Walmart is partnering with StockX, an online marketplace for buying and selling sneakers, streetwear, and collectibles, to offer shoppers access to pre-verified sneakers from Nike, New Balance, Asics, and other brands. The partnership marks the first time StockX has integrated its inventory with an outside marketplace.
“Hundreds of items” will become available on Walmart's website this week, and Walmart says that the partnership could expand to tens of thousands of products in the near future.
Here's how StockX works:
- Sellers list their items for sale — either asking for the highest bid or setting an ask price.
- Once purchased, sellers are expected to ship the item within 2 days.
- The seller actually ships the item to StockX, not to the buyer directly.
- StockX verifies the item before releasing the funds and then ships it to the seller.
The pros of this system are that buyers are receiving verified items which reduces scams, chargebacks, and unhappy customers, ultimately creating a more trustworthy marketplace.
The cons is that it takes longer for the buyer to receive the item (since it's going to StockX first), and ultimately the buyer is paying for shipping twice. Sure, technically, the seller is paying for shipping — but the cost of items on the platform absorb the cost of that double shipping verification process.
Last year StockX started offering a pre-verification service so that it can ship sold items faster, and Walmart will exclusively be selling StockX's inventory of pre-verified items so that customers don't have to wait for a long turnaround to receive their purchases.
So let's get something straight — StockX is itself a marketplace, and it'll now be listing items for sale on a bigger marketplace. Is this the future of online retail?
If so, it feels like a win-win for both Walmart and niche marketplaces — until it's not. Walmart gets to bring in-demand collectible items to their marketplace, providing more reasons for customers to shop online with them (and not with Amazon, LOL). StockX in turn gets to reach Walmart's much larger pool of customers. Win-win?
The win-lose part might come in the future. There are obvious risks with selling on Walmart that include:
- Diluting your market share. Customers who previously would've had to shop directly with StockX for coveted sneakers will now associate Walmart as the destination to find what they're looking for.
- Giving Walmart your customers. Can Walmart retarget those buyers with sneaker recommendations (from other sellers), potentially taking future sales away from StockX? It's not like StockX is going to have the exclusive on selling collectible sneakers on Walmart.
- Weakening your brand. On an earnings call earlier this year, Etsy CEO Josh Silverman said, “When you’re buying a gift for someone, you don’t want to say, ‘Where’d you buy it? Oh, I bought it on Temu’ or ‘I bought it on Walmart.' All due respect to those brands, it’s probably not how you want to present yourself.” Although I found his comment extremely out of touch with the common man, I can't deny that Walmart has a self-created reputation of being the ultimate discount store. Is that a good look for sneaker resellers? The sneaker resale world has historically been a race to the top, not a race to the bottom in regards to price.
For Walmart, partnering with StockX (and most likely other niche marketplaces in the near future) is a brilliant move. Kudos to Walmart.
For StockX and others that follow suit, I'm curious if the decision will prove to be shortsighted. (Think Toys ‘R' Us and Amazon.)
What are your thoughts? Win-win? Or eventual win-lose? Hit reply and let me know or join the convo on my LinkedIn post.