Can Walmart steal customers from Amazon Business Prime?

walmart (WMT 0.56%) My eyes are still glued to the heartbeat Amazon (AMZN 1.96%) in e-commerce by launching a new initiative aimed at small and medium-sized businesses (SMBs)

Called Walmart Business+, the service aims to simplify shopping for businesses through a curated list of 100,000 items including office supplies, furniture, food and beverage, cosmetics, electronics, classroom and facilities needs. .

It’s just another in a series of initiatives that have begun to set Walmart apart from rivals that have served small businesses for years. The consumer side of online shopping is largely unconquered, but consumer spending is constrained by inflation, rising energy costs and rising interest rates.

SMBs offer new avenues of potential growth If Walmart can lure new businesses in and steal other businesses from Amazon.

Image Source: Getty Images.

Walmart means business

Walmart Business+ is designed to challenge Amazon Business Prime. For $98 a year, customers can upgrade to a new membership program that includes free shipping with no minimum fees, free pickup from stores with a minimum purchase of $35, 2% rewards on orders over $250, and in some cases up to Get 5% savings. Business sets up subscription plans. SMB can add up to 5 users to one account.

Amazon launched the Business Prime membership program five years ago. It offers access to millions of products on the site, but costs start at $69 a year and go up to $10,000 for companies with over 100 users.

This isn’t Walmart’s first effort. Over the last few years, we have taken many steps to target the SMB market. Also this:

• Launch GoLocal in partnership with SalesforceSalesforce retail customers now have access to Walmart’s extensive transportation network for in-store pickup and delivery.
• partnership with Adobe We provide retailers and brands with access to the Walmart Marketplace. Walmart Marketplace offers its customers his 2-day shipping, in-store fulfillment, and pickup capabilities.
• Earlier this month, we announced an expanded partnership with Salesforce to bring the Store Assist app, a store fulfillment technology and local delivery services app for retailers on the Salesforce Commerce Cloud and order management platform.

Still, it is the part of the market that is becoming increasingly crowded. ShopifyFor example, we are also aiming to expand our presence in the SMB space. The Shopify Fulfillment Network allows customers to offer her two-day and next-day delivery, as well as expand storage, freight, inventory handling, and return options. It also added POS functionality, payment options, small business loans, and multi-channel opportunities for businesses to sell on social media.

costco wholesale Staples, like Walmart’s own Sam’s Club, is aggressively pursuing the SMB market.in an interview with bloombergsenior vice president Ashley Hubka said the market is big enough that the new program won’t hurt sales. there is

Image Source: Getty Images.

growing market

According to the US Small Business Administration, there are 33.2 million small businesses in the United States, employing 46.4% of all workers in the country. Sage, an accounting and services firm for SMBs, and The Center for Economics and Business Research forecast that the number of small businesses operating in the United States will grow by 36,000 by 2025.

This is a potentially rich target environment that will be needed as consumer shopping habits change. Walmart posted strong sales in the third quarter, but much of it was based on groceries as apparel and electronics sales slowed.

Amazon’s own third-quarter earnings report has been lackluster, with online sales slowing over the past year and part of the slowest growth rate the e-commerce giant has seen in two decades. I’m here.

don’t check out yet

The SMB market may offer an opportunity to offset the recent slowdown in growth. The space has plenty of room for multiple players, brightening up the long-term opportunity for Walmart.

However, now may not be the time to buy. This retailer trades at 44x revenue, 10x sales, and hundreds of times free cash flow. Walmart is a good stock in the long run, but waiting for a better price may be the real deal for investors.