Amazon, Walmart Going Head To Head In What Could Be A Huge Third-Party Win

Wal-Mart Stores Inc WMT is certainly not waving the white flag of surrender. To the contrary, it is starting to steer third-party sellers away from Amazon.com, Inc. AMZN's merchant platform.

“For merchants, Walmart today is what Amazon was a decade ago: a vast frontier with room to grow," according to PaymentsSource. "Amazon, by contrast, is so crowded with products and sellers it has become difficult to stand out, forcing merchants to sacrifice some of their profits on advertising.”

Walmart has focused in on steering sellers away from Amazon, and it is doing a great job. As Walmart continues to see its online business grow, the company is now able to woo over third-party merchants and is starting to look like a legitimate threat to Amazon.

Amazon’s Notable Reaction

Amazon CEO Jeff Bezos is worried enough to have Amazon invite 1,500 of its merchants to an exclusive invite-only event on June 28. These third-party sellers will be able to meet with Amazon executives and attend seminars to help them learn how to succeed in a tough marketplace. It is ultimately a "sales pitch" by Amazon to prevent its merchants from using Walmart's similar services.

“They need to get sellers to subscribe to the Amazon religion. Amazon has gotten so large and so anonymous for sellers — this event helps make [it] more personal. It’s trying to show sellers it cares about them,” Chad Rubin, co-founder of e-commerce management at Skubana told Bloomberg.

Amazon clearly realizes how important it is for the company to maintain its merchants, as third-party sellers account for approximately 50 percent of products sold on Amazon.

Will Amazon’s Exclusive Event Payoff?

While many have speculated that Walmart's presence will not drive away the majority of Amazon's merchants, this reaction makes two clear statements:

1. It reaffirms Walmart's expanding presence and that the retailer is a legitimate player.
2. Amazon is going to need to start paying more attention to its merchants and might start offering them more incentives to exclusively use Amazon's merchant platform.

A Win For Third-Party Merchants?

In the future, merchants should expect to see two major players compete for their products. This could lead to lower fees, more benefits and a huge win for third-party sellers.

All of this news comes in the light of Walmart starting a war of words with Amazon as transportation consultant Satish Jindel told the New York Post:

“Walmart would prefer to do business with carriers that are not doing business with Amazon” and are not “conflicted,” because it's concerned about their ability to handle high volumes of deliveries during peak times, Jindel says.

Overall, it is clear Walmart is making third-party sellers and even transportation companies choose: Walmart or Amazon?

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