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11 Amazing Facebook Marketing Case Studies

Even though Facebook still seems to be first on the mind of many people thinking about social media marketing – Facebook is not easy to master. But there are multiple Facebook marketing case studies out there that prove that success can still be found with Facebook. Sure, you can buy visibility fairly cheap, you can shout your offers at a (hopefully) targeted audience. But to get your share of Facebook’s marketing and branding superpowers you have to understand how the social network Facebook works. You need to figure out what your target audience likes – and you have to find the trigger to make them engage with your updates.

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If you are not going to spend thousands of dollars on advertising that gets even harder – and the more important, it is to understand how it all works.

A wider reach for a post on a Facebook fanpage may become harder to get, but there are still some formats and types of updates on Facebook that can reach far.

While many Facebook users complain that their reach dropped, most of them do not (yet) utilize the fairly new features that Facebook offers that will not only help to increase engagement but also help to uphold or even grow the reach. And I am not talking all about advertising.

No matter what you do on Facebook, a key goal for your marketing updates should be engagement. And that is for more than one reason:

  • Engagement is an important factor that decides how well your posts is received by the Facebook algorithm.
  • Engagement also helps to build a relationship and convert more leads and customers.

Brands who are looking for Facebook marketing success need to be aware of what works and what their audience may like. There are some types of posts that on average fare far better than others – and successful brands consider this.

Video by far outperforms all other types of Facebook post formats. In fact, videos get 59% more engagement than any other types of post. Video even performs better than photos.

But there is another type of post or rather a place to post that can outperform what you have been doing on Facebook in the past: Facebook groups.

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Marketers view private community groups as one of the major trends in social marketing. That should be reason enough for you to take a closer look at Facebook groups if you have not done so in the past. We added some Facebook marketing case studies to this list that feature Facebook groups as the main focus.

But you don’t have to take my word for the possibilities you have with your Facebook marketing. There are more than enough examples of brands that are hitting it big-time on Facebook.

Please keep in mind that the benefits of using Facebook in your marketing strategy are not all about website traffic. A Facebook marketing strategy can also be about engaging with your target audience, increasing customer loyalty, lead generation, and interacting with your customer base. And Facebook is still one of the best social media platforms to achieve all of that.

Here are 11 examples of brands that win big with their Facebook marketing. Even if your situation is different, your budget not even worth mentioning and your existing fanbase a fraction of the brands in question – you can still learn from these amazing Facebook marketing case studies how to leverage the Facebook audience!

1. Starbucks – Case Study for Facebook Groups

The first Starbucks Pumpkin Spice Latte was sold in a test campaign in Vancouver, British Columbia in Canada, and Washington, D.C. in 2003. It was an instant success. In the fall of 2004, the drink was rolled out nationwide. It is said that Starbucks made more than 1.4 billion $ just off this drink.

The pumpkin spice latte remains a seasonal drink to this day – and is eagerly awaited for fall 2020.

But what has Pumpkin Spice Latte to do with Facebook marketing? A lot.

In 2018 Starbucks launched a Facebook group for Pumpkin Spice Latte. The group is called “Leaf Rakers Society.” It is a group to celebrate fall – remember, the Pumpkin Spice Latte is a seasonal drink that can only be bought at Starbucks in fall…

The number one reason for Starbucks’ social media team for starting this group may have been the shift in the algorithm on Facebook. That shift meant that brands needed to focus on engagement and meaningful interaction instead of just posting. And for many brands that meant a new strategy that focused more on the Facebook group than on Facebook fanpages. For Starbucks this group had more benefits:
  • for their seasonal drink, this group kept the love and excitement alive all-year-long.
  • They do not post, they do not have to be active. The group members keep the group alive.
  • They do not have to spend a dime in advertising – the popular topic allows them to do brand building based on member activity.
  • They can build anticipation for the re-release of their famous drink every year by simply recommending new fall- and pumpkin-spice-lovers to the group – even from other social networks like Twitter.
  • Listening to their customers who keep talking about beveryge recepies and Starbucks products they get valuable insights into what their audience loves or hates, how they can improve – and maybe even get new ideas for the nest super product to sell
  • All considered, the Facebook group for pumpkin spice latte lovers seems to do the trick for Starbucks.

2. Tomcat – Facebook Video Case Study

Facebook video and Facebook live video may sound a little intimidating and scary. So much may go wrong. And if it goes wrong everybody can see it.

But with a little creativity and some additional boost, there are awesome marketing results on the line.

So how about Halloween, mice, and a horror movie that develops as the audience comments on the video? This is an extraordinary example of creative content marketing utilizing one of the major trends in social media.

Tomcat is a company that focuses on rodent extermination. For Halloween 2016 they created a live video event featuring some mice in a haunted cabin. At some points in the story, the audience was asked how the story should develop: Which of the mice should die next and how should it be killed.

The video got 2.3 million unique views and an insane amount of 21% of viewers actively participated. the fanbase of the Tomcat Facebook page grew by 58%.

3. BuzzFeed -Facebook Live dance battle

This is another example of how brands can use Facebook live to engage with their audience and build brand awareness.

You probably all know BuzzFeed.

BuzzFeed used Facebook live to host an interactive dance battle called “Dance Craze Battle: Live” that asked the audience to vote on the performance of the dancers via the comments.

But they asked for even more engagement.

Instead of following a predefined schedule and guideline for the moves to be performed, they asked the audience to suggest dance moves that the dancers had to perform. And the audience complied, making the dancers perform things like “the crying college student.”

Between rounds, Buzzfeed took the opportunity to talk to the contestants and make their team more human.

In the second round of the battle, the viewers could see how the dancers performed their suggestions.

The engagement on the live videos helped keep the audience interested.

4. Hubspot – Facebook group example

In March 2020 the inbound marketing company Hubspot created a Facebook group for Marketers called Marketer to Marketer.

As with the Starbucks Facebook group for fall lovers, the Hubspot group is NOT a group to market Hubspot products. It is also not a Hubspot support group.

In fact, the group description explicitly states that the group is not monitored by the Hubspot support team.

Hubspot answers the why to the Facebook Group themselves: To build a community around their target group (=marketers.) Plus, since the reach for Facebook posts steadily declines they needed a new way of increasing engagement around their brand and product.

The impact of the group? Hubspot has close to 2 Mio followers on their Facebook fanpage. The group has just over 3200 members. The difference is too large to measure the impact of the group on Facebook engagement, reach or traffic.

However, they get direct access to members from their target group. They can interact and engage and earn valuable insights into the questions and topics on the mind of their marketing audience.

The Hubspot Facebook group is still very young but it already turned into a self-sustaining community. But it still needs ongoing promotion to keep it growing and prospering.

5. Real Estate – a Local Facebook Marketing Case Study

Looking at the other case studies, you may get the impression that you have to be a global player with a huge budget to utilize Facebook marketing. That is why I added this case study about a real estate company that wanted to increase local leads.

For this they used lead generation ads – this type of ad on Facebook already includes a contact form for which you can choose the questions to add.

The agency case study tells that the campaign generated 370 local leads in 90 days. Each lead cost 6,77$ on average.

Before you jump on the Facebook advertising train, please note that the case study does not disclose any ROI or value for the lead. I have no proof whatsoever that any dollar was ever earned with these leads.

And that is a major problem with lead generation on Facebook and you need to measure your results carefully: Leads need to make you money otherwise you will be on a straight path to bankruptcy as you pay for each lead in hard money.

6. Nike

Sure, Nike has a corporate page on Facebook. But Nike has so much more. They have specialized Fanpages for various sports like basketball, football, running, tennis, etc. Also, Nike has some pages for activity like the Nike+ Run Club. They have Nike Women. Plus they have several accounts for various products.

Why are they splitting up their marketing power this way?

Because it lets them target their audience much better. They can provide more value to the people. The sports channels give you news from your favorite sports without annoying half the audience with news from sports they are not interested in.

I have been part of the running initiative a while back when Nike had Women’s runs in various cities including my home town Berlin. These runs were perfectly organized inbound marketing campaigns that encouraged the participants to share photos and videos from the event all over social media. Nike even provided several on-location photo booths to make sure there where thousands of branded photos being passed around social media. And sure I was a fan of the related Fanpage eager awaiting updates on the next run.

With all these accounts – what is Nike talking about all day? What is their content strategy? Not their products – or not only their products. Nike products have a minor role in all this branding effort. No need to be overly promotional. A large number of updates is about news from sports or athletes that still builds brand awareness.

Note: Nike can be viewed as a case study from the past. Most of their Facebook pages are not updated anymore. They have gone on another marketing path.

7. TOMS One-For-One Strategy

The One-For-One Strategy is incorporated into TOMS: For each pair of shoes someone buys at TOMS, they will give another pair to someone in need. The same goes for eyewear. For a bag, TOMS will finance one secure birth for a mother and child. This strategy gives a lot of possibilities for stories to tell – each product in itself is a call-to-action to do something good. And this type of marketing campaign works on Facebook. They can announce new partnerships and products – people will like them and allow leveraging the good deed that is always included.

8. State Bicycle

Maybe it is because I am into sports myself – I love how State Bicycle work their Facebook page: Sure they have product updates. They also have announcements for races and news from the biking world.

What really gets their engagement going is their content strategy of photo contests, photo shoots and photos they share.

If you want to learn more about this Facebook marketing case study, you can find >more details in this report.

9. Tough Mudder

I am not so sure whether I first heard about Tough Mudder from friends – or if I first saw an ad from them on Facebook. Maybe it is because I know people who participated, or because Jonathan may take part one day. But they surely caught my attention on Facebook. Tough Mudder is an obstacle course challenge that takes place all over the world. And they rock Facebook. They are using several country accounts besides the main Facebook Fanpage. They post a mixture of videos, images, and articles around the tough mudder races. Of course, they have the huge advantage of video footage directly from the challenges. And these videos surely get a ton of engagement – who does not admire those tough mudders?

Also, they use Facebook advertising – as said before, I saw those ads multiple times. And maybe one day I will dare to go for one of the challenges… Let me first finish the Berlin Marathon in September 🙂

ToughMudder also uses Facebook video and Facebook live to cover its events. Since the Corona pandemic, there have not been any ToughMudder events but you can find some of the past videos.

They not only cover events but also live stream bootcamps.

10. FitBit – Facebook marketing case study

This is more an example of a content marketing strategy with the aid of Facebook. FitBit mainly shares their own blog posts on their Facebook fanpage. And they manage to get high engagement. Nothing going viral but solid likes and shares.

How they do it?

They do not concentrate on their products. They share posts from the FitBit blog that cover everything fitness and healthy living related. And that topic simply rocks on Facebook.

Plus they are responsive in the comments.

Whenever a fan shares a story or personal experience in the comments, FitBit is there to comment and appreciate the openness.

That kind of interaction scores high with fans.

11. Always #LikeAGirl

I can still remember seeing this campaign for the first time. And it lured me in – as thousands and millions of others.

Always offers sanitary products for women, and in 2014 they decided to change the meaning of #likeagirl. At the center of their campaign was this powerful video.

The campaign achieved what it was meant to achieve: it connected the brand „Always“ with millions of teenage girls and young female adults with a strong message that empowered them and made them proud to be #LikeAGirl.

Final Words about Facebook marketing case studies

While Facebook isn’t up front on the list of hottest marketing trends, there are still thousands of brands successful on Facebook. And not all of them base their success solely on the size of their advertising budget. They succeed because they understand how Facebook works – and what their audience on Facebook wants and likes.

The biggest trend – and probably your biggest chance for marketing success without breaking the bank – currently are Facebook groups and Facebook video or rather Facebook live. That is why we added some Facebook marketing case studies that focus on Facebook groups and Facebook videos.

Before you jump into Facebook marketing and spend thousands on advertising because you read somewhere that Facebook marketing can only be successful if you pay for it – take a close look at some of these case studies and figure out what really makes them successful. It is the content they use, the engagement they drive, and fit between their updates and their target audience. Once, you understood what works for others figure out which marketing tactics resonate with your audience!

That is what Facebook marketing success is based on!

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How to Sell on Walmart Marketplace

Walmart is one of the world’s largest retailers. And with more and more consumers shopping online these days, getting your products on Walmart.com can be a major benefit. The process for selling on Walmart Marketplace differs from selling your products in physical Walmart stores. But this gives sellers the option to reach tons of online buyers.

You can sell a huge variety of products on Walmart.com. Walmart sellers also enjoy the freedom to manage their own shop policies, products, and fulfillment. But third-party sellers require approval from Walmart and must meet rigorous qualifications before using the platform.

If you want your products to reach a wider audience, here’s what you need to know about selling on Walmart Marketplace.

What is Walmart Marketplace?

Walmart Marketplace is an ecommerce platform from Walmart. The retail giant partners with various sellers and brands to bring tons of products together on Walmart.com. It’s a similar concept to Amazon and other online marketplaces. But since you’re selling under the Walmart umbrella, third party sellers must apply and be approved beforehand.

The main benefit of selling on Walmart Marketplace is the reach. Walmart has a wide base of customers in various locations and demographics. In fact, 265 million customers shop at Walmart stores and online each week. And there are more than 100 million unique visitors to Walmart.com each month. So businesses in various niches can benefit from selling on their online marketplace. Generally, shoppers tend to be fairly price-conscious and practical-minded. So affordable items and things like household essentials tend to do better than unique or expensive items with high price tags in the Walmart market.

Walmart Marketplace does not collect any setup, listing, or monthly fees from sellers. Instead, they charge what they call a “reasonable referral fee” for each product sold. The rates for these fees vary by category. For example, the referral fee for apparel and accessories is 15 percent. The fee for consumer electronics is 8 percent. And the fee for jewelry is 20 percent. All referral fees fall somewhere between 8 and 20 percent. Even if you sell products in multiple categories, each fee is calculated separately. And they are taken out automatically. So you don’t need to calculate expenses or plan for specific payments in your product listings.

How Do I Get Approved to Sell on Walmart.com?

Selling on Walmart.com is similar to selling on other marketplace sites. You apply as a seller — then you have the ability to upload products and manage the product listings of your shop on your own. But Walmart Marketplace only accepts reputable sellers with a strong history of meeting customer expectations. Before you can start selling, you need to fill out the online application. As part of the onboarding process, you will need some basic contact information about your business along with your tax ID, EIN, and product category info. Walmart recommends setting aside about 15 minutes to complete the application. The company doesn’t outline many specific qualifications for marketplace sellers. You simply need a U.S. address and products that fit into one of Walmart’s many categories. However, the company looks to partner with established businesses. So having positive reviews, quality products, fast shipping such as one or two-day shipping and fulfillment can help you get approved. Once you’ve submitted your application, Walmart will alert you when your shop has been approved. Then you can set up your seller account and sign a Retailer Agreement contract. You’ll also need to complete your profile, connect a payment account, integrate your product catalog, and test orders. From there, you can request a final review from Walmart and launch your marketplace shop. This is not the process for selling in Walmart stores. That process requires patents, certifications, and rigorous vendor requirements. And instead of selling products direct to consumers online, you sell them to Walmart stores. They are then the ones responsible for getting them to customers. If you want to sell your products in physical retail locations, you need to complete that process separately.

What Can I Sell on Walmart Marketplace?

You can sell nearly anything on Walmart Marketplace. Items simply need to fit into one of Walmart’s categories. These include, but are not limited to:
  • Clothing and accessories
  • Home and furniture
  • Patio and Garden
  • Household Essentials
  • Pharmacy and Health
  • Personal Care Products
  • Office Supplies
  • Toys
  • Baby
  • Sporting Goods
  • Beauty
  • Auto
  • Entertainment
  • Video Games
  • Electronics
  • Arts and Crafts

There’s also a category for “everything else.” So nearly anything that might be of interest to Walmart’s extensive customer base is able to be sold on the company’s website.

Sellers add information about their product catalog during the application and setup process. So once you’re approved, you don’t need to continue getting new products approved. You simply integrate the Walmart Marketplace with your inventory management system. There are no SKU minimums or maximums. So you can use a fixed threshold method to limit what’s available or just include your entire catalog. If you have items in your spreadsheet that are out of stock, those items won’t be listed on Walmart.com.

Like other marketplaces, Walmart.com also allows third party sellers to list items that are also sold by others. The platform uses product identifiers like UPC and GTIN to match items that are already for sale. Then those listings are presented together to buyers on Walmart.com. Usually, those with the lowest prices appear in results first. But other factors like reviews are also taken into account.

Since these product identifiers are a big part of listing on Walmart Marketplace, it’s not the ideal place for selling handmade, vintage, or one-of-a-kind items. There’s also a list of prohibited items, including alcohol, artifacts, unauthorized reproductions or collectibles, drug paraphernalia, expired food, products with tampered packaging, tobacco, and firearms. Basically, any items that are deemed to be unsafe, illegal, or potentially offensive may be prohibited. And Walmart may take down listings that fall into these categories.

What Products Sell the Best on Walmart.com?

The products that sell the best on Walmart Marketplace include household essentials and electronics. An Instant Pot pressure cooker was the top-selling item in 2019. And other items like baby wipes and paper towels were among the top sellers. Popular electronics like TVs and smartphones tend to do well in the year they’re released.
This doesn’t mean you can or should only sell these items. But Walmart shoppers tend to look for practical items that are affordably priced. If you sell products that fit into any of Walmart’s categories, they may sell well as long as you can price them competitively.
In fact, small businesses that are just getting started selling on Walmart Marketplace may actually find it easier to sell products with slightly less demand. There’s likely to be less competition for the buy box and top tier listings. So it may be easier to get your products seen by customers.

What Can I Do on Walmart Seller Central?

Walmart Seller Center is the online portal that sellers can use to manage products, add listings, and fulfill orders. Once you’ve been approved as a seller, you simply log in with your credentials to access all of your seller profile.
When adding products, you can use the Walmart API to integrate your product spreadsheet or connect with your inventory management system. The Walmart Seller Center outlines what information is required under each product category. There are also templates you can use when listing. These give you the basic outline of what information you need to add for each listing.
Seller Center also includes details on sold products so you can fulfill orders quickly. You’re responsible for setting your own shipping times and policies. Then Walmart Marketplace keeps track of how successful you are when it comes to fulfillment. So if your orders regularly ship and arrive on time, you’ll receive a high rating. If you don’t stay in compliance with your own policies, you can see that you have room for improvement.
There are also options for responding to customer inquiries and sharing information about orders and shipping. So if customers have questions about a product or want to know the status of their fulfillment services, you’ll receive a notification so you can respond quickly. You also have the option to reach out to new customers if there’s an issue or if you want to share updates about their orders.
In addition, Walmart Connect Center provides details about how much you’ve earned from sales once fees have been taken out. Walmart Marketplace takes these referral fees out automatically. So you don’t need to calculate or plan for these expenses. The earnings that appear in your dashboard should already have these fees taken out.

How to Sell on Walmart Marketplace: Overview of the Process

With the approval process in hand, it’s up to you to manage your item setup, orders, and customer service on Walmart Marketplace. Here are some of the activities you’ll need to handle regularly to keep your shop up and running as a seller.

1. Add New Products

In addition to adding products when you first sign up on Walmart as a seller, you need to continue managing them as you run your shop. When you add new products to your inventory list, you need to add titles and descriptions to give customers the information they need. There are also other details that may need to be added, as outlined below.

2. Update Inventory

Walmart allows third party sellers to integrate their inventory management system or spreadsheets to automate this process. So by updating your inventory list, you can quickly add new products to your shop. Aside from adding new products, you also need to update the amount of inventory you have available as a seller. When products sell, you need to keep track of those transactions in your spreadsheet or management platform. Then those changes should appear on Walmart.com. For example, if you run out of a product or a specific variety, those products should no longer appear on the website. You can also do this manually through Walmart Seller Center.

3. Set Prices

Each product also needs a price. Consider your own costs and the costs of other products to make your listings as competitive as possible. Pricing is very important on Walmart Marketplace. So carefully analyze your costs and research your competition before finalizing your listings.

4. Include Photos

Each product also needs at least have one image, but you can add more if you wish. This gives customers a look at your products’ style and function so they can make an informed decision. This part is pretty similar to that of other online marketplaces. You start in Walmart Seller Central as you’re adding products. Then you can upload images from your computer or select them from a URL.

5. Fulfill Orders

Walmart Marketplace sellers are responsible for their own fulfillment. So sellers need to create and maintain a process for getting products out quickly. You can set Walmart fulfillment policies, including shipping dates and predicted shipping times. Then it’s up to you to keep up with them. Generally, Walmart sellers need to have an established fulfillment process before being approved. So you simply need to keep up with your policies and keep your customers happy with each purchase on Walmart.

6. Manage Returns

You also need a return policy for those customers who may not be satisfied with their purchases. When customers are dissatisfied or want to exchange their order for something else, they can reach out to you. Then you can use the Walmart Seller Center to communicate with them and facilitate returns, refunds, and exchanges. Just make sure that your actions are consistent with your return policy so customers remain satisfied with their experience. This is key for good customer service, which will get you better reviews and more visibility from Walmart as a seller.

7. Communicate with Customers

Even when customers don’t want to send back their purchases, communication is essential. You can use the Walmart Seller Center to reach out to customers with order information or requests for reviews. Customers can also reach out to you with questions or concerns about your products or shipping times. So responding to them quickly can help you create a positive experience and keep your ratings and visibility up. Make sure to have all of your contact information such as your email address and phone numbers up to date.

Best Practices When Selling on Walmart.com

Once you have the basics covered, it’s time to increase your sales. The following tips can help you get the most out of Walmart Marketplace as a seller:

  • Price competitively – Price is king for many Walmart shoppers. When you are a seller it impacts how your products appear in search results as well. The Walmart “Buy Box” is the first listing that shows up for a specific product. While other factors are taken into account as well, it seems that price plays the biggest role in determining who gets the Buy Box. So research both product and shipping prices before setting yours to ensure you end up in the Buy Box more often.
  • Start small – Selling on Walmart Marketplace can lead to a big influx in sales quickly. That’s great for businesses that can fulfill those orders. But if you run a smaller operation, it can overwhelming. For those who are unsure about their ability to handle the extra workload, start with just a few products. You can upload listings manually to start before adding your full inventory list and arranging your fulfillment centers. This gives you a chance to get used to the platform without being overwhelmed and potentially falling behind. As you grow, find the right fulfillment centers if you can’t do it yourself. And keep your shipping, whether it is one or two-day shipping a priority.
  • Choose an ecommerce management platform that integrates with Walmart – You can upload products directly to Walmart Marketplace or use a spreadsheet with your inventory list. However, the process may be easier if you use a platform that integrates with Walmart directly. These include Shopify CED Commerce, GeekSeller, M2E, and a variety of other tools you can use as a seller.
  • Include extra images – Online buyers like to see their products from multiple angles. Go above and beyond when uploading photos. Include shots that show different views, uses, and scales. And make sure images meet Walmart’s quality standards.
  • Consider your SEO – As with any product listing, relevant keywords are essential. Include searchable terms like the product name, brand, and use in the title, tags, and description. Include enough information in the description to answer customer questions. But as a seller, you should cut out fluff so your keywords and important information stand out.
  • Choose the Right Product Categories – In addition to searching, customers can also browse for products on Walmart Marketplace. If you choose the most relevant categories, shoppers are more likely to find what you have to offer. Some sellers try to stand out by varying their categories. But this can negatively impact your visibility. The more clear you are, the easier it is for the Walmart algorithm to give your products the visibility they need which can include a place in the Buy Box.
  • Offer free two-day shipping – Today’s customers want fast shipping. And they don’t want to pay for it. Walmart.com specifies which products qualify for free two-day or next-day shipping. So customers often prioritize these items. To get your products under this tag, you need to be a seller for at least 90 days. And you must have fulfilled at least 100 orders over the past month. Walmart tracks how often your products are shipped on time or early. So you must have a 95 percent success rate and meet other qualifications when it makes this consideration. With consistent shipping methods that meet these requirements, you can meet the Walmart fulfillment requirements to get listed higher in the rankings.
  • Generate positive reviews – Reviews are also considered when determining where products fall under customer searches. You can’t always control what a customer might share about your business on your Walmart store. But you can focus on providing quality customer service and answering inquiries quickly. Additionally, you might send out quick messages to happy customers to remind them to leave reviews after they’ve completed purchases.
  • Respond to Customer Inquiries Quickly – Another way to improve customer satisfaction is to answer their questions promptly. If they reach out to you about a product or ask about shipping delays, quick responses can keep them happy and informed. To accomplish this, sign in to Seller Center regularly to find updates and keep clients informed. Customer support is key in ecommerce if you want good reviews and increase your customer base. Keep track of contact information such as an email address to deliver personalized messages.
  • Advertise – Like other online marketplace platforms, you can advertise on Walmart Marketplace to improve visibility. As a seller, you can sponsor products to ensure they appear higher in search results. This represents another cost. But it’s a cost per click structure. So you can set your own budget and pay for actual results and bring visibility to your products with performance ads.

Marketplace Seller vs. Walmart Supplier

A marketplace seller is a business that sells directly on Walmart.com. You’re responsible for managing your listings, fulfillment, and customer service. So you have more control over the process. This is fairly similar to other online marketplaces.

A Walmart supplier is a company that sells products to Walmart. You can sell these items in retail stores, online, or both. But Walmart purchases these items from brands and then sells them using their own processes. The approval process of a supplier requires working with the Walmart team directly. So it tends to be more time consuming and has more requirements.

Will My Products Be Sold in Walmart Stores?

No, not unless you get separately approved to sell in stores. Marketplace (Walmart.com) is different from the physical store. If you get your products into the physical stores, you can also sell them online if Walmart chooses to list them there. But signing up for Marketplace does not mean that your products will also be sold on store shelves.

The process of selling your products in stores is different. One option is to attend an OPEN Call event. The company usually holds one each year to vet potential suppliers. You can also apply online. Then you need to work with Walmart to complete your application and supply products.

Is Selling on the Walmart Marketplace Worth It?

If you meet the qualifications as a seller on Walmart Marketplace, it’s likely worth the time investment and fees to get your products in front of so many shoppers. Shoppers are likely to already be on Walmart.com for other items. So if you can provide additional value, your shop may be very successful. You can get tons of traffic and control your own listings and fulfillment much as you can on other sites. But you don’t need to worry about any payments aside from those automatic fees when you actually make a sale. So it can be fairly affordable when you compare it to other selling methods.

However, companies that sell specialty items or who don’t have the necessary inventory management and fulfillment processes in place may struggle to thrive on Walmart.com. The website isn’t popular with shoppers looking for expensive goods or one-of-a-kind products. So if your items are not priced competitively and popular with practical-minded Walmart shoppers, it may not be worthwhile. Other ecommerce marketplaces like eBay, Etsy, and even Amazon tend to be less rigorous and time-consuming. So if you’re new to marketplaces and don’t have tons of inventory to promote, starting smaller may be a safer bet.

9. “Hey, you’ll never guess who I saw at dinner last night!”

I can’t believe this one made the list: name-dropping. I was having lunch with a friend on the Walmart buying team and mentioned writing this blog. When I asked what would be helpful to include, she practically screamed, “Name-dropping!” She then shared some awkward stories we won’t detail here. It seems that more than a few supplier meetings at the Walmart Home Office have begun with, “Hey, you’ll never guess who I saw at dinner last night!” Let me guess. . .a Walmart executive? Simply put, seeing Doug McMillon in Bentonville, AR, is like seeing Buzz Lightyear in Disneyland. People who work there experience it all the time, and it won’t help you get on the ride any faster. Instead of name-dropping, try news-dropping. If Walmart has announced a new program or strategy, bring ideas to the table of how you can support it through your business to grow sales. Conclusion: Let the First Time be the Last Time What not to ask the Walmart BuyerWhether it’s being too excited or being unprepared, it happens to everyone. The Walmart buying team is very forgiving when they hear something on this list; they just don’t want it happening in every meeting. The suppliers’ success contributes to Walmart’s success, so your buyer is there to support you through each step. Want to go into that meeting exceeding your buyer’s expectations? It helps to chat with someone who’s been there! Click here to bounce a few ideas off the Patent 2 Product team of experts. We’ve got some insight that will turn that meeting or line review into a better experience.
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9 Things a Walmart Buyer Does NOT Want to Hear

The advisors at Patent 2 Product have sat on both sides of Walmart Buyer/Supplier meeting tables. Contact us about helping you prep for that first meeting or next line review). You’ve just finished the meeting with your Walmart Buyer. They walk you to the front lobby, shake hands, and you peel off your visitor’s sticker. As your team walks through the parking lot, how many times has one of you turned to the others and said: “Wow. I wasn’t expecting that.” “Is that new, or has it always been our responsibility?” “When I asked that last question, did you guys see the buyers look at each other?” It happens. We’ve all been in meetings where we wish we could turn back time ten seconds and remain silent. Unfortunately, there’s no supplier academy to tell you what not to ask in your buyer meeting! After talking with leaders who have participated in these meetings, here are their top picks for what your Walmart Buyer does not want to hear:

1. “So, how are my sales looking?”

When a supplier opens a meeting with this question, what the Walmart Buyer hears is, “Hey, I came here unprepared. How are you?”
Plan before your meetingNever ask this; Walmart holds suppliers responsible for knowing the numbers and reporting them accurately. Go into your meeting not only knowing your key metrics, but be prepared to offer ideas on how to improve them. Pulling, understanding, and analyzing your numbers are essential to your Walmart partnership.

If you don’t quite understand how Walmart wants the sales formatted or what analysis they need, don’t go into that meeting unprepared. Click here to ask our team about meeting prep and report formatting. We assist suppliers with this and explain how to improve on the metrics your reports show.

2. “What do you think I can do to increase sales?”

It’s always a positive that the supplier wants to grow the business. However, Walmart expects suppliers to bring ideas and innovation to the meeting. Part of doing your homework is examining how Walmart is marketing nationally as well as promotions at the store level. Do a careful analysis of the return on investment for these marketing endeavors and, if they make sense for your business, present them to the buyer. Make the question “Here’s how we can drive higher sales. What do you think?” Present to the buyer how your items are performing in the stores and what factors are causing spikes and dips. Show them your plan for growth, where you want to partner, and ask for their feedback. They’ll appreciate you taking the initiative instead of being dependent on them for every answer.

3. “Here’s your copy of the DECK for our meeting.”

Don’t go in over-prepared!Just the opposite of the first example. It’s one thing to go in unprepared, but walking in over-prepared can be a waste of time. Talking with one Walmart merchant, I was told, “It’s amazing how many suppliers hand me a 100-page deck for a 30-minute meeting. I don’t need them to read me a story. We’re there to talk.” He didn’t advise eliminating PowerPoint decks in your buyer meeting. What he suggested was making any supplemental material short, concise, and straight to the point.

4. “What does my Fill Rate have to do with OTIF?”

We’ve known there was still confusion about On Time In Full for a while. In fact, OTIF went through a major update at the last Walmart Supplier Forum (now measured as OT&IF). Buyers need their suppliers to fully understand OT&IF and what’s being measured. The issue is this: some suppliers are requesting Walmart to purchase more merchandise when the numbers show they can’t fill their current orders. Most importantly, when trying to get those extra POs, your fill rate is center stage. The buyer won’t make concessions for things not working in your supply chain: Your number of trucks Issues getting appointment times Distance from your warehouse to the Walmart DC Weather (if the Walmart DC is open, the expectation is your truck is there) Understand OT&IF, talk to improving your fill rate, and the extra POs will come as sales grow. To hear the new OT&IF measurement explained, check out this short Patent 2 Product Conference Call podcast.

5. “No matter what you’ve got, we can make it!”

Private Label; it’s huge. Retailers love adding it to the assortment. More shoppers are leaving big-name brands and love the cost-savings. As much as Walmart seeks more Private Label opportunity, this is the wrong approach. Your buyer isn’t looking for a copy-cat. Don’t tell the Walmart Buyer you can produce the same cookies they already have on the shelf. Where are the gaps in the current assortment? Where are you bringing something innovative to the Private Label mix? Learn how to find those gaps in the assortment and how to fill a current Walmart need.

6. “How do I get my item placed near the bananas?”

Understand deeper insights of your market basketIt may surprise you how many suppliers actually ask this! First, it’s great that you understand the concept of market basket. Statistically, bananas are in most shoppers’ basket, so it’s highly-sought store placement. Your Walmart Buyer already knows the most popular items in the store. They’re looking for deeper market basket insights relative to your item. When you’re going for that at-shelf decision or impulse buy, it has to make sense, whether in permanent placement or cross-merchandising. If you need a deeper look at your market basket for some fresh ideas, click here to ask one of our Walmart experts.

7. “But this is what my last buyer wanted.”

If you’re a seasoned Walmart Supplier, how many buyers have you been through? You already know a new buyer can bring new expectations and “the way we’ve always done it” won’t fly. All buyers are looking to make their own mark on their category and not be a status quo buyer. When you get the opportunity to work with a new buyer, do your research. Find out as much as possible about what’s important to them. Above all, don’t assume your new buyer knows nothing! Nothing gets a new relationship off to a bad start like “schooling” or talking down to a new colleague. However, what every buyer will acknowledge is they can’t know the supply chain end to end. Here’s your chance to shine: bring your new buyer solutions to drive down costs. This may be through a better consolidation strategy to support replenishment. Position your conversation and presentation to enhance their goals. They’re looking for your solutions, not just challenges. Listening will always be more important than talking!

8. “Do you have kids? What kind of sports are they into?”

After asking several friends on the merchant team, this is an amalgam of what makes them uncomfortable. Family questions, compliments on appearance, greeting with a hug (people still do that?); it’s the supplier who wants to get too personable for a business meeting. Most Walmart Buyers will advise suppliers to simply read the room. Is your buyer chatty? Great! They may like to break the ice before business, but let them lead. If your buyer is all business, keep it at the professional level. Both of you are there to make a profit together, so don’t take it personally if they can’t remember your last visit (or your kid’s soccer team).

9. “Hey, you’ll never guess who I saw at dinner last night!”

I can’t believe this one made the list: name-dropping. I was having lunch with a friend on the Walmart buying team and mentioned writing this blog. When I asked what would be helpful to include, she practically screamed, “Name-dropping!” She then shared some awkward stories we won’t detail here. It seems that more than a few supplier meetings at the Walmart Home Office have begun with, “Hey, you’ll never guess who I saw at dinner last night!” Let me guess. . .a Walmart executive? Simply put, seeing Doug McMillon in Bentonville, AR, is like seeing Buzz Lightyear in Disneyland. People who work there experience it all the time, and it won’t help you get on the ride any faster. Instead of name-dropping, try news-dropping. If Walmart has announced a new program or strategy, bring ideas to the table of how you can support it through your business to grow sales. Conclusion: Let the First Time be the Last Time What not to ask the Walmart BuyerWhether it’s being too excited or being unprepared, it happens to everyone. The Walmart buying team is very forgiving when they hear something on this list; they just don’t want it happening in every meeting. The suppliers’ success contributes to Walmart’s success, so your buyer is there to support you through each step. Want to go into that meeting exceeding your buyer’s expectations? It helps to chat with someone who’s been there! Click here to bounce a few ideas off the Patent 2 Product team of experts. We’ve got some insight that will turn that meeting or line review into a better experience.
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EBay activates plan to shift more business to UPS and away from Postal Service because of mail delays

The online auction and sales site eBay, one of the U.S. Postal Service’s biggest customers, said it is shifting some of its business to private-sector rival United Parcel Service because of reliability issues with the agency.

“Customers want and expect to receive their packages in the fastest and most reliable way possible, which is why our collaboration with UPS comes at such a critical moment,” eBay vice president Marni Levine, who had previously expressed concerns about the Postal Service’s decreasing on-time delivery rate, wrote in a message to eBay sellers announcing the deal with UPS.

The company said that by the end of September, eBay sellers will be able to print out discounted UPS shipping labels, at a cost up to 62% cheaper than typical UPS rates.

For the Postal Service, the loss of eBay revenue could be substantial: A spreadsheet of the Postal Service’s largest customers prepared last spring showed the e-commerce site was agency’s second-largest retail customer, shipping more than 130 million items up to that point in the fiscal year. The USPS generated more than $743 million in revenue from eBay packages in that fiscal year while grappling with a $160.9 billion deficit.

EBay is second only to Amazon, which generated more than $2.3 billion in revenue for USPS during the same time frame, and whose business top Postal Service managers were fearful of losing, The Washington Post reported this week.

EBay facilitates online sales by private individuals and businesses across the country, shipping hundreds of millions of items to buyers’ doorsteps each year. In August, amid growing complaints of USPS delivery slowdowns, eBay started warning sellers who indicated they planned to ship an item via the Postal Service that, “USPS is experiencing significant delays across their delivery network. Please consider using other carrier options that may provide a better buyer experience”

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Postmaster General Louis DeJoy instituted a number of new policies after taking office in mid-June that were meant to cut costs including stricter dispatch schedules that forced postal workers to leave mail behind and prohibited extra mail trips, that have been blamed for mail backups across the country. Managers under him also cracked down on overtime, which postal workers commonly rely on to complete routes, though DeJoy has denied playing a role in those decisions.

Congressional Democrats have claimed that DeJoy’s changes held up 7% of the nation’s first-class mail. On-time delivery rates dropped from above 90% to 81.5%, a Senate report said.

Faced with mounting criticism about abrupt changes in agency operations, DeJoy recently said he would stop removing mail sorting machines and postal boxes and would restore overtime until after the election.

On Friday, a federal judge ordered the Postal Service to halt its operational changes, saying that DeJoy and President Trump are carrying out “a politically motivated attack” on mail delivery.

EBay had been watchful during the Postal Service’s tumultuous months. Levine wrote to sellers in mid-August, “We are continually monitoring shipping developments and USPS delays. We are working on other affordable, more reliable delivery options for sellers. Stay tuned for important developments in this area in the coming weeks.”

An eBay spokeswoman declined to comment when asked how many sellers would likely use UPS instead of the Postal Service. The company has said on a website about its lobbying stances that it supports “a viable postal system.”

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The Himalayan invention powered by pine needles

In Uttarakhand, in the western Himalayas, a local inventor discovered an unusual use for pine needles that is reviving the local economy, and the forest floor.
A nippy November morning saw me driving along mountain road in Tripuradevi village in India’s Pithoragarh district, Uttarakhand, with the warm sun peeping through the tall pines lining the road.

I was there to buy hand-woven organically dyed silks and cottons created by Avani, a community organisation employing local craftsmen and providing them with a steady source of income, alongside that from the surplus crops and produce they sell. But what caught my eye were heaps of pine needles drying in the sun. A man was feeding the dried pine needles into a large gently humming metal cylinder attached to more chambers and motor.

The set up, I was told, was a power plant to generate electricity from pine needles.
Uttarakhand, also known as Dev Bhoomi or “land of gods” for its many pilgrimage centres, is an Indian state in the western arm of the Himalayas, bordering

Tibet to north and Nepal to east. The state’s unique ecosystem is made up of snow-clad mountains, rivers, lakes and diverse flora and fauna. You might also like: The ingenious ‘solar canals’ of India The floating gardens of Bangladesh The rare plants that ‘bleed’ nickel A large part of this landscape is the chir pine forest, large plantations of which were introduced by British colonists and continued by later governments for commercial timber and resin. But the chir pine’s dominance in the landscape – it covers nearly 400,000 hectares (1,540 square miles) of Uttarakhand – has contributed to other problems. These pines shed their needles onto the forest floor, littering it in what is essentially delicate shreds of dry, high-energy kindling.

The loss of natural wealth translates into much more than a monetary one for our socio-cultural fabric – GCS Negi

One study estimates the net annual pine needle yield in the state of Uttarakhand to be some 1.3 million tonnes (that’s roughly a quarter of the weight of Great Pyramid of Giza). Pine needles shed by the trees between March to June cover the hill slopes, which are prone to fire.

Though forest fires play an ecological role, they also bring some inestimable losses. It challenges the make-up of the forest, says GCS Negi, head of the Centre for Socioeconomic Development at the GB Pant National Institute of Himalayan Environment. The fire renders the forest floor inhospitable to the region’s some 1,800 plants used as medicinal herbs, as well as indigenous grasses and broadleaf species such as Himalayan oak.

“Indigenous plants and trees are valuable ecologically and socially as they conserve soil and water, thus allowing rich biodiversity of wild edibles and minor forest produce that are used by locals,” says Negi. “The loss of natural wealth translates into much more than a monetary one for our socio-cultural fabric.”

He realised that it could be a way to fix several problems at once: as well as reducing the damage from fires, electricity produced from the needles could supplement or replace cooking fuel, which had to be bought in. He hoped it could even help to prevent migration away from the region, as a lack of reliable income from agriculture had forced people from the village to seek more lucrative employment in towns and cities. With this in mind, he began to research using pine needles as a fuel source for a type of energy production called biomass gasification.

The villagers thought I was out of my mind… generating electricity from pine needles seemed an alien concept – Rajnish Jain

This technology had started to gain traction in India in 1994, when the engineer S Dasappa and his team at the Indian Institute of Science, Bangalore started working on improving biomass gasifiers in collaboration with the engineering company Dasag, based in Switzerland. They experimented not with pine needles, but with agricultural waste like rice husks, leaves and coconut shells as feedstock, heated to over 1,000C in a reduced oxygen environment. In those conditions, the needles gave off a mixture of gases, including carbon monoxide, methane and hydrogen. These gases were further cleaned of dust and tar and burned to power an electric generator.

Dasappa’s design has since been improved further and patented. There are currently about 30 units operating in villages of Karnataka, India. “With abundant agricultural and forest biomass available in India, it is a low-cost energy source that has lower impact on the environment than fossil fuels,” says Dasappa. It has caught on elsewhere too, with uptake in countries including United States, Switzerland and Japan.

But Rajnish says his suggestion to utilise pine needles for biomass gasification was met with resistance and rejection from government officials and researchers at the time in 2007. They argued that even though highly combustible, the density of pine needles was not enough to be used as an energy source for gasification. They were not the only ones with questions. “The villagers thought I was out of my mind,” recalls Rajnish. “They did not know about biomass gasification, and generating electricity from pine needles seemed an alien concept.”

The idea, however, intrigued the Volkart Foundation, set up by Swiss brothers in 1953 to support NGOs working for poor communities, and they invested in the pine needle experiment. A few trials later, Rajnish struck on the idea of chopping the pine needles into smaller pieces to increase the density before feeding to the gasifier – and it worked. In 2009, he succeeded in setting up the world’s first 9 kWh pine needle power plant. Today, the electricity generated by the small plant is used to power the Avani workshop, while leftover carbon powder produced is bound together with locally made glue and made into briquettes to burn as a sustainable form of cooking fuel.

Encouraged by his success, Rajnish participated in many accelerator programmes to pitch his work and pursued support from government agencies. He believed his venture could provide a sustainable livelihood for villagers and, he hoped, reduce forest fires if rolled out on a large scale. It led to the setting up of Avani Bio Energy, a for-profit social enterprise, in 2011.

Avani Bio Energy then signed an agreement with the state electrical facility, which under national policy was required to source a percentage of its energy from renewable sources. By 2014, a policy on the commercial use of pine needles, including for gasification among other purposes, was brought into effect by the Uttarakhand Renewable Energy Development Agency.

But there were hurdles to rolling the project out on a large scale. The mountainous terrain in the region makes it challenging to collect pine needles. With unmotorable slopes, pine needles could only be collected manually. For every 1 kWh generated, 1.5 kilos of pine needles are required. An ambitious 120 kWh plant would require a huge amount of feedstock. So, they thought again and decided instead to install smaller decentralised power plants of 10-25 kWh each, so the volume of pine needles needed could be met with manual collection.

The village women, who Rajnish approached to collect needles, were initially hesitant. But each kilo of needles brought to the plant fetched 2 rupees (3 cents/2 pence), which over 6-7 hours’ work amounted to double the typical minimum daily wage for the state.

Asha Devi, a needle collector from Hasyudi village who has been collecting pine needles for three years, now has a very different view of the project. “I earned 8,000 rupees ($110/£85) in the first year and bought a buffalo for milk,” she says. This year she has earned up to 17,000 rupees ($230/£180) in one month. With her savings from last year, she constructed an additional room in her house and plans to add a kitchen next year. “It is convenient as I finish my house chores before I go for needle collection,” she says.

There are now seven 25 kWh power plants up and running at different villages, with five of those owned by village-based entrepreneurs, with a further five 10 kWh plants in other villages. Forty more projects are on the horizon.

As well as boosting the local economy, Rajnish hopes that the collection of pine needles has lowered the local fire risk. In the nearby areas that have seen consistent removal of pine needles, there has been almost no incidence of fire, he says.

The indigenous medicinal plants, usually destroyed by fires, have also been seen reviving. If the optimal conditions for these plants are maintained, some native plant species could begin to regenerate, says the GB Pant National Institute of Himalayan Environment’s Negi.

This year, the shoots of the kafal, or bay berry, have been seen emerging in Tripuradevi. The golden Himalayan raspberry and the Himalayan oak are also cropping up. They are a sign of what can happen when something seen as little more than a nuisance and a fire risk is put to good use, rejuvenating the forest floor and bringing hope to the local community.

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Who Invented the Lightbulb?

The question of who should get credit for inventing the lightbulb is deceptively complex, and reveals several aspects of the history of science and technology worth revealing. Most people would probably answer the question – Thomas Edison. However, this is more than just overly simplistic. It is arguably wrong. This question has also become political, made so when presidential candidate Joe Biden claims that a black man invented the lightbulb, not Edison. This too is wrong, but is perhaps as correct as the claim that Edison was the inventor.

The question itself betrays an underlying assumption that is flawed, and so there is no one correct answer. That is really what people are referring to with Edison – not that he invented the lightbulb but that he brought the concept over the finish line to a marketable product. Edison sort-of did that, and he does deserve credit for the tweak he did develop at Menlo Park. Instead, we have to confront the underlying assumption – that one person or entity mostly or entirely invented the lightbulb. Rather, creating the lightbulb was an iterative process with many people involved and no clear objective demarcation line. However, there was a sort-of demarcation line – the first marketable lightbulb.

The real story of the lightbulb begins in 1802 with Humphrey Davy He developed an electric arc lamp by connecting Volta’s electric pile (basically a battery) to charcoal electrodes. The electrodes made a bright arc of light, but it burned too bright for everyday use and burned out too quickly to be practical. But still, Davy gets credit as the first person to use electricity to generate light. Arc lamps of various designs were used for outdoor lighting, such as street light and lighthouses, and for stage lighting until fairly recently.

In 1841 Frederick de Moleyns received the first patent for a light bulb – a glass bulb with a vacuum containing platinum filaments. The bulb worked, but the platinum was expensive. Further, the technology for making vacuums inside bulbs was still not efficient. The glass also had a tendency to blacken, reducing the light emitted over time. So we are not commercially viable yet, but all the elements of a modern incandescent bulb are already there. The technology for evacuating bulbs without disturbing the filaments improved over time. In 1865, German chemist Hermann Sprengel developed the mercury vacuum pump, which was soon adopted by lightbulb inventors.

In 1874 Henry Woodward and Mathew Evans filed a patent in the US and Canada for an incandescent bulb with a carbon filament. This seems to have been a commercially viable lightbulb, but the company did not sell well and eventually they sold their patent to Edison. Soon after that, in 1878 William E. Sawyer and Albion Man received a US patent for an incandescent bulb filled with nitrogen with a now familiar zigzagging emmiter. The bulb worked well, but the rigid design made it vulnerable to cracking.

At this point all the basic elements of a modern incandescent bulb are in place. Edison developed none of them. But still the bulb had limitations that prevented it from being commercially viable. It should also be noted that commercial viability was also limited by the batteries of the time and the vacuum technology. Once electrification and a practical way to evacuate a glass bulb existed, the lightbulb was ripe. This is where both Edison and Swan (a British inventor) come it.

Joseph Swan developed his own version of the incandescent bulb, with an evacuated bulb, platinum lead wires, and carbon light-emitting filaments. However, his design still had problems. The carbon filaments were thick and required lots of juice to heat up and glow. Still, Swan receive a patent in the UK for this design in 1879, and in 1881 developed his own lighting company, with improvements on his original design.

At around the same time, Edison was working on his version of the lightbulb. His innovation was to use a thin carbon filament with high electrical resistance. He eventually settled on a carbonized bamboo filament – really his primary technological contribution to the invention of the commercial lightbulb. Edison patented his innovations, and went on tour making sure to align his name with the invention of the lightbulb as much as possible. Swan and Edison eventually sued each other for patent infringement – and Swan won. So legally, one might argue that Swan invented the commercial lightbulb. Edison’s solution was to partner with Swan, forming a joint company, and then totally buying out Swan several years later. So Edison acquired the patents for the lightbulb from others as much as he earned them himself.

Edison does get credit for popularizing the electric lightbulb, and for connecting this to public electricity generation and distribution. Once he had all the patents, his company continued to iterate and improve the technology. This is also where Biden’s “black man” comes in. He was referring to Lewis Howard Latimer. Latimer received a patent in 1882 for a process for improved production of carbon filaments for lightbulbs. Latimer then went to work for the Edison Electric Light Company. Latimer made a significant contribution to the manufacture of lightbulbs, but he didn’t “invent” the lightbulb by any stretch, and is at best a footnote on this interesting history.

While Edison’s contribution to the lightbulb was significant, he did not “invent” the lightbulb. At most he put the last piece into place, acquired any competing patents, and then marketed himself as the inventor. This strategy worked.

But like many stories of both technological and scientific progress, many people contributed over time, and it is not even possible to give credit to any single person.

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Shark Tank’ investor Kevin O’Leary: When it’s time to close your business and call it quits

Key Points

‘Shark Tank’ investor Kevin O’Leary gives advice on when it’s time to close your business and call it quits at CNBC’s Small Business Playbook virtual summit on Wednesday.

Consumer behaviors have shifted and now may be the time to pivot your business in the digital economy, he said.

Never use more than one-third of your company’s free cash flow to service debt or you will never be able to reinvest and grow your business.

Investor Kevin O’Leary believes in tough love, especially now when entrepreneurs on Main Street are trying to figure out whether it’s time to hang onto their business — or shut down.

“This is the time to stay focused and positive,” O’Leary said, speaking at CNBC’s Small Business Playbook virtual summit on Wednesday. “Entrepreneurs are creative by nature and many will live to see another day through this [pandemic]; but others will not. You’ll know in your heart when it just isn’t going to work out.”

He should know. O’Leary started his first business out of his basement in 1986. In 1999, O’Leary and his co-founders sold the company to the Mattel Toy Company for $4.2 billion. He has had several hits since. In addition to investing in successful companies via ABC’s “Shark Tank,” O’Leary founded businesses including O’Shares ETFs, O’Leary Financial Group and O’Leary Wines.

Along with success, O’Leary has also had his share of failures, and that offers an important lesson for entrepreneurs. “Sometimes it just makes more sense to start fresh when you have more certainty about market conditions,” he says. “There is no shame in shutting down a business if you think it’s no longer viable.”

He notes many successful entrepreneurs failed two or three times before launching a venture that works for them. On a personal note, O’Leary projects that 20% of his small private portfolio companies will fail because they haven’t been able to reinvent their business models during the pandemic.

“Remember, you only need one hit to set yourself free in life. This may be the time to pivot and pursue something new in the digital America 2.0 economy right now,” he explained. “Consumer behaviors have shifted. It’s all about selling products or services directly to consumers who have gotten used to this method of shopping since the Covid-19 health crisis began. It’s a whole new generation of people who are planning not to go to stores anymore.”

It’s a brand new world

This is a fundamental shift and it is changing the way business works, O’Leary notes. There are some industries, such as travel, entertainment and weddings, that are permanently damaged until a therapeutic or vaccine is available.

O’Leary’s comments came as policymakers in Washington, D.C., debate another piece of coronavirus relief legislation. The Paycheck Protection Program under the CARES Act expired last Saturday for businesses who have not yet applied for a loan. Lawmakers have yet to reach any agreement over a new aid package for Americans, including new loan programs and second-draw PPP loans for businesses in need. President Trump’s executive orders signed over the weekend, which include unemployment assistance, a payroll tax hiatus, student loan relief and eviction protection, do not cover small business.

“It’s a brand new world,” O’Leary said. “The key is to communicate and forge a direct relationship with your customers. You need to reach out to them and explain the benefit of your product and services. Above all, let them know you are still in business, even if your physical store has closed.”

Shopify and Facebook offer a platform and other tools that can help you make that digital pivot, he said.

There is a big value proposition with a digital model since you can save a lot on operating costs including rent and distribution, but you need to assess another key factor. “Ask yourself, ‘What is my customer acquisition cost?’ and ‘What is the lifetime value of my customer?’ If it costs you $20 to acquire a customer, and you only profit $10 from each customer, you’re going to go bankrupt. This is the simple model everyone should be looking at,” he said.

As O’Leary explains, you must get your customer acquisition costs below their lifetime value (future net profit from the relationship), or your business will never make enough money to survive. You’ll blow it all on advertising.

Keep in mind, taking on debt when your business is in trouble is not always a good idea, O’Leary cautions. If you have no income or revenue I do not recommend taking on debt at this time. “Use this simple formula: Never use more than one-third of your company’s free cash flow to service debt. And that includes the principal and interest payments. That’s the magic number.”

According to the small business expert, the minute you go beyond that amount, you put tremendous pressure on your company. “Servicing debt doesn’t allow you to reinvest in the business. It doesn’t allow you to have any free cash flow to acquire new customers. It doesn’t allow you to grow,” O’Leary said. “It becomes a barbell of weight on you, and that’s very stressful. Sometimes it makes more sense to just let it go.”

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Walmart Marketplace seller additions surge following Shopify deal, up 3x from January

Walmart’s recent partnership with Shopify to expand its online marketplace appears to already be paying off. The retailer in June announced it was opening its marketplace to Shopify’s small business sellers with the goal of onboarding 1,200 new sellers by the end of 2020. Following the Shopify announcement, the marketplace added 3,000 more sellers in June and is expected to exceed 3,600 in July, according to a new report from research firm Marketplace Pulse. That’s triple how many sellers it was adding at the beginning of 2020, the firm’s numbers indicate.

The e-commerce intelligence firm, which works directly with retailers and marketplaces and produces industry analysis, looked into Walmart Marketplace’s accelerated growth following the Shopify deal. It found that within the first six weeks after the June 15th partnership announcement, Walmart’s Marketplace added more than 5,000 new sellers.

In comparison, Walmart’s Marketplace added only 1,296 new sellers in January 2020. That figure grew to 2,290 in April, then 3,296 by June. With July’s estimates included, the marketplace will have topped 15,000 new sellers in 2020 by this month’s end. To date, the marketplace has surpassed 50,000 sellers — which is double in size from June 2019.

Walmart’s marketplace growth is much slower than Amazon’s, the firm notes. But this is, in part, due to its process around adding sellers. Its marketplace requires sellers go through an approval process, which is something it does in an attempt to avoid counterfeiters and other issues. Amazon, meanwhile, adds thousands of sellers daily.

Of course, not all this recent growth can be attributable to Shopify. The pandemic has sent a surge of customers to shop online and sellers are arriving to meet that demand. But Marketplace Pulse believes Walmart has already surpassed its goal of 1,200 new Shopify sellers by year-end.

These newly added Shopify stores aren’t distinguished from other sellers on the website, so there’s not an automated way to count their numbers. But the firm says it manually checked dozens of new additions to confirm their Shopify affiliation and believes the accelerated marketplace growth is closely tied to the new e-commerce deal.

Of course, seller growth is not the only metric used to judge a marketplace’s success. Walmart’s catalog size has actually decreased despite all the new additions, the report noted. Since the start of 2020, the total number of products has shrunk by nearly 15 million, from around 50 million down to 36 million, the firm said. This was related to a few large sellers delisting their catalogs of mostly products in the Home and Books categories, though. Walmart disputes this figure, saying it still has 75 million, not ~35 million, which is stable year-over-year.

The report also added that what matters most is not the size or the number of sellers, but rather the sellers’ performance. On that front, the firm recently found that Walmart’s marketplace, though smaller, was outperforming both Amazon and eBay, driven by the significant increase in Walmart.com shoppers during the pandemic. That increased traffic was also aided by Walmart’s merging of its Grocery app into its main app, a transition that is still underway. Around a month after the merge began, the Walmart app on May 13th became the No. 1 shopping app on iPhone.

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Design Patents Are Useless. So Why Are They Getting a Boost in DC?

When we talk about patents, we’re usually talking about “utility” patents. Utility patents protect inventions that claim to have some practical application or use. (A lot of them still claim things that are actually useless, but they’re supposed to be potentially useful.)

“Design” patents, by contrast, protect only the ornamental or decorative aspects of a design. They don’t protect any kind of functionality. If there’s a functional work to protect, only a utility patent will do.

Because design patents can only protect non-functional works, they’re kind of like copyrights for visual works. And the bar for creativity and originality in a patented design is low—so low that even a standard-issue graphical user interface can get patent protection, as our latest Stupid Patent of the Month shows.

Shown below is a patented design owned by Siemens Healthcare GmbH, a company that’s part of Siemens, the most prolific patent-filer in Europe:

This patent, U.S. Patent No. D872,112, is a relatively standard GUI, with rows of circular icons displayed beneath a header bar. But the patent doesn’t protect everything in that picture—importantly, the portions circled by broken lines are not part of the patented design. The design also includes features that are not in the picture—namely, the colors used in the display. To understand what’s actually been patented here, a member of the public must do more: they can request and pay for a hard copy of the patent from the U.S. Patent Office or navigate through the PTO’s (extremely clunky) PAIR database in the hopes of finding a downloadable version of the originally-filed image.

Between the image’s poor quality and the broken lines denoting unprotected features, it’s practically to impossible to identify what the patented design even is. Is it the specific arrangement of circular icons in the three rows? If so, then why are certain circular icons excluded? Is it the icons that a Siemens designer created to represent things like “users” and “receivers?” If it’s this hard to say what the patented design actually is, it will be even harder to determine whether other designs are infringing. Infringement turns on the comparison between the patented design, the accused design, and the prior art. But that analysis can’t even happen until it is clear exactly what a design patent protects.

The low examination standards, lack of clarity, and resulting low quality of design patents already pose a big problem. But it could be about to get worse. Pro-patent lobbyists are pushing to give design patent owners more power over tech developers and users. They’ve introduced a bill that gives Customs and Border Protection the power to seize products at the border just by sizing them up and comparing them to design patents, whose owners are demanding this new type of special treatment.

Giving CBP so much power will pose a real danger to ordinary technology users. Imagine CBP trying to determine infringement for a patented design like the one above, which is a GUI for medical software. To assess infringement, CBP officers could examine a device, including software applications, to see if they match patented designs in the registry. When those applications pertain to health services, the medical privacy of users may be at risk.

Design patents owners don’t need more power than they have today. Instead, we should be asking whether design patents should exist at all. We already have copyright. It’s not clear that granting extra patent rights to works with no practical application provides any benefit to the public at all.

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Crowdfunding: How to Raise Money & Launch a Campaign

Crowdfunding is an increasingly popular option for any small business looking to raise money and it’s one of the most accessible ways of financing a new idea or product. But launching a successful crowdfunding campaign isn’t as easy as setting up a page on Kickstarter or Indiegogo and waiting for the money to roll in.

In this guide, we’ll look at how to plan, prep, and launch a successful crowdfunding campaign, as well as how to transition your idea into an enduring, self-sustaining business once your campaign is over.

What is crowdfunding?

Instead of seeking a large sum from a single source, like angel investors or a bank, crowdfunding raises small amounts of money from a large number of people—often in exchange for direct rewards—who want to see a project succeed.

The concept of reaching a fundraising goal through crowdfunding isn’t new, but over the past decade or so, online platforms like Kickstarter, Indiegogo, GoFundMe, and Crowdfunder have made the process of raising money online for a business, product, or charitable cause easy and accessible to everyone. They serve as virtual matchmakers for entrepreneurs and backers, provide the structure and space to host your campaign, and the ability to accept funding.

How does crowdfunding work?

Crowdfunding sites offer you a place to host your campaign, usually in exchange for a percentage of the money raised. Backers are given various “rewards” based on the level of funding they provide. These rewards can include an exclusive promotional item, advance access to the product being supported, or some form of public recognition—the more funding offered, the better the reward. (Some campaigns offer equity in place of rewards, but in this guide, we’ll focus on the latter model.)

Most crowdfunding websites require you to set a financial goal for your campaign, as well as a timeframe in which to reach that goal, usually between 30 and 90 days. Some platforms let you keep all of the money raised during a campaign, whether you meet your goal or not. Others, like Kickstarter, use an all-or-nothing model that returns funds to backers if your campaign falls short.

If your campaign is successful, you’ll be in an excellent position to transition into a sustainable business by leveraging the audience built through your efforts crowdfunding.

Other types of crowdfunding

Projects that rely on crowdfunding or online fundraising generally fall into one of three main buckets:

  • Equity: Equity crowdfunding gives contributors partial ownership of a business in exchange for the capital they provide.
  • Donation: Donation-based crowdfunding provides no financial rewards or incentives for backers, so it’s most often used for charitable purposes.
  • Rewards: As covered above, any type of crowdfunding campaign that incentivizes contributors with rewards (but not a stake in the resulting business) upon completion can be considered rewards-based. We’ll mostly focus on this approach throughout the rest of our guide.

The benefits of crowdfunding

Crowdfunding offers several valuable perks on top of being a great way to raise startup capital.

Validating your ideas

The more you know about the target market for the product or business you plan to launch, the more you’ll reduce your financial risk, and crowdfunding can be an excellent tool for conducting market research.

Pre-selling your product via a crowdfunding campaign helps validate your creative projects by giving you a solid answer to the question, “Will anyone buy this?” Manufacturing your product without any indication of how it will sell could cost you a significant amount of time and money if it turns out the demand for your idea isn’t strong.

Knowing people want what you’re selling allows you to plan and scale your business with confidence.

Building a following

Having a solid following before you ship your first product is a rare and significant advantage. When done properly, crowdfunding, especially when combined with social media and press coverage, can help you build a dedicated audience that will ideally stay with you as your business grows.

Creating an accessible source of funding

Securing financing can be both time-consuming and difficult for many new business owners. Untested ideas or new business models may not appeal to conservative lenders, like banks, and while finding private investors to help raise funds is an option, you’ll usually need to give up a portion of ownership in exchange.

Running a successful crowdfunding campaign can be a big undertaking, but for many founders, it also can be easier and more rewarding than traditional methods.

What can I crowdfund?

There aren’t many restrictions on what types of products or businesses can be crowdfunded, but the most successful projects tend to have a few key things in common:

  • A specific product. If you look at the biggest crowdfunding success stories, you’ll find most of them focused on funding individual products, not stores. There’s a reason for that: backers tend to want to support tangible items, not broad ideas. For the best chance of success, seek backing for your best product. You can build a store later, after your initial idea has taken off.
  • A targeted, niche audience. Create a product that fills a need or a gap, then find the market that craves it. Often, founders create products that solve a problem that exists in their own lives, like MindJournal did when they couldn’t find a journaling tool designed for what they needed. Develop a prototype that taps into those needs.
  • Strong differentiation. To generate buzz and attract backers, your product has to be something that can’t be found elsewhere. Do your research to ensure your product is one of a kind.