Amazon and Walmart are the two most prolific eCommerce marketplaces in the U.S with an enormous amount of monthly visitors. Amazon attracts 2 billion US visits each month, while Walmart receives nearly 400 million. As one of the main Amazon competitors, Walmart also has 350 million visits per month.
For online business owners, having a presence in at least one of these thriving markets is a must. However, it poses a challenge to decide on a suitable selling channel when both retail giants come head to head.
In this article, we’ll be discussing the pros and cons of these two channels and every difference you need to know when selling on Amazon vs Walmart.
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What is Walmart?
Walmart is an American multinational retail corporation that manages a series of hypermarkets (also known as supercenters), discount department stores, and grocery stores.
Its marketplace (Walmart Marketplace) is a well-known online marketplace that is similar to Amazon. By partnering with different third-party sellers, it enables and brings millions of brands and products to online consumers.
When business owners sell with Walmart, they get to popularize their products to one of the largest customer bases in the U.S. The marketplace items will appear in the search results of Walmart.com beside the other products distributed by Walmart.
Pros & cons of selling on Walmart
Pound for pound, these are the key benefits when retailers sell on Walmart vs Amazon.
- No additional seller fee;
- A lot less seller competition;
- A new loyal customer base.
However, you should also be aware of the following drawbacks.
- Limited fulfillment services;
- Frequent bug issues with Walmart Seller Central.
What is Amazon?
The Amazon marketplace is no longer a stranger to eCommerce sellers when it comes to doing online business. It allows third-party sellers to list and sell new and used items by connecting them to Amazon’s worldwide customer base.
When selling on Amazon vs Walmart, retailers can gain access to the world’s most potential online market. With over 12 million products sold each year, it’s without question that no sellers should stay out of this Amazon race.
Pros & cons of selling on Amazon
Some prominent advantages of selling on Amazon include
- More traffic and potentially higher sales;
- Great gateway for expanding to international markets;
- A more established fulfillment center.
Nevertheless, it also has some disadvantages as follows
- Higher competition;
- More types of fees (i.e pro account fee, selling fee, etc.).
Selling on Walmart vs Amazon: Break Down Key Differences
Regardless, it’s hard to tell which one is a profitable choice for your business without going into details. To make a well-informed decision, you’ll be learning all the ins and outs of key differences between these two giant retailers.
So, Amazon or Walmart? Let’s weigh up Amazon and Walmart.
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Walmart vs Amazon: Selling fees
When selling on Amazon vs Walmart, you will both have to pay 3 types of fees – product sales fees, fulfillment fees, and storage fees.
Selling on Walmart fees
How much does it cost to sell on Walmart? Unlike Amazon, you don’t have to pay an account fee when you sell products on Walmart marketplace. Signing up for a seller account is free and you receive unlimited access to listings and categories.
In terms of sales fees, you have to pay Walmart selling fees when having items sold via the marketplace. It is also known as the product referral fee. Depending on the product categories, the amount ranges from 6% to 20% of the selling price.
For fulfillment, you can either self-fulfill your order or use Walmart’s fulfillment service (Walmart WFS). Walmart Marketplace sets transparent requirements for maximum product package sizes and weights for products sent to its fulfillment center.
Cost per Unit
Less than or equals 1 lb
Less than or equals 2 lbs
Less than or equals 3 lbs
Less than or equals 4 lbs and up to 20 lbs
$5.75 + $0.40 per an additional lb
Greater than 20 lbs (up to 30 lbs max)
An additional $3.00 to the above fee
The last bill on the list is the storage fee. Walmart storage fees vary between two periods: From Q1 to Q3, and Q4. Overall, Walmart charges the same amount as Amazon does from Q1 through Q3, but less than Amazon does during Q4.
January – September (Q1 – Q3)
$0.75/cubic foot monthly
October – December (Q4)
- $0.75/cubic foot monthly for storing items within 30 days
- An additional $1.50/cubic foot monthly (total: $2.25/cubic foot per month) for storing items for more than 30 days
Selling on Amazon fees
When weighing selling on Amazon vs Walmart, Amazon owns a more complex fee system with all kinds of fees.
Selling on Amazon prices include
- Account fees. There are two seller plans: Individual plan and Professional plan. You pay $0.99 for each item sold on an Individual plan. With a professional plan, you must pay a monthly amount of $39.99.
- Sales fee. Amazon sales fees include a per-item fee, referral fee, closing fee, and high-volume fee. The platform charges the same for both account plans. You must foot the bill for 6%-45% of the selling price for the product referral fee, $1.80 per media item for the closing fee, and $0.005 on items over 100,000 in listing volumes.
- Amazon FBA fees. Three criteria for deciding the cost of Amazon fulfillment service (FBA) are the Size tier, Max dimensions, and Unit weight. The platform sets specific rules for different products and categories (i.e non-apparel, special oversize, etc.). You can see more details on Amazon’s pricing page to have a rough cost estimation.
- Storage expense. Amazon’s storage fee per cubic square foot is $0.69 per month for Q1-Q3 and $2.40 per month for Q4.
>>> Verdict: If you are on a tight budget for your business operation, Walmart might a better choice with much less cost and expense. However, you might not make as much on Walmart vs Amazon when Walmart site visits are nowhere near that of Amazon.
Walmart vs Amazon: Ease-of-use
In the matter of onboarding and listings, we’ll see how each platform is for beginners to start selling.
In the battle of Walmart marketplace vs Amazon, Walmart is not a beginner-friendly platform. New sellers must apply to establish a business at Walmart. Applications will undergo a “trust and safety” review, and only when they are approved that business owners can start selling.
Here is the list of qualifications and documents you have to prepare for Walmart marketplace reviews.
- US Business Tax ID (not accept SSN);
- W9 or W8 and EIN Verification Letter from the Department of Treasury verifying your US business address or physical operation place;
- US Business address or physical operation place;
- A plan for integration methods of your product catalog (i.e bulk upload, API, solution provider, etc.);
- Primary product categories, catalog size, and related information (i.e. total SKUs with verified UPC information of products you’ll be selling on Walmart, used goods, refurbished, etc.).
For the time being, Walmart is only accepting US applications, not international ones. Even when Walmart approves your business profile, you still have to follow a launch checklist to register your company.
Walmart’s API is underdeveloped while its seller center often experiences bug issues. This is a real challenge for inexperienced sellers who are looking to start up.
Meanwhile, Amazon offers a seamless onboarding experience for beginners. Once purchasing a seller plan, you can start listing and selling a variety of products.
However, one thing to note is Amazon’s listing requirements and criteria. Most product categories on Amazon require a standard ID (i.e Universal Product Code – UPC, European Article Number – EAN, International Standard Book Number – ISBN, etc.). In case your product categories already exist on Amazon, you don’t have to provide GTIN.
Amazon listing management is constantly changing which can become an issue in major sales seasons. For example, Amazon revamped its shoe sizing requirements with little notice in 2019. Sellers unable to keep up with such changes face the risk of having their ASINs removed.
For seller registration completion, you have to prepare the following:
- Bank account number and bank routing number;
- Chargeable credit card;
- A national ID
- Tax information (SSN accepted);
- A national phone number.
Unlike Walmart, international sellers (from certain countries) can register to sell on Amazon.
>>> Verdict: Amazon wins this round when it comes to the ease of selling. The marketplace is also available to international sellers desiring to scale their business to other markets.
Walmart vs Amazon: Shipping & fulfillment services
When selling on Amazon vs Walmart, you always have two options for shipping and fulfillment services.
Walmart fulfillment services
The Walmart marketplace provides sellers with two fulfillment choices: Walmart Fulfillment Services (WFS) and Self-fulfillment. However, Walmart Fulfillment Services (WFS) is only available to established sellers.
If you are fresh on the platform, you can only fulfill on your own. Nevertheless, you can not have branding packaging or include marketing materials. For this reason, Walmart bans sellers from using Amazon Multi-Channel Fulfillment (MCF).
The platform does not acknowledge Amazon Logistics codes as valid tracking codes. If it catches you using Amazon Logistics codes, your account will receive a suspension.
As an effort to rival Amazon Prime, Walmart launched a loyalty program – Walmart+. Sellers joining the program receive free, unlimited same-day shipping on all groceries and other perks including a scan-and-go service for in-store shoppers.
Walmart also puts forward free two-day shipping for all orders over $35. You don’t have to be a member of the marketplace to access this beneficial incentive.
Amazon fulfillment center
There are two methods for fulfillment on Amazon. You can either go for Fulfillment by Amazon (FBA) or choose to fulfill on your own.
With the Amazon fulfillment center, Amazon allows brands to send inventory ahead for future orders. In the Amazon warehouse, the staff will be responsible for picking up, packaging, and shipping out orders on your behalf.
FBA sellers receive an Amazon Prime badge on their profile and enjoy better visibility in Amazon’s product search results.
The marketplace will also take care of returns, refunds, and customer support. It’s a great benefit for small and inexperienced business owners. However, it might be restrictive for well-established brands expecting to control services and return policies.
Sellers desiring to fulfill orders on their own can opt for Amazon Fulfilled by Merchant. Amazon offers a signing-up option to Seller-Fulfilled Prime (Amazon Prime Badge included) without having to be an FBA seller. However, you must have a consistent record of on-time deliveries and exceptional customer satisfaction to register for the program.
>>> Verdict: Walmart’s shipping and fulfillment services might be stricter in requirements than that of Amazon. However, if you are a US seller, you can enjoy Walmart’s fast delivery program without having a membership to the platform.
Walmart vs Amazon: Competitiveness
Despite being a less competent rival in terms of Amazon vs Walmart online sales, Walmart marketplace creates a less competitive environment for sellers.
Registration for the Walmart marketplace is much more complex and it’s not unusual that the platform declines seller applications. It also doesn’t allow dropshipping to run in the marketplace.
Walmart’s steep registration barriers make for a far less combative market, and thus, there is a lot more growth opportunity for product exposure.
With 2.4 million active sellers worldwide, Amazon occupies a huge share of the eCommerce market. Being the largest marketplace for online selling and buying activities, it offers sellers a higher potential for conversions.
However, such a massive number of sellers also suggests a more saturated market. Sellers may face more challenges in making their products stand out without resorting to listing promotions.
Most brands need to invest in Amazon advertising listings to succeed when organic search visibility is consistently decreasing.
Walmart vs Amazon: Branding & Advertising
As a thriving traditional retailer, Walmart is better known for all the brands it carries. Once presenting your brand on Walmart, there’s a higher chance that your business will gain a better branding impression.
In terms of IP infringement concerns, Walmart’s application process helps reduce infringement cases with rigorous requirements of ownership proof, experience, and other qualifications.
Walmart is also far less saturated with promotions than Amazon. According to Teikametrics, only 1.6% of its sellers currently advertise which indicates a lower CPC across the platform. However, with a first-price auction approach, Walmart ads may be trickier to manage.
With a high level of competition, Amazon sellers have to invest more effort in branding activities and advertising to stand out to consumers.
Regarding branding activities, sellers can establish a good reputation with buyers by maintaining high seller and product ratings. This is also the first thing buyers see when browsing seller profiles.
Sellers also have to make a positive impression on Amazon by meeting Amazon’s performance standards. Sellers failing to meet these performance standards may risk having their selling privileges removed by Amazon.
For advertising programs, Amazon offers more paid search and ad options than any other marketplace site. The platform provides a pay-per-click system to attract buyers at every stage of the buying cycle.
>>> Verdict: All in all, it boils down to market size and business budgets that each platform stands as the first choice for sellers. Walmart might be appealing to sellers looking to build a strong brand while Amazon offers more opportunities for profit growth.
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Selling on Walmart vs Amazon: FAQs
- Is selling on Walmart profitable?
95% of Walmart Marketplace vendors own profitable online stores. 73% of Walmart Marketplace vendors make profit margins of more than 20%, and more than half earn more than $100,000 per year.
- Can you sell on both Amazon and Walmart?
In fact, merchants don’t have to pick between Amazon and Walmart—they can sell on both! Indeed, 12% of current Amazon sellers are interested in expanding their eCommerce brands to Walmart in 2021.
- Which is better Amazon or Walmart?
Walmart wins the prize for low-cost grocery shopping and fresh groceries delivery. Amazon is the ideal marketplace to go for if you want a wider selection of items (including handcrafted artisanal goods), as well as a profusion of streaming services and Whole Foods Market bargains.
Amazon continues to dominate the eCommerce industry and is set to do so in the near future. However, Walmart is also catching up with various programs for sellers on their marketplace.
You might find Amazon more user-friendly than Walmart, but if you are a registered US business, there’s no reason you shouldn’t sell on Walmart. Don’t put all your eggs in one basket, as the expression goes!