Walmart vs Amazon: The Comparison Showdown for Sellers
In the world of e-commerce, Amazon and Walmart reign supreme, dominating the retail landscape. These two giants offer vast opportunities for third-party sellers looking to expand their business. But with such similar offerings, how do you decide which platform is the right fit for you?
In this blog, we’ll dive deep into the world of Walmart vs. Amazon, comparing them on key factors like fulfillment, costs, branding, and international opportunities. Whether you’re a seasoned seller or just starting out, this comparison will help you make an informed decision about where to sell your products online.
Overview of Amazon vs. Walmart
Amazon and Walmart are two of the largest e-commerce marketplaces in the US, commanding a combined market share of over 70%. Amazon leads the pack with a market share of around 40%, while Walmart follows as the second-largest, holding approximately 10%. Each platform has its unique strengths and weaknesses, and understanding these differences is crucial for sellers aiming to make informed decisions about where to list their products.
Amazon is renowned for its vast customer base, boasting over 300 million active customers worldwide. The platform offers a plethora of tools and services to help sellers manage their businesses effectively. Amazon’s Seller Central is a comprehensive dashboard that provides detailed sales data and analytics, empowering sellers with insights to optimize their strategies. Additionally, Amazon offers various fulfillment options, including the popular Fulfillment by Amazon (FBA) service, which allows sellers to store their products in Amazon’s warehouses and have them shipped directly to customers.
On the other hand, Walmart is celebrated for its everyday low prices and its formidable presence in the retail industry. With over 140 million customers visiting its stores weekly, Walmart has a substantial and loyal customer base. The Walmart Marketplace is rapidly expanding, currently featuring over 150,000 sellers. Walmart provides a range of tools and services to assist sellers, including Walmart’s Seller Center, which offers detailed sales data and analytics similar to Amazon’s Seller Central.
Let’s compare both platforms on some of the most important parameters for sellers planning to sell online.
1. Seller Requirements
Amazon
Amazon requires a professional seller account, which comes with a monthly fee of $39.99. While there is an individual seller plan with no monthly fee, it has limitations on the number of products you can list and other features.
Amazon places high importance on seller performance. You must maintain a low late shipment rate and a high valid tracking rate. Failure to meet these standards can result in penalties or account suspension. Managing metrics such as credit card chargebacks is also crucial for maintaining account health and preventing account suspension due to customer dissatisfaction. Here are a few other details that you’ll need to setup a store on Amazon.
Business name
Bank account number where Amazon can send sales proceeds
Address
Phone Number
Contact information
Internationally chargeable credit card
Tax identify information
Walmart Marketplace
US Business tax ID or business license number (SSN isn’t accepted)
US business address
Address of physical operations
W9 or W8 and EIN Verification Letter from the Department of Treasury
Walmart has a more stringent vetting process for new sellers. You may need to provide proof of your supply chain and operational capability before being approved. This rigorous vetting process ensures seller stability, which is crucial for maintaining a reliable selling environment with clear and consistent policy enforcement.
No monthly subscription fees, but sellers pay additional fees based on sales.
Sellers must maintain high order accuracy potential and order defect rate.
2. Platform Costs and Monthly Subscription Fees
Amazon
Professional Seller Account: $39.99 monthly fee
Referral Fees: Typically range from 8% to 15% of the item’s sale price.
Closing Fees: $1.80 for media products.
Refund Processing Fees: $5.00 or 20% of the item’s price.
Weight-Based Returns Fee: Varies based on the weight of the returned item.
Storage Fees:
83 cents per cubic foot monthly storage.
$6.90 per cubic foot for long-term storage.
Fulfillment Fees: Depend on the item’s size, weight, and shipping method.
Walmart
No Monthly Seller Fees
Referral Fees: Typically range from 8% to 15% of the item’s sale price.
Storage Fees:
75 cents per cubic foot monthly storage.
$1.50 per cubic foot extra fee for items stored beyond 30 days.
$7.50 per cubic foot for long-term storage.
Fulfillment Fees: Vary per item size and weight.
In general, Walmart’s Marketplace tends to have lower selling costs, but Amazon makes up for its higher fees by providing more tools for shoppers and sellers alike.
3. Fulfillment and Shipping Options
Fulfillment and shipping are crucial aspects of e-commerce, and both Amazon and Walmart offer various options to help sellers manage these processes efficiently.
Amazon FBA
Amazon’s FBA program is a popular choice for sellers. It offers a comprehensive solution, taking care of storage, picking, packing, shipping, and customer service. Sellers send their products to Amazon fulfillment centers, and Amazon handles the rest. This can be especially beneficial for sellers who want to focus on product sourcing and marketing.
Walmart Fulfillment Services (WFS)
Walmart’s WFS is a newer service that offers similar benefits to FBA. Sellers can send their products to Walmart fulfillment centers, and Walmart will handle storage, picking, packing, and shipping. WFS is still expanding, but it has the potential to become a strong competitor to FBA.
Both platforms offer fulfillment services, but Amazon vs Walmart differs in their approach to shipping, fees, and storage.
Self-Fulfillment
For sellers who prefer to handle fulfillment themselves, both Amazon and Walmart offer self-fulfillment options. This means that sellers are responsible for storing, packing, and shipping their products. While self-fulfillment can provide more control over the process, it also requires more time and resources.
4. Onboarding Process and Seller Tools
Amazon
Amazon’s onboarding process is straightforward, and its Seller Central dashboard offers a wide range of tools for managing sales, listings, and advertising. Amazon’s Seller Central provides a comprehensive dashboard that allows sellers to control pricing, manage listings, and access various analytics tools. Additionally, Amazon supports bulk product uploads, making it ideal for sellers with large inventories.
Walmart
Walmart’s Marketplace onboarding is more selective, focusing on larger, well-established brands. While the platform provides various seller tools to optimize sales, they are not as robust as Amazon’s system.
5. Pricing and Buy Box Competition
Pricing and Buy Box competition are pivotal factors for sellers on both Amazon and Walmart. The Buy Box, prominently displayed on the right-hand side of the product detail page, contains the “Add to Cart” button and is a critical driver of sales and visibility. Winning the Buy Box can significantly boost a seller’s sales, making it a coveted spot.
Amazon’s pricing algorithm is intricate, considering various factors such as the seller’s price, shipping cost, and customer reviews. To stay competitive, sellers must vigilantly monitor their prices and adjust them regularly. Amazon provides several pricing tools, including the Amazon Pricing Dashboard, which offers detailed pricing data and analytics to help sellers make informed decisions.
Similarly, Walmart’s pricing algorithm is complex, taking into account factors like the seller’s price, shipping cost, and customer reviews. Walmart also offers a range of pricing tools, including the Walmart Pricing Dashboard, which provides comprehensive pricing data and analytics. However, Walmart’s pricing rules are more stringent than Amazon’s, requiring sellers to be cautious to avoid violations.
6. Advertising
Amazon's Advertising Platform
Amazon’s advertising platform is vast and comprehensive, offering a variety of options for sellers. At the core of Amazon’s advertising is Sponsored Products, which allows sellers to bid on keywords relevant to their products and appear in search results. Amazon also offers Sponsored Brands for brand awareness, Sponsored Display for retargeting customers, and Product Display Ads for showcasing complementary products. Amazon’s advertising platform is highly integrated with its search engine, making it easier for sellers to target relevant customers.
Walmart's Advertising Platform
Walmart’s advertising capabilities are growing, but they are still somewhat limited compared to Amazon. Walmart offers Sponsored Products, similar to Amazon, allowing sellers to bid on keywords and appear in search results. However, Walmart’s advertising platform is less mature and doesn’t offer the same breadth of options as Amazon.
7. International Sellers
Both Amazon and Walmart have become attractive platforms for non-US sellers aiming to access the American market. On Amazon, international sellers make up a substantial 52% of top third-party merchants. Walmart, too, has seen a surge in foreign sellers, with 43% of its new sellers coming from outside the US—primarily from China in both cases.
To sell on Amazon, non-US residents need to fulfill specific legal requirements like US taxpayer status, a supported country bank account, and often incorporation within the US. Many choose to set up a local US entity to simplify banking and compliance.
Walmart allows incorporation either in the US or in one of the 14 eligible countries, and while a US taxpayer ID isn’t required, you do need a US phone number and a return address. You can also use the W-8BEN-E tax form for taxation purposes.
For US-based sellers wanting to go international, Amazon Global allows shipping to over 100 countries, or sellers can create stores on Amazon’s various international marketplaces. Walmart, on the other hand, is limited to US shipments only and does not offer any international shipping options.
8. Customer Support and Performance Standards
Amazon
Amazon’s performance standards include maintaining low order defects and late shipment rates. Failing to meet these can lead to account suspension. Managing metrics such as credit card chargebacks is also crucial for maintaining account health and preventing account suspension due to customer dissatisfaction.
Amazon customers tend to expect faster delivery times, especially Prime members, which puts additional pressure on sellers.
Walmart
Walmart customers are often more price-sensitive, and Walmart holds its sellers to high standards, focusing on order accuracy and a smooth e-commerce experience.
Performance standards on Walmart are stringent but often more manageable for new sellers compared to Amazon. Marketplace sellers must meet specific performance metrics and customer service standards to maintain their accounts and ensure customer satisfaction.
9. Pros and Cons of Selling on Amazon vs. Walmart
Amazon
Pros:
Amazon reigns supreme in the e-commerce world with a vast consumer base.
Amazon FBA (Fulfillment by Amazon) makes shipping and storage a breeze.
Access to Prime members, who are known for their higher spending habits.
Diverse product categories, from groceries to general merchandise.
Cons:
High seller fees, including referral fees and fulfillment fees.
Intense competition from many sellers.
Risk of account suspension for even minor infractions.
High order defect rate can lead to negative feedback and seller instability.
Unauthorized sellers may violate MAP by advertising products at a lower price, and Amazon’s price-matching policy can automatically lower your price if a competitor lists a lower price, creating a challenging pricing environment.
Walmart
Pros:
Walmart Marketplace is rapidly growing with less competition compared to Amazon.
Lower monthly subscription fees for sellers.
Access to Walmart customers, many of whom are loyal to the brand’s low-cost reputation.
Walmart Fulfillment Services (WFS) offers a cost-efficient solution for shipping and storage.
Cons:
Unlike Amazon, Walmart lacks the international reach.
Seller account setup can be slower and more complicated.
Limited customer support tools compared to Amazon’s Seller Central.
Conclusion
When comparing Walmart and Amazon, each platform has its advantages and challenges. Amazon boasts a vast marketplace with global reach and advanced seller tools, but it comes with fierce competition and higher fees. In contrast, Walmart offers a growing platform with less competition and lower fees, though its international presence is more limited, and the onboarding process can be more complex. Both platforms aim to provide products at competitive prices.
For sellers aiming to stay competitive in the retail landscape, understanding the intricacies of both platforms is crucial. Whether you prioritize cost-efficiency, fulfillment options, or global reach, choosing between Amazon and Walmart’s marketplace ultimately depends on your business goals.
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