On February 24, 2020, Walmart launched fulfillment services for third-party vendors on its marketplace, offering similar services as Amazon. WFS Offers Fulfillment Services for Third-Party Vendors Similar to the ecosystem of Amazon’s third-party vendor services, WFS handles all customer support and returns for vendors’ orders. When a customer places an order on Walmart.com, WFS picks, packs and ships to the customer on the third-party seller’s behalf. The program enables sellers to spend more time on increasing sales and less worrying about delivery and customer support. Walmart shipped its first WFS test order in August 2019. [caption id="attachment_104621" align="aligncenter" width="700"] Source: Walmart [/caption]   Walmart Expects To Improve Customer Value Index (CVI) by Growing Its Marketplace The consumer value index (CVI) is an indicator Walmart uses internally to measure e-commerce performance. The CVI index includes five metrics:

1. Having what the customer wants.
2. Having it easy for customers to find it.
3. Displaying all the information about the product customers want.
4. Pricing it right.
5. Delivering it the way the customer prefers.

In Walmart’s 4Q20 earnings call, management pointed out that the company needs to scale its marketplace business to drive e-commerce profitability, and that includes a well-run marketplace supported by fulfillment services. The company wants to improve CVI and believes to do so it must build a competitive business model. WFS is a critical part of Walmart’s strategy and the priority is to focus on third-party brands to ensure a wide product assortment. WFS vs. Fulfillment by Amazon (FBA) Compared to FBA, Walmart’s WFS is the new kid on the block—and one with a much more limited service zone. But Walmart does offer perks for vendors. [caption id="attachment_104645" align="aligncenter" width="700"] Source: Company reports [/caption]