Walmart’s marketplace is a fast-growing e-commerce platform, offering non-resident sellers a significant opportunity to reach millions of U.S. shoppers. However, selling on Walmart comes with stricter requirements than selling on platforms like Amazon. Walmart mandates that most sellers operate as U.S. businesses or taxpayers, making setting up the right U.S. entity and completing the correct tax forms essential.
As of February 2024, sellers from Canada, Chile, China, Germany, India, Hong Kong, the United Kingdom, Japan, Mexico, South Korea, Singapore, Thailand, Taiwan, Turkey, and Vietnam are eligible to sell directly on Walmart’s marketplace without forming a U.S. entity. For sellers from other countries, forming a U.S. taxpayer entity requires completing a W-9 and establishing a U.S. business presence.
Additionally, Walmart is known to check the IP address used to create your account. Opening the account from a computer outside the U.S. may raise red flags, impacting your approval process. A Walmart onboarding specialist confirmed this at the 2024 Prosper Show in Las Vegas, emphasizing the importance of complying with U.S. operational requirements, including being present physically or virtually in the U.S. during the application process.
Here are the Steps to Sell on Walmart Marketplace:
- Apply to be a Marketplace Seller
- Complete Your Registration
- Complete Partner Profile
- Complete Item Setup
- Test Items and Orders
- Launch Your Account
Let’s focus on the most important part of the process, what are the possible requirements (since they are not made public), and the steps to apply and get approved to sell on Walmart.
Walmart Marketplace Seller Requirements
Before applying to be a seller on Walmart marketplace, please review and gather the following. Although Walmart does not provide you with an exact checklist for success, especially with who may be accepted and who is not accepted, our guidelines will give you the best opportunity for approval.
Walmart Overview Before You Apply:
- History of the marketplace or eCommerce success. We recommend at least two years of e-commerce experience selling on another marketplace such as Amazon or eBay and your website or a Shopify store.
- Ensure that none of your products appear on Walmart Marketplace’s Prohibited Products Policy*
- All your products have UPC barcodes**
- DUNS Number (Business Credit)***
- Shipping Account Established (USPS, UPS, FedEx)****
*Walmart Marketplace’s Prohibited Products Policy. These include hazardous materials, alcohol, certain types of food, offensive products, and more. Please thoroughly review the list—if you have even just one of these items in your catalog, your Walmart Marketplace application will be denied.
**If you are planning to sell private label products. You will need to get a UPC barcode for your product. You can get barcodes from https://www.gs1us.org/. There are also plenty of resellers of barcodes on the internet that offer a lower price.
***https://www.dnb.com/ – get it within two weeks. It does like your business credit. It tells Walmart how your business will stand in the eyes of the whole credit community in the U.S.
Note: You might do DUNS first before you start your application process because once you start applying, you need to finish the whole application within the same session. Your progress will not be saved if you close your browser or tab.
The application process should take about 10-15 minutes if you have all your information available. Walmart marketplace recommends using Google Chrome on either your laptop or tablet. Make sure you have everything that is mentioned above.
**** You can sign up directly with each shipping company (if you have high volume). Or go with a paid subscription service like endicia, shipstation, or stamp.com. There is a free service called pirateship.com that offers USPS and UPS labels at a discount rate.
NOTE: Providing as much information about your business upfront will save you time later. If you have back-and-forth correspondence with Walmart Marketplace to fill any gaps in your application, it’s a good idea to act fast to avoid any delays in the review process.
What you’ll need to Apply to Walmart:
- U. S. Business Tax ID (SSN not accepted) – U.S. taxpayers
- Fill out W9 (https://www.irs.gov/pub/irs-pdf/fw9.pdf). See comments on the W-8ECI on this page.
- EIN verification letter from the Department of Treasury
- Address or place of physical operations
- U. S. business address (not a Registered Agent Address)
- U.S. bank account (verification is difficult)
- U.S. phone number
- Planned integration method for your product catalog (bulk upload, API, solution provider)
- Primary product categories, catalog size, and related information (e.g., total SKUs you will be selling on Walmart.com initially with verified UPC information, used vs. refurbished, etc.)
Which U.S. Company is Best to Sell on Walmart?
Understanding Walmart’s tax form options will help reverse-engineer your U.S. LLC structure. To sell on Walmart as a non-resident, your U.S. entity must be taxed as a corporation or partnership—not as a single-member LLC disregarded for tax purposes. This ensures that the entity qualifies to complete a W-9 form, a requirement for creating a U.S. taxpayer that meets Walmart’s strict compliance and operational standards.
From here, we’ll dive deeper into the W-9 process and its impact on your U.S. tax responsibilities.
The Importance of Filing the Right Tax Form: W-9 vs. W-8ECI
When applying to sell on Walmart, non-resident sellers must decide whether to file a W-9 or a W-8ECI. This choice directly impacts your U.S. tax obligations and overall business structure.
W-9 Form: By filing a W-9, you create a U.S. person for tax purposes, which can be a U.S. LLC taxed as a corporation or partnership. This means you are considered a U.S. taxpayer, and your U.S. business activities will be subject to U.S. tax reporting and compliance. Walmart prefers sellers to file a W-9 because they want to work exclusively with U.S. businesses and taxpayers.
W-8ECI Form: This form is for foreign sellers who claim their income is effectively connected to a U.S. trade or business (USTOB). While it allows you to maintain your status as a foreign entity, it triggers effectively connected income (ECI) taxation. Most sellers prefer to avoid this option due to the complexities and uncertainties it creates, particularly when navigating U.S. tax obligations. Unlike Amazon, Walmart doesn’t offer much flexibility in allowing sellers to avoid becoming a U.S. taxpayer.
Why Filing a W-9 is the Better Approach
For Walmart sellers, completing a W-9 is often the better choice. By forming a U.S. LLC taxed as a partnership or corporation, you meet Walmart’s requirements and avoid the complexities of the W-8ECI filing. However, this choice triggers other U.S. tax considerations that must be addressed, including determining if your LLC is engaged in a U.S. trade or business (USTOB) and whether the income you generate is effectively connected income (ECI).
Simply creating a U.S. taxpayer entity (through the W-9) does not automatically mean you are subject to U.S. taxes—this depends on whether your U.S. LLC or its members have USTOB and generate ECI. If the LLC is not engaged in a USTOB, it may not owe U.S. taxes on its profits. However, foreign members receiving ECI will generally be required to file U.S. tax returns and pay taxes on their share of the income.
What is U.S. Trade or Business (USTOB) and Effectively Connected Income (ECI)?
U.S. Trade or Business (USTOB): For U.S. tax purposes, if your LLC (taxed as a partnership or corporation) is actively engaged in regular and substantial business activities within the U.S., it is likely classified as engaged in a U.S. trade or business. This classification determines whether the foreign members of the LLC are required to file U.S. taxes.
Effectively Connected Income (ECI): ECI refers to income that is earned in connection with a U.S. trade or business. If your LLC generates ECI, foreign members are subject to U.S. taxation on their share of that income, and they must file U.S. tax returns (such as Form 1040-NR or Form 1120-F) and pay taxes accordingly.
Choosing the right structure—whether an LLC is taxed as a corporation or a partnership—plays a significant role in determining whether the foreign members are taxed on U.S.-sourced income. Working with tax professionals is essential to ensure compliance and minimize tax liabilities.
Complexities of an LLC Taxed as a Partnership
An LLC taxed as a partnership offers pass-through taxation, where the LLC itself does not pay U.S. taxes, but its members report their share of profits or losses on their individual tax returns. Determining whether this income is effectively connected with a U.S. trade or business is critical for foreign members. If it is, U.S. taxes will be due. If not, depending on tax treaties, there may be opportunities to mitigate or avoid U.S. tax obligations.
On platforms like Amazon, non-resident sellers often avoid creating a U.S. taxpayer entity and use a single-member LLC disregarded for U.S. tax purposes. However, for Walmart, creating a U.S. taxpayer entity (via W-9) is essential, and the decision to tax an LLC as a partnership requires careful tax planning.
The Role of Tax Treaties
If you reside in a country that has a tax treaty with the U.S., you may be able to reduce or eliminate certain U.S. taxes. For instance, tax treaties often reduce withholding taxes on dividends and other income. Understanding these treaties and their interaction with U.S. tax laws is critical for minimizing tax liabilities when selling on Walmart.
A tax treaty may allow you to reduce branch profits tax or dividends withholding tax, but this requires careful analysis of both the U.S. tax system and the rules in your home country.
Key Considerations for Non-Resident Walmart Sellers
Here are some of the important questions and steps you should address before setting up your U.S. entity for Walmart:
- Are you engaged in a U.S. trade or business?
- Is your income classified as effectively connected income (ECI)?
- Will you be subject to U.S. taxes?
- What is the best tax structure for your U.S. entity (LLC taxed as a partnership or corporation)?
- Can you benefit from tax treaties with your home country?
- How should you structure dividend payments or retain profits in the U.S.?
- What U.S. tax returns and state tax filings are required?
Our U.S. Expansion Packages
If you’re serious about qualifying to sell on Walmart and navigating the complexities of U.S. taxation, our U.S. Expansion Packages are designed to help you do it right. This is not for startup sellers with limited capital looking for shortcuts. Our packages include everything from reviewing and amending your LLC formation to ensuring proper U.S. tax strategy and compliance.
We help you avoid costly mistakes like incorrectly completing the W-9 or using the wrong business structure. Our goal is to ensure that you fully understand your tax responsibilities and have a comprehensive plan that fits your business needs. Walmart’s requirements for non-resident sellers are strict, and we provide the expertise needed to ensure you are set up for success.
If you’re ready to make the right decisions for your Walmart expansion and avoid unnecessary tax risks, we’re here to guide you through every step.