HomeDepot & Lowe's Halt Onboarding New Vendors Into Their Marketplaces?

By Alan Luusama Lee

From my contact sources, HomeDepot & Lowe’s marketplaces have both recently tightened their onboarding new vendors, especially in their indoor furniture category, which experiences a severe competition among furniture 3P sellers within the marketplace.

Normally, the typical process for onboarding a new vendor or supplier can take months. It may sound like a long and annoying process. There are many internal requirements that a supplier who needs to complying with.

Vendor onboarding is the process of collecting necessary information from suppliers used for procurement to set them up as approved sellers with your company. This process aims to help you do business together, buy goods and services and make payments to vendors.

According to my past experience of working over hundred different product lines and projects with retailers, the first thing that HomeDepot and Lowe’s buyers would like to check on is their sales, product reviews, & store ratings on Amazon. This would give buyers insight how the end-customers respond to the product in the market. Also, buyers can get an idea of the product sales history such as how much product could possibly be sold in one week, one months, three months, and even six months. These important data will determine if the retailers would consider to take the products into their marketplaces.

However, there is another factor that the retailers would take into consideration. Like Amazon & eBay, the retailers limit the number of sellers in their certain categories within their marketplaces. It makes sense that the retailers would not let over 100 different treadmill brands flushing into their marketplaces, causing confusion and chaos. Instead, the retailers would pick the best of the brands into their categories for better customer purchasing experience. When the category is full with similar products with different brands and sellers, the retailers would start limiting onboarding new vendors. This does make a business sense.

Since the start of its online marketplace, HomeDepot had onboarded numerous vendors and 3P sellers into the marketplace. There is no accurate data of how many of them HomeDepot and Lowe’s had onboarded so far, but it would be a good time for the retailers to reorganize and reexamine certain categories for better organization and structure.