In the competitive world of e-commerce, two giants stand out: Walmart and Amazon. Both marketplaces offer vast opportunities for sellers to reach a massive customer base and boost their online sales. However, choosing the right platform for your business requires careful consideration of various factors. In this blog post, we’ll delve into the key differences between selling on Walmart vs Amazon, along with their pros and cons to help you make an informed decision.
Table of Contents
- Walmart Marketplace vs Amazon: A Brief Overview
- Market Reach and Audience
- Seller Requirements and Onboarding
- Seller Fees and Pricing
- Fulfillment Services
- Product Discoverability and SEO
- Pros and Cons of Selling on Walmart
- Pros and Cons of Selling on Amazon
- Which Platform Should You Choose?
- Tips for Success on Walmart and Amazon
Walmart Marketplace vs Amazon: A Brief Overview
Before diving into the evaluation of whether to sell on Walmart vs Amazon and the pros and cons, let’s understand the fundamentals of each marketplace.
Walmart Marketplace: Walmart, a retail giant since 1962, has rapidly adapted to the digital landscape by launching Walmart Marketplace in 2009, allowing third-party sellers to list their products on the platform. It boasts a loyal customer base and is known for its focus on providing quality products at competitive prices.
Amazon: Established in 1994, Amazon is the world’s largest e-commerce platform with a vast range of products and millions of active customers. Amazon Marketplace enables third-party sellers to access Amazon’s global audience, leveraging the company’s efficient fulfillment and logistics services.
Market Reach and Audience
- Amazon is a global leader in e-commerce, with a massive presence in multiple countries.
- Its extensive customer base consists of millions of active shoppers, spanning various demographics and geographic locations.
- Amazon’s Prime membership program and efficient fulfillment services (Amazon Prime) attract loyal and frequent shoppers.
- Though it’s still growing, Walmart’s online presence caters to a significant number of customers, including its existing in-store customer base.
- Walmart has a strong focus on serving local communities and attracting price-conscious consumers.
Seller Requirements and Onboarding
- Amazon offers two main seller options: Individual Sellers and Professional Sellers.
- Individual Sellers are suited for those with a small number of products, while Professional Sellers accommodate large-scale businesses.
- Seller registration is relatively straightforward, but additional verification may be required for certain categories, such as health and beauty.
- Walmart Marketplace emphasizes a curated approach, carefully selecting sellers to ensure product quality and customer satisfaction.
- Seller registration is fairly easy. The onboarding process involves an application review, and sellers must meet specific criteria related to product assortment, ratings, and fulfillment capabilities.
Seller Fees and Pricing
- Amazon charges sellers a referral fee based on the product category, typically ranging from 6% to 45% of the item’s sale price.
- Additional fees may apply for using Fulfillment by Amazon (FBA) services, storage, and removals.
- Amazon offers a “Buy Box” feature that highlights the seller with the best combination of price, shipping, and performance metrics.
- Walmart charges referral fees based on product categories, similar to Amazon, but the percentages may vary.
- There are no separate fees for using Walmart’s fulfillment services, which are optional for sellers.
- Walmart encourages competitive pricing, and its algorithm factors in price as a crucial determinant for winning the Buy Box.
- Amazon’s Fulfillment by Amazon (FBA) service enables sellers to store their products in Amazon’s warehouses, allowing for fast Prime shipping and enhanced visibility.
- FBA also handles customer service, returns, and provides access to Amazon’s multi-channel fulfillment capabilities.
- Walmart Fulfillment Services (WFS) offer a similar fulfillment option as FBA, allowing sellers to utilize Walmart’s logistics network and compete with Amazon’s Prime shipping.
- Sellers can also choose to handle fulfillment themselves, although WFS can provide a competitive edge.
Product Discoverability and SEO
- Amazon’s search algorithm prioritizes factors like product relevance, sales history, customer reviews, and conversion rates.
- Sellers can leverage Amazon’s advertising platform and sponsored product campaigns to increase visibility.
- Walmart’s search algorithm focuses on various factors, including price, product details, and availability.
- Walmart Advertising Partners program enables sellers to promote their products through sponsored search and display ads.
Pros and Cons of Selling on Walmart
Less Competition: Compared to Amazon, Walmart’s marketplace has fewer sellers. This means less competition, which can be an advantage for smaller businesses trying to establish themselves.
Loyal Walmart Shoppers: Walmart has a substantial customer base, with many customers being regular Walmart shoppers. Selling on Walmart allows you to tap into this loyal consumer group.
Curation of Sellers: Walmart curates its sellers, which means it can create a more trusted and exclusive image for its marketplace.
Strict Requirements: Walmart has rigorous seller requirements, and not all sellers may qualify to join the marketplace. This can be a barrier for some businesses.
Limited Product Categories: Walmart’s marketplace focuses primarily on specific product categories, which might not suit all sellers’ offerings.
Less Global Reach: While Walmart is expanding internationally, it still lacks the global presence that Amazon possesses.
Pros and Cons of Selling on Amazon
Unmatched Customer Reach: Amazon’s massive customer base and global presence give sellers unparalleled exposure to potential buyers.
Fulfillment Services: Amazon offers Fulfillment by Amazon (FBA), which allows sellers to store their inventory in Amazon’s warehouses, enabling quick and efficient order fulfillment.
Wide Range of Product Categories: Whether you sell books, electronics, or clothing, Amazon provides a platform for nearly every product category imaginable.
Intense Competition: The sheer number of sellers on Amazon means that competition can be fierce, making it challenging for new sellers to gain visibility.
Strict Performance Metrics: Amazon’s stringent performance metrics can result in penalties or account suspension if sellers fail to meet the required standards. It can also be difficult for new sellers to compete against top selling items at Walmart with higher performance scores.
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Fee Structure: While Amazon offers a vast customer base, sellers must contend with various fees, which can impact their profit margins.
Which Platform Should You Choose?
Deciding between Walmart and Amazon largely depends on your business’s specific needs and goals. If you are a smaller seller with niche products seeking a dedicated customer base, Walmart might be a better option. On the other hand, if you aim to reach a vast global audience and have the resources to manage fierce competition, Amazon could be the right fit.
Tips for Success on Walmart and Amazon
Optimize Product Listings: Whether on Walmart or Amazon, having well-optimized product listings with high-quality images and compelling descriptions is crucial.
Competitive Pricing: Research and set competitive prices to attract customers and stand out in the crowded market.
Customer Service: Prioritize excellent customer service to build trust and encourage positive reviews.
In the battle of Amazon Marketplace vs. Walmart Marketplace, both platforms offer unique advantages to sellers. Amazon’s vast global reach and loyal Prime customer base provide unmatched exposure, while Walmart’s focus on affordability and local communities can be appealing to specific demographics. Walmart offers a less competitive landscape and a loyal customer base, while Amazon provides unparalleled customer reach and efficient fulfillment services.
Choosing the right marketplace depends on factors like target audience, product assortment, fulfillment preferences, and budget. Many sellers opt for a multi-channel approach to maximize their e-commerce potential, strategically utilizing both Amazon and Walmart to reach a diverse range of shoppers.
Assess your business’s requirements, product range, and capacity to compete, then choose the marketplace that aligns best with your goals. Remember that success on either platform requires careful planning, dedication, and a customer-centric approach.