Walmart's Marketplace Grew Near 50% — and Brands Are Racing to Keep Up

By Marcus Bennett

Walmart's third-party marketplace grew close to 50% year over year in the quarter ending April 30 — its fastest growth rate in years, according to Marketplace Pulse. That figure is the backdrop for this holiday season's big question: can brands actually juggle all the new marketplaces without wrecking their margins?

Amazon still dominates third-party selling, but the field is crowded. Target is recruiting brands to Target Plus and wants to turn it into a $5 billion business by 2030. Best Buy, Sephora and Ulta all launched on TikTok Shop this year, learning the ropes alongside the brands courting them.

Brands and agencies say Q4 success on marketplaces comes down to inventory management — you can't run out of stock during Black Friday — plus understanding each channel's promotional mechanics and what they do to margins.

What does diversification actually look like?

"Part of it is working with each channel, seeing what the opportunities are, and then kind of figuring out a plan," said Monil Kothari, founder of jewelry brand Haus of Brilliance. Until roughly 2021, the brand leaned heavily on Amazon. Amazon now accounts for about 15-20% of its business; it also sells through Target and Costco, among others.

The catch is that marketplaces multiply operational complexity fast. "There's just a sheer amount of logistics" in launching on a new channel, said Elizabeth Marsten, vp of innovation and growth for commerce media at Tinuiti. Returns, she argued, are the hidden tax: "The business of returns is this massive cost that we don't talk enough about." Each marketplace also carries its own shipping-level agreement, dictating how fast a brand must deliver.

Here's the pinch: except for Walmart and Amazon, most marketplaces offer no fulfillment services of their own. A five- or six-day shipping agreement is fine if you run your own warehouse. If you have only one and need East Coast distribution, you're hunting for extra 3PLs — and "that's when the economics of a marketplace can start to get challenging," Marsten said.

How do brands keep shelves stocked?

Kothari said Haus of Brilliance was built multi-channel from its 2019 launch, when it sold on Amazon and dropshipped through Overstock. "Having a really good operational foundation goes such a long way, especially when you have two-day ship times and incredible volume," he said. The math is unforgiving: "We might have 10 units of a piece on Black Friday — nine might sell, and if your inventory doesn't update and reflect that it's now one, it shows another 10 units available."

He joked that much of the operation runs on "duct tape": an off-the-shelf core ERP with extendability, third parties for EDI channels, and in-house-built API connections to manage inventory and order fulfillment.

CJ Bilangino, CEO of home goods brand Gorilla Commerce, calls inventory a "Goldilocks situation." Too much product in Amazon or Walmart fulfillment means excess storage fees; too little means stockouts at key moments. His answer is a network of 3PLs staging inventory near Walmart and Amazon warehouses — "if all of a sudden we see things are trending a lot faster during the holidays, we can quickly go and get that inventory to a distribution center."

Gorilla Commerce, known for its Gorilla Grip slip-resistant bath mat, launched on Amazon in 2014, added Walmart's marketplace two years ago, and in July placed its bath mats in more than 2,600 Walmart stores.

Do all brands need deep Black Friday discounts?

No — and the source makes that clear. Gorilla Grip, selling everyday items like door mats, dog bowls, cheese graters and can openers, sees consistent month-to-month sales and offers only select products at a "light discount." "It's very rare that you would see a very deep discount, like 30% or more," Bilangino said, though the brand does catch a "halo effect" from Black Friday traffic.

Haus of Brilliance is the opposite case: about 50% of its business lands between November and December. Each marketplace plays by its own rules, Kothari said. Only its top 20 items can be picked for Amazon's Lightning Deals, which leaves the rest of the catalog underexposed. Nordstrom, by contrast, asks brands to opt in at a minimum discount for Black Friday-Cyber Monday coverage. And Target caps the game: "Target doesn't want anything over $500," so that channel focuses his lower price-point items.

Kothari's bottom line is partnership: "I want our partners to be able to showcase everything that we can possibly sell during the holiday period, because Christmas only comes once."

The takeaway in plain words: marketplace growth is real, but every new channel adds returns, fulfillment and inventory costs the headline growth rates don't mention.