this right now. Go ahead, open your phone or your browser, whatever it is, type in windshield wiper fluid. The top listings on Amazon are gonna be about$20, right? You're gonna see that$20,$15. If you scroll, maybe you'll get lucky, you'll find something for like nine bucks. On the first page, I don't know, I'm on my phone, so there's not that many listings. You go to Walmart, the number one listing is$4.97. Right? Why is that the case? You know, why is that that if I'm looking for something, I'm not immediately seeing the best deal for my product, best deal as a consumer, that this is gonna be the product that I'm gonna want to purchase, right? That's just such a key way that Walmart shows you that they are, you know, that's that's just something that they love. You know, that's something that they love, is just showing that. That's just one piece that I really like about it. It's also Walmart's understanding of, you know, let's say the third-party sellers and and the piece and the piece in that space, how they're able to really help work with some of these suppliers who have how many, you know, how many of you sellers or suppliers have just like been struggling with with hijackers on your listing? Somebody coming in and just you know, completely taking over your listing, maybe it well, but maybe it's counterfeit products, all these different pieces, and Walmart just clearly showing just this year alone, they they they got rid of over a hundred million in GMV from sellers who are selling you know counterfeit, counterfeit products are not necessarily authorized resellers and consumables. And it just shows, again, common issues that sellers and suppliers face on Amazon and Walmart's take on it. Now, obviously, there's still issues today, there's no doubt, but it just again, it's about the direction and the way that they're willing again to be partners with you and really make a platform that you have real brands coming to with their products, just helping them really grow and have a true platform to sell to customers in a way that they can reach them with their good products.

SPEAKER_01 23:23

Awesome. Thanks everybody for tuning in. It's fun to do this first episode of this show. I think throughout this, and hopefully you tune into other episodes, we're gonna really, as this show progresses, we're gonna really dive into obviously keep giving you informed on ways to think about things and letting you know about new strategies that are coming and just new initiatives that are coming to platform. But we're really gonna start diving into strategy and tactics that you could hopefully take away and utilize for your business to help you grow on Walmart.

SPEAKER_00 23:51

We're excited to keep them coming.

SPEAKER_01 23:52

Awesome. Thank you, everybody.