Walmart Joins Amazon in the Supply Chain Takeover Game

Just when you thought it was safe to go back in the water, the big boys of retail are circling the logistics marketplace again. This time, it’s not just Amazon offering to handle all your logistics – Walmart has jumped into the fray, ready to “help” third-party sellers with their supply chain needs.

On the surface, it sounds great. As Manish Joneja, Walmart’s senior vice president of U.S. marketplace and Walmart Fulfillment Services, told The Wall Street Journal: “If I’m a seller, I want to focus on my product. I want to focus on my customer. I need help with logistics, supply chain, different elements.”

Who wouldn’t want to offload the complexities of logistics to a retail giant with decades of experience? It’s tempting, I know. But I’m here to warn you: Beware of giants bearing gifts.

The Hidden Dangers of Outsourcing Your Entire Supply Chain

Last fall, I cautioned against letting Amazon handle your retail store fulfillment. The reasons were clear: It’s not cost-effective, and you lose control of your inventory and supply chain. But there’s an even bigger danger lurking beneath the surface – one that threatens the very core of your business.

I’m talking about your intellectual property.

Now, when most people think of types of intellectual property (IP), they imagine patents, trademarks and copyrights. But in the world of retail and eCommerce, your IP goes far beyond that. It includes:

• Where you source your products.
• How much you pay for them.
• Your delivery methods and timelines.
• Your entire supply chain structure.

In other words, the very trade secrets that give you a competitive advantage in the market.

Handing Over the Keys to Your Boat

When you let Walmart or Amazon handle your entire logistics marketplace operation, you’re not just outsourcing a service – you’re handing over the keys to your boat. They’ll know everything about your business, from your suppliers in Asia to your delivery times in Albuquerque.

And here’s the kicker: There’s nothing stopping them from using that information to compete directly with you. They have the resources, the connections, and now, thanks to you, the inside knowledge of your business model.

Think about it. If Walmart knows you’re getting great deals from a manufacturer in Vietnam, what’s to stop them from approaching that same manufacturer with an even better offer? If Amazon sees that your fast delivery times are winning you customers in a particular region, what’s to prevent them from replicating your strategy?

The Dangers of a Single-Source Supply Chain

In today’s world of perpetual disruption, relying on a single source for your entire supply chain is like putting all your eggs in one very large, very powerful basket. Convenient yes, but it’s also a recipe for disaster.

Remember, true supply chain resilience requires optionality. Your logistics marketplace needs multiple sources, diverse transportation options and the ability to pivot quickly when disruptions occur.

Securing Your Future: The Importance of 3PLs

So, what’s the alternative? This is where third-party logistics providers (3PLs) come into play. Unlike retail giants who might view your business as a potential acquisition target, 3PLs are focused solely on providing logistics services.

By partnering with the right 3PL, you can maintain control over your supply chain while still benefiting from expert logistics management. And here’s a crucial point: warehouse space.

The Wall Street Journal reports that Walmart has been building out space over the last few years and has plenty available. But do you really want to be at the mercy of a potential competitor for your storage needs? Working with a 3PL allows you to secure warehouse space on your own terms, maintaining your independence and flexibility.

The Strategic Approach Requires Using Giants Wisely

Now, I’m not saying you should avoid Amazon and Walmart entirely. Their logistics networks are powerful tools that can benefit your business – when used strategically.

The key is to use these services selectively. Perhaps you use Fulfillment by Amazon for smaller items while relying on a 3PL for larger products. Maybe you leverage Walmart’s port-to-store services for certain product lines while maintaining control over others.

The goal is to create a diverse, resilient supply chain that isn’t overly dependent on any single provider – especially not one that could become your biggest competitor.

Protecting Your Business Secures Your Future

In the end, it all comes down to this: Your logistics marketplace is unique. Your products, your customers, your supply chain – they’re all part of what makes you successful. Don’t hand that uniqueness over to a retail giant on a silver platter.

Instead, take a strategic approach. Understand your supply chain needs, secure your warehouse space and create a logistics strategy that protects your intellectual property while still leveraging the best tools available.

Not sure where to start? That’s where I come in. Let’s connect and figure out where your supply chain stands, what services you truly need and how to secure the warehouse space that will keep your business growing independently.

Don’t let the big boys take over your logistics. Take control of your supply chain, protect your IP and secure your future in the market. Your business deserves nothing less.

Related Reading

• Supply Chain Resilience Requires Amazon + 3PLs
• Amazon Store Fulfillment: Why Ring No. 2 Will Kill You
• Walmart’s Fantastic Supply Chain Sourcing Concept