If you’re working in warehousing, distribution, or online retail today, chances are you’ve wondered what the difference is between selling on Walmart and selling on Amazon. These are two of the largest marketplaces in the world, and they both have their advantages and disadvantages. You’ll need to understand the key differences between them, as well as each site’s strengths and weaknesses, to choose the right one to sell on or work with. Here’s what to know.
Benefits of Selling on Walmart
Amazon is the first marketplace that springs to mind when many people think of selling their products online, partnering with an e-commerce distributor, or working in a commercial warehouse. Amazon is enormous, with millions of sellers and customers. It’s also famous for its two-day shipping.
Don’t overlook Walmart, though. It has a lot of advantages over Amazon that are worth considering.
Arguably the biggest benefit of working with Walmart is the lower concentration of sellers. In May 2022, Walmart had approximately 151,000 third-party sellers on its online marketplace.
In comparison, Amazon has over 1.9 million selling partners. When considering selling on Walmart versus Amazon, remember you will have significantly more competition on Amazon. Opting for Walmart allows retailers to be a big fish in a small pond.
Walmart is also ripe for growth in the 2020s. Amazon Prime is today’s juggernaut subscription service, but Walmart is working hard to compete. Walmart’s Prime alternative, Walmart+, hit 32 million subscribers in 2021, with the service growing about five times faster than Amazon Prime. In comparison, Amazon Prime has over 200 million subscribers worldwide.
Amazon Prime might have more subscribers at the moment, but Walmart+ could be one of its biggest competitors in just a few years, based on the current growth rate. If you decide to start working with Walmart now, you can build up your base on Walmart’s marketplace as it grows. Plus, anyone interested in warehousing could be part of an era of major growth if they opted to work at Walmart instead of Amazon.
Additionally, Walmart offers more accessible support for its third-party sellers. It has a more rigorous application process for sellers compared to Amazon. However, once you’re in, there are no monthly or annual fees to sell on the Walmart marketplace. The company simply charges a referral fee for each purchase, based on the product category sold. The highest referral rate Walmart charges is 15% as of 2022.
Opting to use Walmart’s fulfillment service gets sellers access to dedicated support, as well. This includes e-commerce assistance and tools that can be extremely helpful for operating an online retail business.
Benefits of Selling on Amazon
How does Amazon compare? Walmart Marketplace certainly has a lot going for it. However, Amazon’s strengths are a force to be reckoned with. Few retail hubs in the world can compete in terms of sheer reach. As of 2022, Amazon controls nearly 40% of the U.S. e-commerce market. It makes hundreds of billions of dollars a year in sales from hundreds of millions of customers. More than 2 billion people visit Amazon’s site every single month.
Numbers like these are difficult to ignore when considering selling on Walmart vs. Amazon. Although Amazon might have more competition for sellers than Walmart, it is balanced out by the sheer number of customers who visit daily. This is arguably Amazon’s greatest strength. You have a massive potential customer base to draw off on Amazon, and you can be sure that when people are looking for something, they will likely go there first.
Amazon’s requirements to start selling on its marketplace are much more relaxed than Walmart’s. That makes it easier for sellers to start selling on Amazon versus on Walmart.
Plus, the basic individual account for sellers is fairly straightforward and affordable. Amazon charges 99 cents per product sale, and that’s it. There are no extra fees or subscriptions you would need to pay for. Of course, the functionality of this free seller account is limited, but it does win out over Walmart in terms of sheer accessibility for sellers.
Amazon comes out ahead in terms of warehousing, as well. Employees are paid more and report better working conditions than at Walmart. Plus, Amazon’s warehouses are usually more likely to promote from within, offering professionals opportunities for career growth.
Selling on Walmart vs. Amazon: Requirements and Fulfillment
The biggest differences between selling on Walmart versus Amazon are in their seller requirements and fulfillment systems. Both sites have their advantages and disadvantages. However, you may have to choose based on what is or isn’t feasible for your business.
It is more difficult to become a seller on Walmart than on Amazon. Prospective Walmart Marketplace sellers must work through the application process before selling anything. Additional requirements to use the Walmart Fulfillment Service include size and weight restrictions and shipping to WFS from within the contiguous U.S. Once your seller application has been approved, there is no monthly subscription fee for you to use your account on Walmart Marketplace.
Walmart’s fulfillment system is notably different from Amazon’s. Regardless of which fulfillment option sellers choose, Walmart requires all its vendors to track their own inventory for the products they sell.
However, its in-house fulfillment service does come with some key perks. All businesses that use Walmart Fulfillment Services get access to expert e-commerce guidance and support at no extra cost. These services could be a big help to many smaller operations. Additionally, all companies using WFS are automatically eligible for Walmart+ two-day shipping, which is a great perk for customers.
Of course, businesses do need to pay for WFS. Unfortunately, Walmart does not disclose the pricing model for its fulfillment service. However, it is based on the size and weight of items, so you can expect it to be fairly priced for the relative difficulty of shipping certain items.
In comparison, Amazon has more fees to track in its fulfillment system. These include costs for selling on Amazon, Fulfillment by Amazon, long-term storage, and refund administration. If you choose not to use the fulfillment service, you will just have to pay for your product’s referral fee plus the optional monthly cost of a business plan subscription. This provides access to services and features similar to those included for Walmart Marketplace sellers by default.
Amazon is likely to be more expensive than Walmart in terms of fees and fulfillment costs. However, it has minimal requirements for businesses to start selling on its site. Unlike with Walmart, there is no application process. Additionally, the extra cost for shipping and fulfillment on Amazon might be worth it for customers.
Amazon is leading the way in warehouse automation robotics, the technology that allowed it to get so far ahead of the competition. Amazon has automated order processing streamlined to a T. This gives its fulfillment services a level of speed and agility that is difficult to compete with. As with Walmart, Amazon’s fulfillment fees will vary significantly from one business to another.
Finding the Best Online Retail Hub
Figuring out whether you should be selling on Walmart or Amazon can be a tricky process. Ultimately, it comes down to a question of simplicity and reach. Walmart has a stricter application process for sellers but is generally simpler to work with than Amazon. In comparison, Amazon has far more customers, giving businesses a level of reach that Walmart may not be able to compete with.
You always have the option of selling on both platforms. Amazon is already a titan of e-commerce, but Walmart is set to grow significantly in the years ahead, so you’ll be in good hands either way.