Three ways managed supply chains are changing online marketplace sales

More retailers are offering their online third-party sellers hosted end-to-end supply chain services, and it’s having an impact.

Amazon has fully launched Supply Chain by Amazon, an end-to-end automated set of supply chain services that provides third-party sellers on its marketplace with a complete solution to move products directly from their manufacturers to customers around the world.

Meanwhile, Walmart has been offering Walmart Fulfillment Services (WFS), a fee-based program providing services including storing, picking, packing and shipping, returns and customer service, for several years and recently opened its Cross Border open shipping solution to Chinese retailers.

Amazon and Walmart are setting a managed supply chain services trend in the burgeoning third-party online marketplace space, and where those two giants go the industry tends to follow. Here are three ways the emergence of fully managed supply chains are affecting third-party marketplaces.

Creators, influencers and celebrities join the party

The emergence of social media as a mainstream consumer engagement platform has resulted in a rapidly growing number of creators (people who develop content and/or DIY products) and influencers (people who promote products to their social media followers) entering retail.

[READ MORE: Survey: Social media commerce, influencer marketing here to stay]

According to a 2024 survey from creator management platform Grin, 74% of American consumers have purchased a product or service because an influencer recommended it. Creators and influencers are especially popular with valuable younger consumers, with 66% of Gen Z shoppers watching reviews on social media before making a purchase.  

However, creators and influencers typically lack any type of fulfillment infrastructure to get goods to potential paying customers. Full-scale managed fulfillment is an effective way for this type of seller to scale their retail operation for mass consumption.

It is also worth noting that celebrities are increasingly launching product lines and even selling off personal items (such as Elton John’s recent charity resale event hosted in partnership with eBay). 

These efforts are almost always run with a retail partner, but managed supply chain services open possibilities for direct-to-consumer efforts where a celebrity could use their own website or social media accounts to promote merchandise.

More foreign sellers

Efforts such as the Walmart Cross Border ocean shipping solution and Amazon’s planned discount storefront for direct purchase and shipment of Chinese goods to U.S. buyers are poised to bring even more foreign sellers into a market already seeing a rapid increase in the purchase of foreign-sourced goods from Chinese shopping apps such as Shein and Temu.

And it isn't just sellers from China entering the U.S. market. Walmart began inviting select Indian sellers to apply to join Walmart Marketplace in January 2022, started reaching out to select U.K sellers to apply to join Walmart Marketplace in June 2022.

And in August 2022, leveraging the Canada-United States-Mexico free trade agreement (CUSMA), Walmart opened its U.S. supply chain services and infrastructure to offer participating Canadian sellers delivery across the contiguous U.S. in as fast as one to two days.

Walmart is also planning to open up its marketplace in Chile to eligible cross-border sellers. Where Walmart and Amazon go, other retailers follow, and look for other retailers to help facilitate the participation of foreign sellers in the U.S. market with hosted supply chain services.

The haves have more

In addition to Amazon and Walmart, retailers including Target and Shein offer some type of hosted supply chain infrastructure in the U.S. for third-party sellers.

By offering these types of services, marketplace hosts create extra revenue streams as well as make their platforms more appealing to small sellers who may rather pay a fee than go through the hassle and expense of creating their own supply chain network.

Since the only retailers that can realistically offer a hosted end-to-end marketplace supply chain service are large retailers, it becomes another way for already dominant players to gain even more market share at the expense of smaller rivals. The "haves," as is so often the case, are finding ways to have more by providing more.