Walmart says it will work with third-party sellers to make millions of items available for free two-day shipping on orders over $35.
The company is also simplifying the returns process for eligible products bought from marketplace sellers. That includes allowing shoppers to return the items at any one of its 4,700 stores.
Previously, only select items were eligible for free two-day shipping.
Walmart will begin to roll out the improvements in mid-November as it seeks to better compete with online leader Amazon ahead of the holidays.
Amazon already allows its sellers to offer free two-day shipping. Last year, more than half the items sold on Amazon were from third-party sellers.
Walmart doesn't break out how many third-party sellers it has, but its website sells 75 million items from them.