When Amazon started its first bookstore in the late 90s, Walmart already had opened almost 2000 discount stores, 276 international stores, and 239 Supercenters. At that time, Walmart had made around 100 billion dollars in profits only in the US market.
Now the time has changed. Amazon became the most prominent online retailer with a revenue of $469.82 Billion in 2021, while Walmart’s e-commerce sales were $43 Billion, ranking at 7th position.
But that doesn’t mean Walmart won’t give any competition to Amazon. Walmart is still leading in the market with more physical stores and grocery sales. If we combine Walmart’s both online and physical sales, it makes more than Amazon in many ways. But still, we have a lot to talk about.
In this post, we will talk about the difference between selling on Walmart vs. Amazon and what’s the outcome. We will also cover the points on differences and similarities between selling on Walmart and Amazon, which will help you make the best decision to start a business.
Table of Contents
- Selling on Walmart vs Amazon
- A Few Similarities between Walmart and Amazon
- Selling on Walmart vs Amazon: Pros & Cons
- Can You Sell On Both Walmart And Amazon?
- Final Verdict – Walmart or Amazon?
Selling on Walmart vs Amazon
Here we are going to compare how selling on Walmart is different from selling on Amazon.
Registration for Seller Account
You can easily register on an Amazon Seller account while Walmart’s a bit more precise. On Amazon, you can register to sell by listing a product within a few days. Your SSN (Social Security Number) would be enough for approval.
Walmart’s seller account requirements are much stricter. Before selling on Walmart, you must be approved after the registration. To be approved, you must have a registered business in your country along with a US Business Tax ID.
According to the sources, Walmart’s online retail marketplace is less saturated, which has around 35,000, while Amazon has over 2 million. That means you have to face more competition on Amazon than on Walmart.
Starting a seller’s account on Amazon is much easier. Even if you are an inexperienced seller, you can complete your registration with ease and start selling products on Amazon. You will not need to provide any of your products’ information before opening the account.
While registering, you must have access to the following information.
- Bank account number and routing number
- Tax information or your SSN
- Imputable credit card
- National ID (Government-issued)
- Phone number
You must be a citizen of the country that the information and ID you have provided.
Unfortunately, Walmart is a tough place to start for beginners. It would be a lot easier if you already have a well-establish business. That’s why you’re going to need a few more documents to meet the eligibility criteria to become a Walmart seller.
- US business Tax ID along with the business address (SSN is not accepted)
- Proof of the place or address of physical operations
- EIN Verification letter from the US department of treasury (it verifies your business address of physical operations in the US)
- If you have a US-based SSN, submit your W-9 form filled out by you. If you’re residing outside the US, submit your W-8 filled by foreign individuals who receive income from US sources.
- Product catalog through API, bulk upload, or solution provider
- Product information (catalog size, category, etc.)
If you’re using WFS, you will be required.
- Your products must be shipped from US-based Walmart’s fulfillment centers
- The maximum weight of the product should be 30 lbs
- The maximum dimensions of the product should be 25″×20″×14″.
- No regulated or fragile products
For now, Walmart only allows businesses that are registered in the US to on their marketplace.
Amazon offers two selling plans while registering to the seller account – Professional and Individual. The professional seller account subscription plan costs $39.99 each month, while the individual seller account charges $0.99/sale. You can run PPC ad campaigns and compete for the Buy Box with a professional seller account but not with an individual account.
On the other hand, Walmart doesn’t charge any subscription fees. They charge a fixed referral fee on each sale to their sellers, which is around 15% of that particular product price. Additionally, if you are using WFS (Walmart Fulfillment Services), they will charge you fulfillment fees.
Amazon charges an average of 15% referral fee in most categories for each item sold which is quite similar to Walmart.
Amazon allows complete control to the FBM sellers, such as controlling the shipping process and entire handling. The FBM sellers use their own resources to ship their product directly to the buyer to avoid paying service & shipping fees to Amazon.
On the other hand, FBA sellers pay Amazon for handling their complete shipping process. The calculations of the fees are based on the product weight and dimensions. This fulfillment fee also includes the expense of monthly storage.
Amazon fetches monthly storage fees from the sellers, which is based on how much inventory was in and out of an Amazon warehouse. If your product hasn’t been out for 180 or more days, Amazon will charge you $6.90 per cubic foot of storage. If it stays longer than 360 days in the Amazon warehouse, you have to pay $0.15 per unit.
Walmart doesn’t charge any monthly fees to sell on its platform. And they have a crystal clear referral fee than Amazon.
Sellers can expect a solid 15% of each sale price sold through Walmart’s marketplace. Like Amazon FBM, if you’re fulfilling the orders by yourself, you will have just to pay the referral fee. Since you’re handling the shipping and its cost, you don’t have to understand any other fees.
But if you are using WFS, you have to pay additional fees along with the service. WFS is an intelligent choice by the Walmart sellers because it is competitive as well as cost-effective. WFS does have some restrictions on product weight and dimensions.
Winner: Walmart (because the selling fees of Walmart is more straightforward than Amazon and even eBay)
Personalized Account Management
Walmart provides personalized support to both the sellers using WFS and the WFS expert who shares recommendations and expertise.
To get personalized support from Amazon, you have to pay a considerable amount of $1600 per month and a fixed percentage of your sales.
For now, Amazon has more grip and reach on consumers than Walmart. We discovered that 65% of US consumers shop from Amazon, almost double that of Walmart consumers.
Amazon aggregates more than 200 million visitors in the US, while Walmart has only 100 million. But if we count Walmart’s both online and physical visitors, they are even.
Amazon holds 30.8% of e-commerce sales worldwide, making it number one in this category. The numbers were high before the pandemic, but the profit fell from $2.3 billion to $1.3 in North America due to delayed Prime deliveries.
Amazon totaled $600+ million during the pandemic, plus spending $4 billion on COVID-related expenses, PPE kits, and higher wages.
Walmart is still a brick-and-mortar company, no matter how much effort it puts into e-commerce. Walmart somehow passed a critical modulation point in 2020. That’s why it was reported Walmart would outstrip eBay for the first time as the second-largest online retailer after Amazon.
A Few Similarities between Walmart and Amazon
Here are we are going to explain a few similarities between Walmart and Amazon
Free and Guaranteed 2-day Shipping
If consumers have a membership, Walmart and Amazon both offer fast 2-day shipping through their fulfillment services.
After starting WFS, Walmart’s supply chain logistics took the responsibility to deliver the products within two days. If consumers don’t have a Walmart membership, they must order a minimum $35-ranged product for free delivery. The same happens with Amazon. Prime members can take advantage of free and two-day shipping.
Both Walmart and Amazon offer options for service fulfillment to their sellers.
As we already mentioned, how FBA and FBM work in Amazon. The service was started in 2006. To compete with Amazon’s fulfillment services, Walmart also started WFS (Walmart fulfillment services) in 2020.
The only difference is that Walmart only allows the sellers to ship their products from US-based fulfillment centers, while Amazon allows them to ship products from other countries to their FBA warehouse.
As an Amazon seller, it is crucial to know the importance of optimizing your listings. If your products are properly optimized, it will help the visitors reach your product and convert them into customers. It also helps you increase your organic ranking and minimizes returns by providing quality content and services.
Similarly, these factors also play an essential role in selling on Walmart. You can use a proper keyword research tool on both platforms to optimize your listing and get proper research on keywords and products. You can use Jungle Scout’s advanced tools to get data-driven insights to gather your audience’s attention.
Advanced Listing Content
Amazon BSR sellers and registered sellers can create beautiful and detailed product descriptions featuring logos, images, infographics, and modules.
Walmart WFS users can also create Item Page Content similar to Amazon’s brand registry. The only difference is that you won’t need to be a branded seller to create product descriptions on Amazon.
After a deep survey, we came to know that both Walmart and Amazon shoppers especially shop for grocery, clothing, personal care, and beauty care. This is why listing optimization is a crucial factor if you are running an eCommerce store.
When you sell a product in a specific niche, you find a better audience and conversions. To generate more revenue in your business, you must find trending products and make sure you are never out of stocks.
Selling on Walmart vs Amazon: Pros & Cons
Here are the pros & cons of selling on Walmart and Amazon.
Selling on Walmart Pros
- The Walmart selling central is easy to use once you sign up and they also amazing customer support within a few hours.
- Walmart’s fees are low in comparison to Amazon’s fees.
- Walmart doesn’t charge a recurring monthly fee for the seller account.
- In the 4th quarter, the storage fees are much cheaper in comparison to Amazon.
- You don’t have to pay any extra fees for products except for referral fees.
Selling on Walmart Cons
- Setting the seller central account on Walmart is more complex than on Amazon.
- Walmart does not allow dropshipping for normal sellers.
- The traffic of this marketplace is relatively low in comparison to Amazon.
Selling on Amazon Pros
- With the Amazon marketplace, brands get better exposure in comparison to Walmart.
- It is easier to set up the Amazon seller central account and for it, you need to have any kind of business experience.
- Amazon FBA allows you to dropship your products even from outside of the US.
- Amazon offers access to exclusive marketing tools to their sellers so they can stand out from the competitors.
- You can set up any pricing you want on products, there are no restrictions on pricing.
Selling on Amazon Cons
- You have to pay a recurring monthly fee to keep using your Amazon seller central account.
- You might have to pay a lot of complicated fees for your products.
- The Amazon marketplace is saturated and the competition is very high.
Can You Sell On Both Walmart And Amazon?
If you are already an established Walmart or Amazon seller and planning to expand your reach, then it is a great idea to start selling on both platforms. Yes, you heard it right; you can sell on Walmart and Amazon both at the same time. There is no need to choose between them if you have the budget to sell on both platforms. According to recent Amazon statistics, 12% of existing Amazon sellers are planning to expand their business to Walmart.
It is an exciting opportunity for beginners and experienced sellers to start selling on Walmart. If they are experienced Amazon sellers who are expanding to Walmart, then they can use their Amazon selling experience on Walmart to start generating revenue on Walmart. The only issue with Walmart is that you need to have an established business in the US to start selling on Walmart. Other than that, you can easily sell on both platforms if you meet the necessary requirements.
Final Verdict – Walmart or Amazon?
After doing the research on Walmart and Amazon, we came to know that both have their own pros and cons on selling on their platforms.
If you’re a beginner and looking for a place to start your eCommerce store, Amazon would be a wise choice, but you have to face a lot of competition. If you are looking for less competition, Walmart is the best but only for well-established business persons.
With Amazon, you can start your seller’s account from anywhere in the world, while Walmart sellers can only sell in the US. But if you are living in the US, you can take advantage of both platforms and start your business today.