Walmart vs Amazon: Which One is Better for eCommerce Sellers?
If you’re looking for an online marketplace to sell on you have many different choices. Amazon is by far the most popular, but it’s not your only option. One marketplace that’s been gaining steam recently is Walmart.
When most people think of Walmart they think of brick and mortar stores. But the company has recently become the third largest eCommerce marketplace in the US. That, combined with their brand recognition, makes them a viable option for sellers.
So, when it comes to Walmart vs Amazon, which one should you choose? We’ll review the pros and cons of selling on each platform to help you decide the one that’s right for your business.
Table of contents
Amazon vs Walmart by the Numbers
When it comes to Walmart versus Amazon, how do they compare in terms of traffic, revenue, and sellers? Here’s a breakdown of the metrics for each marketplace:
Walmart
Traffic: In May 2022 Walmart had 407.8 million people visit their eCommerce store.
Revenue: During 2022 Walmart generated $47.8 billion in eCommerce sales.
Third-Party Sellers: As of May 2022 there were over 150,000 third-party sellers at Walmart.
Amazon:
Traffic: In May 2022 Amazon had 2.44 billion people visit their website.
Revenue: During the third quarter of 2022 Amazon generated $127.1 billion in sales.
Third-Party Sellers: As of March 2022 there were 2.1 million active third-party sellers on Amazon.
Verdict
Looking at the numbers, it’s clear that Amazon is a lot bigger than Walmart in terms of customers and sales. This means Amazon sellers have a much larger customer base to draw from.
The only advantage Walmart has is its number of third-party sellers. Because they have a relatively low amount of sellers you could say that there’s less competition there. However, you’ll have to weigh that against selling somewhere with fewer customers.
Getting Started on Walmart and Amazon
If you’re a new seller then you’re probably wondering how easy it is to get started. Let’s go over how to sign up for both platforms.
Walmart
You can sign up for a Walmart seller account here. Be aware that in order to become a Walmart Seller you must first register a business.
The initial application process takes about 10 - 15 minutes and you’ll need to provide them with a US business tax ID, your business address, an EIN verification letter for your business address, and the primary categories you plan to sell in.
The approval process usually takes two weeks. Once you get your approval email click the link to complete your account. You’ll need to submit some more information at this point, including your tax information and shipping info.
Amazon
You can sign up for an Amazon Seller account here.
Like Walmart, this process only takes a few minutes. During your signup, you’ll need to have a piece of government ID, a valid credit card, and your tax information. Because Amazon doesn’t require you to have a registered business you don’t need to submit your business tax ID. You will need to verify your address, but Amazon will mail you a postcard to do that.
The approval process takes anywhere from 24 hours to a month, so if you plan to sell on Amazon it’s best to get started on your application early. However, once your account is approved there are no additional steps and you’ll have access to your Seller Central Account.
Verdict
If you don’t already have a business, and you don’t want to go through the hassle of starting one, Amazon will be easier for you.
While both platforms are relatively easy to sign up for, Amazon has a slight edge since you don’t need to register a business. While there are a number of benefits to having a business, many first-time sellers just want to start selling without taking that extra step.
Fees and Costs
The next factor to consider is the cost of selling on each platform. These companies don’t let you sell on their marketplace for free, so it’s important to know what payments you’ll have to make.
Walmart
Walmart doesn’t charge you a monthly fee to sell on their marketplace. However, you’ll pay a referral fee of 6% - 20% on every sale you make. Walmart will also waive your referral fees for the first 30 days.
If you use Walmart’s fulfillment services their fees start at $3.45 per unit per month, and that covers fulfillment and storage.
Amazon
There are two types of Amazon accounts you can sign up for. An Individual Account is free but comes with a $0.99 fee on every sale. Or you can opt for a Professional account which is $39.99 per month and waives the $0.99 fee.
On top of the fees above, there are also referral fees which range from 6% - 45% of the purchase price. However, for most categories the fee falls in the 8% - 15% range.
If you use Fulfillment by Amazon (FBA) you’ll pay both storage and fulfillment fees. Storage fees range from $0.48 - $2.40 per cubic foot per month and their fulfillment fees start at $2.50.
Verdict
It’s clear that it’s cheaper to sell on Walmart than Amazon. However, you have to remember what you’re paying for. An Amazon account gives you access to many more customers, so even with the additional fees it’s likely you’ll still end up making more profit there than you would on Walmart.
Product Data and Analytics
In order to be a successful seller, you need to have access to the latest sales data. This lets you know what’s selling and what isn’t, allowing you to make better decisions about which items to offer.
Let’s go over what analytics tools are available for each marketplace:
Walmart
Perhaps the biggest drawback of selling on Walmart is that there are no analytics tools designed for the platform. This makes it impossible to know how many sales a certain product is generating on their website.
The only option sellers have is to sort Walmart search results by “Best Seller.” This ranks results in order of units sold. However, all this tells you is which product sold the most. It doesn’t tell you how many it sold, which makes this information not very useful.
Amazon
There are a number of analytical tools available for Amazon that will give you access to a wide array of valuable data.
For example, AMZScout’s PRO Extension shows you a product’s:
Monthly sales
Revenue
Review totals
Sales margins
Sales history
Competition levels
And more
This kind of information is invaluable when you’re trying to decide what to sell. It allows you to base your decisions on facts and data, rather than a gut feeling, which gives you a much better chance of success.
Verdict
There’s no question that Amazon has the advantage here. The wide range of tools and data available to Amazon sellers makes it a lot easier to choose profitable products. While you can use Amazon’s tools to take a guess about what might be selling well on Walmart there’s no way to know for sure.
Fulfillment Options
Both marketplaces offer fulfillment services that allow you to ship your inventory to one of their warehouses. Walmart or Amazon associates will then ship your items to your customers when they place an order.
Let’s take a look at these fulfillment options to see how they compare.
Walmart
Walmart recently introduced its Fulfillment Services to compete with Amazon’s FBA program. The biggest difference between the two services is the pricing structure, which we already covered earlier. Walmart charges sellers one flat fee. Depending on the product this might end up being cheaper or more expensive than Amazon.
The biggest drawback of Walmart’s Fulfillment Services is that your inventory must be shipped from within the US. That means if your supplier is located overseas you can’t have them send your products to Walmart for you. Instead, you’ll have to receive your inventory first and then forward it to one of their warehouses. Walmart also won’t accept any products that are over 30 lbs or have dimensions over 25″ x 20″ x 14″.
And If you want to sell to international customers you’re out of luck, as Walmart only has fulfillment centers in the US.
Amazon
Amazon’s FBA program is the original fulfillment solution that made eCommerce selling possible for virtually anyone. The company’s impressive logistics system means orders are delivered quickly and on schedule. Amazon also has a massive amount of distribution centers located all over the world, allowing you to sell in a variety of countries.
Unlike Walmart, you can ship your inventory to Amazon from any country. This lets you automate your business by having your supplier send your inventory to Amazon for you. The company also accepts products up to 50 lbs which means you have a lot more options when it comes to what you can sell.
Finally, if you sell through FBA you’re able to offer customers Prime shipping, which is a huge selling feature for Prime members. Walmart has a similar program (Walmart Plus) but it hasn’t reached the same level of popularity as Prime.
Verdict
Amazon FBA wins with more distribution centers, the ability to ship inventory internationally, fewer restrictions on what you can sell, and Prime shipping. Walmart’s Fulfillment Services is a step in the right direction, but it’s just not on the same level as FBA.
Which Marketplace is Better?
Both platforms have their pluses and minuses, but if you have to choose just one we recommend Amazon. They have way more customers, an easier sign-up process, lots of helpful tools, and a better fulfillment program.
That being said, there’s no reason why you can’t sell on both. Selling products on more than one marketplace is a good way to diversify your business, so it’s worth considering.
Buying on Walmart and Selling on Amazon
Another option you have is buying products on Walmart and reselling them on Amazon. While most items are priced similarly on each marketplace, in some cases there are large price differences. If something is selling for a lot less on Walmart you can purchase the product, list it on Amazon for more money, and profit off the price difference.
This process is called online arbitrage and a number of eCommerce sellers are using it to make money. Here’s how it works:
Get Product Ideas: Check the Amazon bestseller list to see what’s currently popular. You can also use a search tool like AMZScout’s Product Database to find items that meet your criteria.
Look for Products on Walmart: Search for the items you’re interested in on Walmart.
Compare Prices: Once you find a particular product you’re interested in, do a price match on Amazon to see if there’s enough of a difference to make a profit. You can use AMZScout’s Arbitrage & Dropshipping Extension to see what your exact sales margins and profitability will be.
Analyze the Product: If the sales margins are good analyze the item using the PRO Extension. Ideally, it will average over 300 sales a month, have less than 100 reviews, be priced between $30 - $70, have weak competition, and have a consistent sales history. If a product checks all those boxes it’s definitely worth selling.
Buy the Product: Buy as many of the items as you can reasonably afford. Make sure to remove any Walmart labels from the packaging before selling them on Amazon.
List Your Product: Add your item to the existing Amazon listing.
Fulfill Orders: Ship your products to Amazon FBA or fulfill the orders yourself.
This strategy is great for people who don’t want to deal with suppliers. It’s also perfect for new sellers who have never purchased from wholesalers and manufacturers before. Plus, when you buy from Walmart you can purchase as many or as few items as you want, making it a good option for people with a small budget.
Conclusion
In this case study, we found that both Walmart and Amazon offer advantages to eCommerce sellers. But when we do a comparison between the two competing retail giants we find Amazon is the best option. You can also sell on both platforms, or use Walmart to find products to resell on Amazon with the help of AMZScout’s tools.
