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Why Walmart Wants to Sell More Stuff for $10 and Up

Signage for Walmart.com Los Angeles, California on Sept. 19, 2013. Patrick T. Fallon—Bloomberg via Getty Images

Walmart wants to sell more expensive stuff through its online operation, according to a Reuters report.

Per that report, the company is asking its suppliers to provide more things it can sell at $10 and up. Here’s why.

Walmart wmt has put a lot of money into its e-commerce business, most notably through its $3 billion Jet.com purchase, and its sales are booming—the last quarterly results showed they were up 50%.

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However, Walmart.com is not yet profitable, and a big part of the reason for that can be found in delivery costs. As the operation tries to do battle with Amazon amzn , this will prove to be a crucial factor.

A cheap item costs the same to ship as something the same size and more expensive. So it makes more sense to push on the expensive side, where shipping comprises a smaller proportion of the total cost.

According to Reuters, Walmart e-commerce chief Marc Lore last week told suppliers such as Procter & Gamble, Unilever, and Kimberley-Clark that the online operation wants to be selling things that are worth at least $5, and preferably twice that.

“We are constantly looking for opportunities to expand our assortment with new items, and want to ensure that the items we add to the assortment are a great value but also make economic sense for the channel,” a spokeswoman told Reuters, without offering comment on the meetings themselves.

But a Walmart.com supplier told Reuters that the company has “started to understand it cannot make money if they offer the lowest prices online on every item and then spend $4 or $5 trying to ship it over.”

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