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Amazon is still the dominant US e-commerce platform with approximately 40% market share. Meanwhile, Walmart is a far second at less than 10% of the market share. However, it’s growing faster than Amazon in the past five years.
For sellers who want to expand their customer base, Walmart seems to be the next logical choice. But how does it compare with Amazon? Are the fees worth it, and should you invest your time in it? In this article, we compare Amazon vs. Walmart and provide the essential details you need to know.
Overview of Amazon vs. Walmart
Walmart is a retail industry giant with a strong footprint across the US. It’s the fastest-growing e-commerce platform, and it’s enjoying a 66% increase in the number of registered sellers in one year. Previously, Walmart was limited to US-based sellers, but it expanded to include international sellers and now has over 150,000 sellers.
However, this number is significantly lower than the 2+ million Amazon US sellers responsible for shipping a staggering 4.1 billion items worldwide. Amazon still reigns supreme, but the fierce competition is driving sellers to look for alternatives.
Walmart has introduced several useful features in its platform, making it a worthy contender for Amazon. It has the same seller tools responsible for running ads, registering a brand, and analyzing store performance. It also has Walmart Fulfilment Service (WFS), a rival to Amazon FBA that offers quick two-day shipping.
However, Walmart only serves the US market. Merchants who want to tap international markets should stick to Amazon and explore its International Marketplaces instead.
Pros and Cons of Selling on Amazon
Pros:
Cons:
The biggest advantage of selling on Amazon is the huge market potential. You can reach millions of customers worldwide since Amazon ships to over 100 countries through Amazon International Shipping. Consumers are also treating Amazon as a search engine by using it to search for product solutions to their problems.
Even if you’re an unknown brand, you can become a successful Amazon seller by optimizing your product listings and observing Amazon SEO practices. You can also use Amazon-exclusive marketing tools like Amazon Analytics and A+ Content.
However, Amazon is highly competitive. Sellers compete with big and small brands, as well as drop shippers. The platform also has a price-matching policy where they’ll automatically lower your price when your product has a lower price on another site.
Pros and Cons of Selling on Walmart
Pros:
Cons:
Compared to Amazon Seller Central, Walmart Seller Central is simpler to use. You can quickly navigate it to find the features you need to manage your listings. They also offer excellent seller support, which you can call anytime you encounter an issue.
You don’t have to worry about competition at Walmart. It only has 150,000 sellers and 100,000 active sellers compared to millions of third-party sellers on Amazon. That’s because of Walmart’s complex and stringent application process, which involves carefully vetting sellers before accepting them to the platform.
Still, Walmart is worth considering because it charges lower seller fees. This helps counter the negative impact of its pricing rules, where Walmart automatically unpublishes listings it believes are priced unfairly.
Seller Requirements
Amazon and Walmart have high standards for their sellers. To qualify, you must meet the following requirements:
Amazon
Walmart
Inexperienced sellers can easily join Amazon. Anyone can sign up for a Seller Account and list their products as long as they meet the requirements above. In contrast, only experienced merchants can sell at Walmart.
You need a registered business in a US state and a US Business Tax ID before you can start listing products on Walmart. For Amazon, you only need an SSN, which is easier to obtain.
If you’re new to e-commerce, it’s better to stick to Amazon. You’ll quickly gain experience and grow your business. However, if you have an established business, consider signing up to Walmart. You’d experience less competition than Amazon and receive more visitors to your listings.
Platform Costs
Amazon
Walmart
Amazon offers two selling plans. The individual account only charges 99c per sale and is free to maintain. However, you don’t have access to advanced seller features like PPC advertisements and the Buy Box. Serious sellers should get the Professional Plan, which costs $39.99 monthly.
Meanwhile, selling on Walmart is free. You don’t have to pay any monthly subscription fees, which makes it ideal to test your products’ performance on the platform. Walmart only charges a referral percentage, which is mostly the same as Amazon’s referral fee per sale.
Both Amazon and Walmart offer a fulfillment and storage service for additional fees. In general, the fees vary depending on the item’s weight and size. Walmart charges $3.45 for Standard Shipping for items less than 1lb. Amazon’s charges are lower. A small standard low-price FBA non-apparel shipment that’s 2 oz or less only costs $2.29.
Fulfillment and Shipping Options
Amazon
Walmart
Both Amazon and Walmart guarantee customers two-day shipping. Amazon customers can enjoy this benefit as Prime members. Meanwhile, Walmart customers can enjoy the same fast shipping even without a Walmart+ Membership, provided their orders are less than $35. Since Walmart has local stores, they can also offer free same-day shipping for items from a local Walmart.
Amazon and Walmart also offer a fulfillment service where they’ll pick, pack, and ship your customers’ orders for a minimal fee. When it comes to packaging sizes, Walmart isn’t designed for bulky items. Its maximum package weight and sizes are smaller than those of Amazon. Merchants selling bulky items must think twice before listing on Walmart.
Both Walmart and Amazon allow self-fulfillment of orders. For Walmart, you have to meet strict performance standards before you can apply this fulfillment method. For example, you have to be a marketplace seller for at least 90 days. You also can’t include any branded or independent marketing materials in the packaging and won’t be able to use Amazon’s Multi-Channel Fulfillment.
Onboarding Process
Amazon
Walmart
When it comes to seller onboarding, Walmart and Amazon are starkly different. Anyone can sign up for Amazon’s selling plans and be accepted as long as they meet the requirements. Walmart has an added step called a trust and safety review. It’s a comprehensive assessment of your marketplace experience, professionalism, and qualifications. Only those who pass this assessment can become Walmart Marketplace Merchants.
Once you’re accepted, you can now list your products. Amazon makes this convenient using various options.
Walmart also gives you three options for product listing.
On both platforms, you must optimize your listing to improve its discoverability. A good listing should also convert browsers into shoppers. Walmart offers a powerful Listing Quality Dashboard that provides helpful insights like discoverability, ratings, and post-purchase quality.
Branding and Advertising Opportunities
Amazon
Walmart
The majority of Amazon customers search for a generic term, such as “running shoes” and “women’s swimsuit.” It’s rare for a search term to contain a brand name. For brands, this means spending on advertising to drive brand awareness. As a result, Amazon’s advertising revenue continues to grow, peaking at $14 billion for Q3 2024 alone.
Walmart has less advertising competition at the moment. Its ad revenue for the entire 2023 was only $3.4 billion. However, it’s 28% higher than the previous year. This means that advertising competition at Walmart is bound to get tougher.
Walmart ads can be trickier to manage since you’re required to have a $1,000 minimum monthly ad spend (for self-serve campaigns) or $25,000 monthly ad spend (for managed campaigns). Amazon only has a $10 minimum daily budget, but it’s recommended that you spend 10% to 15% of your projected revenues on ads.
Both platforms offer a brand registry tool that helps merchants protect their brands against copyright infringements. You just need to provide proof of ownership and meet their other requirements. Using this brand tool also opens access to other enhanced product listing tools.
Seller Tools
Amazon
Walmart
Amazon and Walmart know how crucial analytics is in measuring your store’s performance. They included sales dashboards, business reports, and other analytics tools for their respective seller centers. You can use these tools to track sales, optimize operations, and monitor customer satisfaction.
Walmart and Amazon also enable customization of your storefront. You can add your logo, banner, or company description and enhance product listings with high-quality media. Both marketplaces offer marketing tools like sponsored ads to increase your product’s visibility.
If you’re a brand-registered seller on Amazon, you can further optimize your listings using A+ Content, which consists of feature images, infographics, and other unique modules. Walmart offers something similar called “Item Page Content”, which is available to anyone using WFS, even if you’re not brand registered.
Best Selling Product Categories
Amazon
Walmart
Walmart customers are known to be cost-conscious. They are constantly looking for the best value-for-money products. Amazon also has highly competitive products, but due to the massive size of its customer base, virtually anything goes on the platform.
You can find gourmet items that are luxuriously priced and daily essentials that are cost-efficient. Both Walmart and Amazon also open the possibility of niche markets since they have a broad customer reach. It’s up to the seller to understand their target customer’s needs and the competitive price point.
With the help of tools like SmartRepricer, you can keep products competitive with automated pricing. This ensures you’ll always win the Buy Box in both Amazon and Walmart, regardless of how stiff the competition is for your chosen product category.
International Sellers
Amazon US
Walmart
Amazon and Walmart have opened their doors to non-US residents who want to tap the US market. On Amazon, international sellers make up 52% of its top third-party merchants. Meanwhile, at Walmart, 43% of new sellers were foreign merchants. Chinese sellers make up the bulk of international sellers on both platforms.
Amazon requires non-US residents to meet legal requirements for selling in the US. This includes US taxpayer status, bank account, and incorporation into a supported country. Most merchants find it easier to incorporate in the US and open up a local US bank account.
Walmart accepts incorporation in the US or any of the eligible countries. You don’t need a US TIN since you can use a W-8BEN-E tax form. However, you need to provide a US phone number and US return address.
If you’re a US-based seller looking to expand, Amazon offers Amazon Global shipping, so you can ship to over 100 countries. You can also open a store on an Amazon country-specific marketplace. Walmart only ships to the US and doesn’t offer international shipping.
Customer Support / Seller Assistance
Amazon
Walmart
Both Amazon and Walmart offer dedicated support to their marketplace sellers. They offer comprehensive online documentation to assist sellers in optimizing their stores and gaining customers. Amazon offers email, phone, and chat assistance, while Walmart has the option to request a callback.
For FBA and WFS sellers, the respective platforms will handle customer service. You don’t have to worry about setting up your own customer hotline. However, if you have a bigger operation and the available support isn’t enough, you can always build your own helpdesk.
A tool like OnSite Support lets you create a branded Walmart or Amazon helpdesk that consolidates customer concerns in one seamless dashboard. Customers can choose from intuitive self-serve options or efficient agent assistance.
Performance Standards
Amazon
Walmart
Amazon and Walmart require merchants to meet performance standards to avoid account suspension. These standards are designed to ensure customer satisfaction, which also helps boost your business. For Amazon, you can automatically pass these standards by joining Amazon FBA.
Both platforms emphasize ODR (Order Defect Rate). This metric is measured by negative feedback, credit card chargebacks, and claims under the company’s A-to-Z Guarantee. It also includes orders canceled by sellers, product returns, and late deliveries.
In some cases, you need to dispute a refund or a suspension notice. There are times when you’re innocent, but a customer complains about a counterfeit or defective product. Walmart typically issues a full refund even when a customer returns a wrong or damaged item. You can always contact the platform’s support channels to dispute these cases.
Amazon and Walmart will also work with sellers to improve and meet performance standards. Always do your best to deliver an optimal customer experience to ensure you meet these standards and avoid any suspension notices.
Amazon vs Walmart: Which Platform Should You Join?
The choice between Amazon and Walmart depends on your unique situation and business goals. If you’re a new seller without much e-commerce experience, then definitely go with Amazon. It’s beginner-friendly, and you can become successful easily by using the right tools and best practices.
If you’re a seasoned seller looking to expand your US customer base, consider Walmart. There’s less competition, so your brand will have better exposure. However, if you want to tap international markets, then stick with Amazon. You can offer international shipping or open a store in an international Amazon marketplace.
Besides Amazon and Walmart, you should also diversify your e-commerce presence by creating your own website. Nothing beats having an online store where you can control the entire customer journey and own the collected user data.
Building an e-commerce empire beyond just Amazon and Walmart is easier with Threecolts. You can take advantage of tools that automate repricing, discover reimbursement opportunities, collect feedback from customers, seamlessly sync products between marketplaces, and more. Check out these solutions today.
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