In the world of e-commerce, Walmart and Amazon are two major players that offer sellers unique opportunities to reach a vast customer base. As former sellers, we have extensive experience on the differences, pros, and cons of selling on Walmart vs Amazon.
The choice between selling on Amazon or Walmart depends on your specific business goals and priorities. Amazon offers a broader reach but comes with higher fees and intense competition, while Walmart has lower fees and a less crowded marketplace but caters to a different customer base.
In this article, we’ll share with you some of our lessons learned as third party sellers, as well as factors to consider when deciding whether to sell on Walmart vs Amazon.
Amazon boasts one of the largest customer bases in the world. With millions of active users, you have the potential to reach customers from around the globe. This immense reach can lead to increased sales opportunities, but it also means you'll face more aggressive competition.
Walmart, though not as extensive as Amazon, still caters to a vast customer base. It primarily attracts customers looking for everyday products at competitive prices. If your products align with this demographic, Walmart Marketplace could be a great fit.
Amazon charges sellers various fees, including referral fees, fulfillment costs (if you use Fulfillment by Amazon), and monthly subscription fees for the Professional plan. These costs can add up, but they come with the benefit of Amazon's vast customer reach and fulfillment services.
Walmart generally charges lower fees compared to Amazon. While there are no subscription fees, you'll incur referral fees (selling fees), which are category-dependent. This can be an advantage for smaller businesses looking to keep their overhead low.
With its massive customer base, Amazon attracts sellers from all over the world. The competition is intense, and it can be challenging to stand out in a crowded marketplace. To sell on Amazon, you must adhere to strict performance metrics and adhere to their policies.
Walmart Marketplace has less intense competition, making it a good option for smaller businesses and new sellers. However, Walmart has rigorous requirements for product quality and fulfillment speed, so meeting their standards is crucial to success on the platform.
Amazon offers its Fulfillment by Amazon (FBA) program, which provides warehousing, packaging, and shipping services. This can save you time and effort but comes with additional fees. It's a great option if you want a hands-off approach to fulfillment.
Amazon also has a Fulfilled by Merchant (FBM) program, which allows sellers full control of their sales and fulfillment. However, FBM sellers are not eligible for Amazon Prime's two-day shipping.
You can learn more about Amazon FBA vs FBM in our full article here.
As of 2022, Walmart has its own fulfillment solution, known as Walmart Fulfillment Services (WFS). WFS operates similar to Amazon FBA in that sellers can leverage Walmart's distribution infrastructure to decrease shipping times, costs, and workload.
Walmart also allows sellers the option to fulfill orders themselves, which gives you more control over your operations.
You can also choose to use a third-party fulfillment service (like a prep center) if you prefer a middle ground between FBA and self-fulfillment.
Amazon is known for its customer-centric approach, including fast shipping, easy returns, and exceptional customer service. As a seller, you benefit from this positive reputation, but it also means you need to meet high customer service standards.
Walmart emphasizes a seamless shopping experience, so you'll need to maintain excellent customer service and adhere to their return policies. If you can provide a top-notch customer experience, it can lead to loyal customers.
In many cases, sellers opt for a multi-channel approach, selling on both platforms to diversify their customer base. In fact, this is what we used to do when we were doing online arbitrage ourselves.
This approach allows you to take advantage of the pros and cons of each platform, as well as allows your business to not be at the mercy of a single selling platform.
There is a bit of a learning curve to being a Walmart seller vs an Amazon seller, and for many businesses, it makes sense to pick a platform in the beginning and just get started. However, once your platform of choice is up and running, you can improve the velocity of your sales by listing items on multiple platforms.
Adding to your business's repertoire of online marketplaces generally will improve sales, as long as you've got the supply to support each platform.
Ultimately, the decision should align with your unique business strategy, budget, and long-term goals. Whichever platform you choose, a well-executed e-commerce strategy can lead to success on either Amazon or Walmart Marketplace.
When deciding between selling on Amazon and Walmart Marketplace, consider your business goals, product type, and your willingness to meet each platform's requirements. If you're looking to reach a vast global audience and are prepared to face intense competition, Amazon might be your best choice.
On the other hand, if you want a platform with lower fees and a less crowded marketplace, Walmart Marketplace could be the right fit.
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