n the world of ecommerce, there’s no one-size-fits-all model. But when it comes to selling on Walmart, many sellers compare two popular approaches: 2-Step FBM and Dropshipping. Below, I’ll break down both models, their pros & cons, and why many experts (including us at EcomAxiom) prefer 2-Step FBM for sustainable growth.
What Is Dropshipping?
Dropshipping is the model where you list products for sale without holding inventory. When a customer orders, you forward that order to a supplier who ships it directly to the customer. You act as the middleman, earning the margin between your price and the supplier’s cost.
Pros of Dropshipping:
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Very low upfront cost (no inventory needed)
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Easy to test many product ideas
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Minimal logistics headache
Cons of Dropshipping:
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Less control over quality and shipping speed
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Higher risk of supplier errors
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Slim margins because of competition
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Risk of violation of marketplace policies (if you use unauthorized supplier or retailer to fulfill)
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Customer service issues if supplier fails
Dropshipping works, especially for quick tests or new sellers. But on large marketplaces like Walmart, the margin for error is slim.
What Is the 2-Step FBM Model?
The 2-Step FBM (Fulfillment by Merchant) model is a hybrid of dropshipping and traditional retail. It works like this:
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You source products from vetted suppliers (wholesale or distributors) and have them shipped to a local warehouse or prep center.
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When a customer orders on Walmart, the local facility handles order fulfillment — packaging, reboxing if needed, removing supplier branding, and shipping it to the customer under your name.
This gives you control over product presentation, branding, shipping times, and reduces the risk of account suspension.
This 2-Step model is also sometimes referred to as Two-Step Dropshipping or Safe Dropship Method because it helps avoid many of the pitfalls of simple dropshipping.
Side-by-Side Comparison
| Feature | Dropshipping | 2-Step FBM |
|---|---|---|
| Upfront Cost | Very low | Moderate (warehousing & handling) |
| Quality & Branding | Low control | High control |
| Shipping Time | Longer, overseas | Faster with local warehouse |
| Account Safety | Higher suspension risk | Safer if done correctly |
| Margins | Often lower | Higher margins possible |
| Scalability | Easy to start, harder to scale | Better for scaling sustainably |
Why 2-Step FBM Often Outperforms Dropshipping on Walmart
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Better Compliance & Safety
Walmart’s marketplace is strict about seller behavior, packaging, tracking, and branding. The 2-Step model helps you maintain control and reduce risk. -
Faster Shipping, Happy Customers
Local fulfillment centers mean faster delivery, fewer returns, and more satisfied buyers. -
Brand Control & Professionalism
You can remove supplier branding, add your own packaging, and present a more professional image. -
Higher Margins Over Time
Because you can negotiate better wholesale rates with suppliers, your profit margin improves as you scale. -
Sustainable Growth
With good processes and trust, you avoid sudden bans that plague dropship-only sellers.
How to Implement 2-Step FBM on Walmart (High-Level Steps)
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Set up your Walmart seller account and ensure you pass all verification checks.
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Find reliable, vetted suppliers with good product quality and continuity.
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Use a U.S.-based prep/fulfillment center to receive, repackage, and ship on your behalf.
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List products with optimized titles, images, and SEO.
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Monitor orders, maintain stock, and address customer service quickly.
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Optimize over time — scale your best products, drop underperformers, and reinvest.
Final Thoughts
Dropshipping might seem easier at first, but the risk and competition grow fast. If you want a safer, more professional route — especially on Walmart — 2-Step FBM offers the balance of control, trust, and growth that serious sellers need.
If you want help implementing this model for your Walmart or eBay store (or want us to handle it for you), just let me know — we do this every day at EcomAxiom.
