Interested in getting an ecommerce business up and running? One of the first big decisions you’ll need to make is where to sell your products online. Two of the biggest digital marketplaces are Walmart and Amazon, and they’re both appealing to sellers who want to kickstart their ecommerce business in a big way.
When it comes to selling on Walmart vs. Amazon, there are some key differences you should be aware of. From fees and fulfillment options to customer demographics, where you choose to list your products online can have a big impact on your success as a seller. Let’s look at the strengths and weaknesses of both marketplaces, so you can choose the platform that best positions your ecommerce business for success.
Head-to-Head: Comparing Selling on Walmart vs. Amazon
Before selling on Walmart vs. Amazon, you should have a clear understanding of how both platforms work. From seller requirements to fees and costs, fulfillment options to the types of customers using both platforms, these details can have a big impact on your success as a seller.
Here’s a head-to-head comparison of selling on Walmart vs. Amazon when it comes to important factors:
1. Seller Requirements and Approval Process
The first step in any ecommerce journey is setting up a seller account. Here’s a look at how Walmart and Amazon treat prospective sellers who are just signing up for the first time:
Walmart
Walmart enforces higher barriers to entry for sellers compared to Amazon. To be considered, you’ll typically need a registered business in your state, a valid US Business Tax ID (no Social Security Numbers accepted), and demonstrable experience selling online through other marketplaces. This focus on established sellers helps maintain a high standard of professionalism on the platform. The stricter application process translates to a smaller pool of approved Walmart sellers. This can be a significant advantage for those accepted, as it means less competition for customer attention and potentially higher sales volume.
Amazon
Getting started on Amazon is a more streamlined process. You can choose between Individual and Professional seller plans, with the Individual plan catering to casual sellers with limited inventory. This ease of entry has led to a much larger and more diverse seller base on Amazon. The sheer volume of sellers on Amazon can make it a fiercely competitive marketplace. Ranking high in search results and attracting customer attention requires careful optimization of your listings and potentially lower profit margins.
2. Seller Fees and Costs
No matter where you sell online, you’re bound to pay fees. How those fees are structured matter! Here’s a breakdown of seller fees and costs for Walmart vs. Amazon:
Walmart
Unlike Amazon, Walmart doesn’t charge a monthly subscription fee for sellers. Instead, you pay referral fees that vary by product category, typically ranging from 6% to 20% of the sale price. Walmart also offers an optional fulfillment service called Walmart Fulfillment Services (WFS). WFS incurs separate storage and fulfillment fees based on product size and weight. However, it can free you from managing inventory and shipping, potentially boosting efficiency.
Amazon
Amazon offers two seller plans: Individual ($0.99 per item sold) and Professional ($39.99 monthly fee). The Professional plan allows for unlimited item listings and additional selling features. In addition to the seller plan fee, Amazon charges referral fees similar to Walmart’s structure. There are also closing fees per item sold and potential fulfillment costs if you choose Fulfillment by Amazon (FBA). While FBA offers convenience, its fees can add up significantly.
3. Platform Ease of Use for Sellers
Success as an ecommerce seller depends heavily on how effectively you can harness the tools at your disposal. Here’s a quick breakdown of what to expect on both Walmart and Amazon:
Walmart
Once approved, Walmart Seller Center offers a user-friendly interface for listing products, managing inventory, and tracking sales. However, compared to Amazon, there are fewer features and tools available. While the interface is relatively simple, the application process and stricter seller requirements can create a steeper learning curve for new sellers compared to Amazon.
Amazon
Amazon Seller Central offers a comprehensive suite of features and tools, including product research tools, advertising options, and detailed sales analytics. However, this complexity can be overwhelming for new sellers. The sheer number of features and options on Amazon Seller Central can create a significant learning curve for beginners. Mastering these features takes time and effort.
4. Customer Reach and Demographics
Where you choose to list your products matters as much as what you’re selling. As you seek to identify your target audience of shoppers, keep these factors in mind:
Walmart
Walmart attracts a customer base known for being value-conscious and budget-minded. This makes it a strong platform for competitively priced everyday essentials like groceries, home goods, and electronics. While Walmart offers a wide range of products, it has a particular focus on essential categories. If your products fall outside these core areas, you might find a better fit on Amazon.
Amazon
Amazon boasts a vast and diverse customer base encompassing a wide range of demographics and buying habits. This makes it a good choice for sellers with a broad product selection or a niche audience you can target effectively through advertising. Amazon also offers a wider variety of product categories compared to Walmart. This allows sellers to reach a broader audience and potentially tap into new markets.
5. Product Fulfillment Options
Fulfillment is perhaps the most important part of the ecommerce cycle. Both Walmart and Amazon have robust options for getting your products into the hands of eager customers:
Walmart
Walmart Fulfillment Services (WFS) is currently not open to all sellers. New sellers typically have to start with self-fulfillment, which means managing their own inventory, packaging, and shipping. Additionally, Walmart restricts repricing for seller-fulfilled products. While WFS offers advantages, self-fulfillment on Walmart allows for more control over pricing and margins. However, it requires a robust fulfillment infrastructure to ensure timely deliveries and customer satisfaction.
Amazon
Fulfillment by Amazon (FBA) is a popular option for many sellers. It allows you to send your inventory to Amazon warehouses, and they handle picking, packing, shipping, and customer service for your orders. This frees you to focus on product sourcing and marketing. Amazon also allows for seller-fulfilled options, giving you more control over fulfillment costs but requiring more logistical management. Unlike Walmart, Amazon allows for more flexibility in repricing seller-fulfilled products.
Key Differentiators for Walmart vs. Amazon
Selling on Walmart vs. Amazon isn’t always a clear-cut decision. While both have their pros and cons, the best choice often comes down to your unique circumstances as a seller. Which platform lends itself to your products, business model, fulfillment needs, or technical capabilities?
To help guide you, here’s a high-level breakdown of the biggest differentiators for Walmart vs. Amazon:
Walmart Marketplace
- Higher Barrier to Entry: While the application process can be selective, Walmart’s seller requirements are generally less stringent compared to Amazon. It’s often harder to get started on Walmart but can be easier to scale and grow once you’re accepted.
- No Monthly Fees: Unlike Amazon’s Professional seller plan, Walmart doesn’t charge a monthly subscription fee. This can be a significant advantage for sellers with a smaller product catalog or those just starting out.
- Focus on Value: Walmart attracts a customer base known for being budget-minded. This can be a major advantage for sellers offering competitively priced everyday essentials. It’s also ideal for sellers who run sales or specials.
- In-Store Pickup: Walmart offers a convenient in-store pickup option for many items, potentially increasing customer satisfaction and conversion rates, especially for local buyers.
Amazon Marketplace
- Massive Customer Base: Amazon boasts a vast and diverse customer base, offering sellers unparalleled reach and exposure to a wide range of potential buyers.
- Prime Membership Advantage: Amazon Prime members enjoy faster shipping and other benefits, making them more likely to convert and potentially increasing order values.
- Extensive Fulfillment Network: Fulfillment by Amazon (FBA) offers a robust and convenient fulfillment solution for sellers, allowing them to scale their business efficiently.
- Advanced Features and Analytics: Amazon Seller Central provides a comprehensive suite of features and tools for product research, advertising, and detailed sales analytics, empowering sellers to optimize their listings and marketing strategies.
Selling on Walmart vs. Amazon: Choosing the Right Platform
Selecting the ideal ecommerce platform hinges on several key factors specific to your business. Here’s a breakdown of what to consider when choosing between Walmart Marketplace and Amazon Marketplace:
A. Consider Your Products and Brand
When choosing a platform, consider how well it aligns with your products and target audience. Does your brand resonate more with the value-conscious shoppers who frequent Walmart, or the broader audience that shops on Amazon? Analyze your ideal customer profile and their shopping habits. Additionally, evaluate the platform’s strengths in relation to your product selection. If your core products fall under Walmart’s focus categories like essentials and groceries, it might be a better fit. Conversely, Amazon caters well to a wider variety of products.
B. Gauge Business Needs and Resources
Assess your financial situation and resource limitations when making your decision. While Walmart has no monthly fees, its referral fees can be significant. On the other hand, Amazon’s monthly subscription and potential FBA costs need to be factored in. Evaluate your ability to handle in-house fulfillment or the necessity of a fulfillment service like FBA/WFS, considering the associated costs and your manpower limitations.
C. Have a Clear Growth Strategy
Think long-term about your business goals. Does the platform offer international reach if you plan to expand globally? Currently, Amazon has a wider global presence compared to Walmart Marketplace. Consider the possibility of selling on both platforms to maximize reach, especially if your products fit well on both marketplaces. However, analyze the workload and resources required for managing listings across both platforms before making a decision.
Walmart vs. Amazon: Finding the Perfect Fit
The choice between Walmart Marketplace and Amazon Marketplace ultimately depends on your aspirations as a seller.
For sellers with a strong focus on value-driven essentials and a budget-conscious target audience, Walmart Marketplace might be a strategic fit. Fewer competing sellers and the potential for in-store pickup can be attractive benefits, too. However, if you prioritize reaching a massive customer base and leveraging advanced fulfillment options like FBA, Amazon Marketplace offers a compelling solution.
The extensive suite of seller tools and established Prime membership program can also be significant advantages—especially when you’re up against stiff competition.Whether you’re selling on Walmart vs. Amazon or both, NorthOne is ready to help you keep a close eye on your finances. Apply for NorthOne Connected Bank Account and you’ll be able to see your revenue analytics with a powerful Revenue Dashboard, so you can sell better.
