Selling on Walmart vs. Amazon: Which Marketplace is Better?
While Amazon is well ahead of the Walmart marketplace in terms of both traffic and revenue, this doesn’t necessarily mean it’s a better platform for your brand. When it comes to selling on Walmart vs. Amazon, both sites offer pros and cons.
However, with almost half of Americans beginning their product searches on online marketplaces, brands should ensure they have a presence on at least one of them. So here’s our guide to selling on Walmart vs. Amazon.
Back in 1994, Amazon began selling books online. Today, it is the world’s biggest eCommerce store and sells everything from foodstuffs through to autoparts.
Amazon’s efficient fulfillment and customer-friendly policies have contributed to its massive popularity and access to its huge customer base is open to businesses of every size.
The Amazon marketplace offers sellers a range of fulfillment options. First off, there’s Fulfillment by Amazon (FBA). This full-service fulfillment programme allows brands to send their inventory to Amazon where its staff will pick, package and ship out orders on your behalf.
Returns, refunds and customer support are taken care of too, which is hugely beneficial for small sellers. However, this can prove restrictive for bigger brands that may prefer to control their own service and returns policies.
On the other hand, FBA sellers can display the Amazon Prime badge and enjoy better visibility in Amazon’s search results.
Sellers who prefer to fulfill their own orders can do this with Amazon Fulfilled by Merchant. Alternatively, they can sign up to Seller-Fulfilled Prime which offers access to the Amazon Prime badge without being an FBA seller. However, brands need to have an impeccable track record of on-time deliveries and exceptional customer satisfaction to access this option.
It’s also worth noting that brands can supply wholesale stock directly to Amazon, but this option isn’t available to everyone. You need to be invited by Amazon.
The costs associated with Amazon depends on the type of products you sell and the fulfillment option you choose.
All sellers have to pay:
- A subscription fee: A Professional Seller subscription costs $39.99 a month.
- Referral fees: Once a product is sold, sellers will be charged between 6% and 45% of the final sale price.
- Closing fees: Media products, like books and DVDs, are also charged a flat fee of $1.80.
- Processing fees: Sellers have to pay $5.00 or 20% of an item’s sale price every time Amazon issues a refund.
Sellers that sign up to FBA services also have to pay:
- Fulfillment fees: Costs vary depending on the weight and size of each product.
- Returns fees: FBA sellers have to pay a weight-based fee for each item returned to Amazon.
- Monthly storage fees: This usually costs 83c per cubic foot, but jumps to $2.40 in Q4.
- Long-term storage fees: When inventory is stored at Amazon for too long, sellers have to pay an additional $6.90 per cubic foot.
With the Amazon marketplace, brands gain access to a huge audience. This opens up valuable sales opportunities and, with 38% of shoppers starting their product searches on Amazon, it can even boost your D2C and in-store sales.
However, competition on the platform is extremely stiff. Sellers need to compete with big brands, small businesses and dropshippers. Although it’s worth noting that brands now have access to exclusive marketing tools to help them stand apart from other sellers. These include Amazon Analytics, A+ Content and Storefronts.
Most brands will also need to invest in Amazon advertising to succeed, because the visibility of organic search results is consistently decreasing. Another drawback is that sellers can find it difficult to get support.
For first-party vendors, working with Amazon can also be difficult. Its price-matching policy means that if your products appear on another site for less, Amazon will automatically lower your pricing.
Walmart has been around since the 1960s, but it didn’t begin its online operations until 2009. Since then, Walmart’s sales have surpassed eBay’s and, in 2021, it was growing five times faster than Amazon.
Brands selling on Walmart can take advantage of fulfillment services similar to Amazon’s FBA. The only difference is that Walmart Fulfillment Services only accept shipments to its centres from within the US.
Its maximum package weights and sizes are also much smaller than Amazon’s, which won’t work for sellers of bulky items. Walmart, for example, allows packages up to 30 pounds, while Amazon maxes out at 150.
However, the Walmart marketplace also has a unique fulfillment option that allows sellers to store and ship their own inventory, while Walmart’s team handles listings, pricing and content. Amazon doesn’t have a similar service.
Selling on Walmart doesn’t involve any monthly subscription fees or return processing fees. After signing up, sellers simply pay a referral fee whenever a product is sold.
- Referral fees: Sellers pay between 6% and 20% on each sale, depending on the type of product sold.
Sellers that sign up to Walmart Fulfillment Services will also have to pay:
- Fulfillment fees: Like Amazon, these vary based on the weight and size of each item.
- Monthly storage fees: At 75c per cubic foot, Walmart’s storage fees are lower than Amazon’s. The Walmart marketplace only charges extra in Q4 if products have been stored for over 30 days. Then, it charges an extra $1.50.
- Long-term storage fees: After 12 months, Walmart will charge $7.50 per cubic foot to store slow-moving stock.
For international brands and sellers of bulky items, Amazon and its FBA services beat out Walmart. Signing up to the Walmart marketplace is also more complex and it’s not unusual for applicants to be turned away. Dropshippers won’t be accepted, for example.
However, once you get set up, Walmart Seller Central is simple to use and you’ll receive excellent same-day support. When selling on Walmart, you’ll also have less competition to deal with.
Walmart’s lower fees are definitely a big positive. This can cushion the negative impacts of its pricing rules. To keep prices low and please customers, Walmart automatically unpublishes listings that it believes are unfairly priced.
Walmart Seller Central is also working hard to catch up with Amazon in other areas. Walmart Advertising and Walmart Connect offer high quality advertising options to sellers, while its Walmart+ programme now has 32 million subscribers – compared to Amazon’s 126 million.
With marketplaces sucking up 40% of all online sales, it’s essential for brands to have a presence on at least some of these third-party platforms. Here are three tips to help you manage your marketplace presence.
Use Where to Buy technology
Implementing Where to Buy technology can help brands facilitate and track the omnichannel experiences of their visitors. It streamlines the path to purchase by directing shoppers to their favourite marketplaces to convert. Not only will this increase conversions, but it will also allow you to track consumer journeys across multiple channels and gather valuable basket-level data.
Implement Digital Shelf tools
Multichannel management can be tricky. However, with the help of a Digital Shelf solution, you can view all of your marketplace search placements, rating and reviews, inventory levels and content in one simple dashboard.
Repricers use smart technology to adjust your marketplace pricing in a way that maximises both sales and profit margins. On Amazon, this will help you win the elusive Buy Box and boost visibility. While selling on Walmart, it will help you adhere to the platform’s pricing rules.
When it comes to selling on Walmart vs. Amazon, the best choice depends on your products, business model and warehouse locations. But it’s a good idea to be present on both the biggest online marketplace and the fastest growing one.