Walmart has long dominated the retail world, but it also offers Walmart Marketplace, which allows third-party sellers to offer their products, similar to the e-commerce powerhouse Amazon. Walmart Marketplace sellers may also have the opportunity to access working capital solutions through Walmart Market Place Capital.
This funding solution helps eligible businesses obtain essential financing for business needs such as purchasing inventory, covering daily operating costs, and more. However, the Walmart Marketplace Capital cash advance solution is invite-only and might not be the best fit for every seller.
This review explores what you should know about Walmart Marketplace Capital, including the benefits, drawbacks, and application process to help you make an informed decision. Specifically, we’ll answer these questions and more:
Walmart Marketplace Capital is a program designed to help sellers using Walmart Marketplace. It offers working capital solutions for eligible sellers and aims to support their business growth and improve their sales performance.
Walmart Marketplace allows third-party sellers to list their products alongside Walmart’s offerings. Sellers can reach millions of customers through this platform. They manage their own inventory and set prices for their products. The marketplace operates on a commission-based model, where Walmart takes a percentage of each sale.
Walmart Marketplace Capital specifically targets these sellers and provides them with quick access to funds. This funding helps sellers restock inventory or invest in marketing. Walmart uses sales history to determine eligibility and then notifies sellers via the seller dashboard, meaning applications are invite-only. This program helps Walmart Marketplace Sellers grow their businesses by ensuring they have the resources to succeed.
Walmart Marketplace Capital offers merchant cash advances to sellers. This program is invite-only, and only selected sellers can apply.
The funding platform offers three primary options.
Capital by Walmart helps sellers grow their businesses by providing quick access to funds. Sellers can use these funds for inventory, marketing, or other business needs. The enrollment process is simple for those who receive an invitation.
The product charges a flat fee, providing a simplified repayment structure. Most sellers repay the cash advance with a direct debit from their online sales on the Walmart Seller Center.
Walmart Fulfillment Services (WFS) is a service offered by Walmart that helps sellers store, pack, and ship their products to customers. WFS works by integrating with Walmart’s online marketplace, allowing sellers to outsource the logistics of order fulfillment to Walmart’s network of warehouses and shipping partners.
The Walmart Fulfillment Center helps sellers complete their orders. Sellers using WFS can also access capital, allowing them to sell now and pay later with financing tailored to their inventory needs and stocking strategy.
Parafin is a third-party funder that partners with Walmart to offer additional financing options. This partnership allows sellers to access funds quickly. Parafin focuses on fast approvals and flexible terms. Through this collaboration, sellers can find the right solution for their business needs.
Walmart Marketplace Capital also allows sellers to apply for third-party financing. This option gives sellers more choices when seeking funds. They can explore various lenders and select the best fit for their business.
Sellers must meet specific eligibility criteria to qualify for Walmart Marketplace Capital. First, Walmart Marketplace sellers have an active account for at least six months. Eligibility is also based on sales volume and transaction history.
Furthermore, the Walmart Marketplace Capital website states the following criteria:
The platform is invite-only, but some sellers can request to apply if they meet certain requirements. Otherwise, Walmart notifies sellers of eligibility via the Seller Center and email.
Once notified, sellers can enroll to receive funding. The amount each business qualifies for depends on sales history.
The funding products are merchant cash advances (MCAs). A merchant cash advance isn’t a loan in the traditional sense. Instead, it’s a business-to-business transaction in which the funder purchases future receivables at a discount in exchange for the cash advance.
This funding option provides quick and easy access to capital, but it can be expensive. Instead of charging an interest rate, MCAs use a factor rate, which Walmart Marketplace Capital calls a Capital Fee.
Factor rates are a simple flat fee charged at the time of funding and become part of the repayment total. This makes calculating repayment simple, but there is no way to reduce interest through early repayment or paying more towards the principal.
For example, let’s say you receive a $10,000 advance with a factor rate of 1.2. To calculate the total repayment amount, you would multiply the advance amount by the factor rate.
$10,000 (advance amount) x 1.2 (factor rate) = $12,000
Therefore, the total repayment amount for a $10,000 advance with a 1.2 factor rate would be $12,000. This means you would need to repay $12,000 over the course of the advance, typically through a percentage of your daily sales.
While the cost can run high, this product does not have other financing charges, such as interest or late fees. Using Walmart Marketplace requires a commission but doesn’t have monthly fees or setup costs.
Walmart Marketplace Capital does not offer a business loan affiliate program, so ISOs and business loan brokers cannot offer its products. However, many small business loan companies can provide merchant cash advances and other business funding products.
Sellers cannot apply directly. Here are the steps to follow for eligible businesses.
The process begins when a seller receives a notification of eligibility from Walmart. This message informs sellers that they qualify for the Walmart Marketplace Capital program and invites them to enroll.
Once a business is eligible, it can enroll in the funding platform. This may involve a final review from Walmart and a funding offer. Carefully review the offer and cost before moving forward.
Once approved, Walmart transfers the funds quickly to the account you use for Walmart Marketplace payouts.
Funds can be used for multiple purposes. Many sellers invest in inventory to meet demand. Others might choose to improve their online presence or expand their product range.
Repayments for Capital by Walmart and Capital for Walmart Fulfillment Services (WFS) are automatically deducted from the payouts during each settlement cycle. In the event of insufficient funds in the settlement account, the company may initiate debits from the seller’s bank account, processors, or other platforms where future receivables are expected.
This process ensures that repayment obligations are met promptly and efficiently, maintaining a smooth flow of capital for the seller’s business operations. Capital by Parafin has repayment terms of nine months.
Walmart Marketplace Capital offers many benefits for businesses. First, it provides quick access to funds. This allows sellers to invest in inventory or marketing without long waits, which many small businesses find helpful for growth.
The program has flexible repayment options. Sellers can choose a plan that fits their cash flow. This flexibility helps them manage their finances better. It reduces stress when business is slow.
Third, Walmart’s vast customer base is a significant advantage. Sellers gain exposure to millions of shoppers, which increases their chances of sales and brand recognition. The platform also supports various product types, from electronics to clothing.
Another benefit is the user-friendly interface. Sellers can easily navigate the platform to list products and track performance. Walmart also provides tools for managing cash advances and repayment.
Walmart Marketplace Capital has some drawbacks. One of the most significant disadvantages is that the funding platform is only available by invitation. Sellers cannot apply for funding directly.
Another significant drawback is that merchant cash advances tend to be expensive. Walmart Marketplace Capital doesn’t publish factor rates, but instead, it states that it is competitive. Even so, MCAs are one of the most expensive funding options available.
The website doesn’t publish information on factor rate costs or funding amounts. This lack of transparency makes it difficult to compare options before receiving an invitation to apply.
Pros:
Cons:
Yes, Walmart Marketplace Capital is a legitimate alternative business funding platform backed by the largest retailer in the world.
It’s difficult to find reviews specifically for Walmart Marketplace Capital, as most online reviews only discuss the marketplace. However, it has generally positive reviews from the limited information available.
Positive reviews typically focus on funding speed and the ease of enrollment after receiving the eligibility notice. Sellers also appreciate the platform’s easy-to-use interface and working with such a well-known brand.
Negative reviews often discuss the lack of eligibility and the inability to apply directly. Some also complained about high costs.
Most sellers who receive an invite to apply will be eligible for funding once they enroll, but there’s a chance that Walmart may decline enrollment at this point. You can contact Walmart Marketplace Capital directly for more information if you were declined or never received an invite.
Fortunately, if Walmart Marketplace Capital doesn’t work for you, many lenders are available. Many alternative funding options provide merchant cash advances (MCAs), a highly accessible solution for fast funding.
In addition, working with a dedicated business funding company can provide access to other financing products. You may be interested in one of the following small business loans:
Walmart Marketplace Capital offers a viable funding option for eligible sellers who need quick access to short-term funding. The ease of enrollment and fast funding times can help sellers quickly build their customer base and scale their operations.
However, sellers who don’t receive an invite or businesses that need additional financing help must look elsewhere. Additionally, eligible sellers still face potentially high costs due to merchant cash advance factor rates. They could possibly find more advantageous funding options from a dedicated lender or small business loan marketplace.
Based on the available information, we rate Walmart Capital Marketplace 2.5 out of 5. Its ease of enrollment and quick funding make it attractive. However, the limited transparency, invite-only application, and potential for high rates indicate that small business owners might be better off exploring other financing options.
Disclaimer: The Walmart Capital logo trademark is owned by Wal-Mart Stores, Inc., and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from Wal-Mart Stores, Inc.
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