Walmart vs. Amazon: Where Should You Sell?
While Amazon has long been at the forefront of online retail and is the name that most people think of when it comes to eCommerce, Walmart Marketplace has also become a viable option for third-party vendors wanting to sell their goods online. But which platform is right for your business? Here’s how Walmart and Amazon stack up in terms of fees, pricing, competition, and other factors so you can decide which platform to sell your products on.
How Do Amazon and Walmart’s Business Models Compare?
When it comes to selling models, Walmart and Amazon offer similar models that give vendors different levels of control over product listings, pricing, inventory, and order fulfillment. Sellers can choose from three models:
1P: Vendors sell to Amazon or Walmart, who then sells to customers.
2P: Vendors sell directly to customers but have access to Amazon and Walmart’s warehouse and fulfillment services. These models are known as Fulfillment by Amazon and Walmart Fulfillment Services.
3P: Vendors list their products on the company’s eCommerce site, but handle their own inventory, shipping, and pricing.
In addition, Walmart offers an option known as dropshipping, in which vendors handle order fulfillment but Walmart covers product listings, pricing, and marketing.
Amazon & Walmart’s Audiences
While Walmart’s emphasis on low prices might attract lower-income shoppers to its physical stores, Walmart and Amazon have a similar customer base on their eCommerce platforms. When Walmart+ launched in 2020, almost 20% of consumers switched to the subscription from Amazon Prime.
With Amazon Prime’s recent price increase from $119 to $139 a year, Walmart+ is a bit more affordable option at $98 per year. Shoppers who prefer the lower price point might begin to shift to Walmart+.
Factors to Consider When Deciding Where to Sell
1. Seller Competition
To sell products on Walmart.com, vendors must be verified businesses with a US tax ID and business address. Selling on Amazon only requires a government ID and tax information, so it’s easy for individuals and people without a registered business to join and list products. Since Walmart’s approval process is much more rigorous, competition is far lower than on Amazon—Walmart has around 100,000 active sellers, while Amazon has almost 2 million.
2. eCommerce and Retail Market Share
When it comes to eCommerce, Amazon is the clear leader with a market share of more than 40%, while Walmart’s eCommerce market share sits around 7%. Walmart’s brick-and-mortar stores still give it a slight advantage in overall retail, where the company holds 9.5% of the market compared to Amazon’s 9.2%
3. Selling Fees
Amazon charges vendors a subscription fee of $39.99 per month, plus referral fees of up to 15% on each sale depending on the product category. If you use Amazon’s fulfillment services, inventory storage options, or optional programs like advertising, you’ll incur additional fees.
With no subscription or setup fees, Walmart’s vendor selling fees are a bit more straightforward. You’ll be charged a referral fee of 8–15% on sales, and monthly storage or fulfillment fees if you use Walmart’s fulfillment services. Walmart also requires all merchandise sold on their platform to have a Universal Product Code (UPC), which you’ll have to pay for separately through GS-1, the UPC provider.
4. Pricing and Buy Box Competition
Since competition is high on Amazon and multiple vendors might be selling the same product, price fluctuations are common. To stay at the top of Amazon search results and be featured on the “buy” button, you’ll need to stay on top of price trends and adjust yours accordingly. Sales volume and low pricing are the two biggest factors in getting featured in Amazon’s buy box.
Since Walmart is less competitive, it’s a bit easier to get on the buy box. Walmart’s emphasis on low prices is reflected in their pricing rules—if your product is sold on your own website at a lower price, or if your prices are much higher than another Walmart seller, the product will be removed. In addition, Walmart restricts product repricing to once per day.
5. Performance Standards
If you fulfill orders yourself, you’ll be responsible to meet certain standards in order to stay on the platforms. Amazon tracks your order defect, cancellation, and late shipment rates, while Walmart measures defects, on-time shipment, and package tracking data. Both companies can suspend you from the platform if you fail to meet their standards.
6. Branding and Advertising Opportunities
Amazon offers optional paid advertising services, which can be helpful in getting your listings shown to customers who search for a generic product without a brand in mind. Advertising is much less common on Walmart.com, with only 1% of its sellers using it. Both platforms offer branding help, particularly for any IP infringement that you may notice.
6. Overall Seller Satisfaction
Amazon offers an in-depth and intuitive seller support center, although some sellers say that Amazon can be cutthroat and difficult to work with. Walmart’s seller tools are less developed and can be confusing to navigate, and while the platform is growing quickly, some sellers report difficulty making sales.
7. Fulfillment Services
Both Amazon and Walmart offer a variety of inventory storage, shipping, and fulfillment services depending on the vendor’s needs. Vendors can access two-day shipping, higher site rankings, and other benefits that can help drive sales.
8. Listing Optimization
Walmart’s seller platform features a product listing guide and a dashboard that provides metrics and insights to help you optimize your product listings to increase sales. Using keyword and product research and studying top listings on both Amazon and Walmart can help you create listings that customers will find.
9. Categories Shopped
On both Amazon and Walmart, customers tend to shop in the same categories. Since both companies allow products in many different categories, you’ll likely find a large customer base willing to buy your products on both Walmart and Amazon.
Deciding Where to Sell
When it comes to selling on Walmart vs. Amazon, there are a lot of factors to consider, including competition, fees, and fulfillment options. It’s important to consider how the platforms align with your needs and preferences, and choose the one that will offer the seller experience that’s best for your business.
The Cymax Group Advantage
Whether you sell on Amazon or Walmart, we can help you launch your products and scale quickly on these marketplaces. With Cymax Group, you have the advantage of an end-to-end integrated eCommerce solution, unmatched 3P selling services, and back-end technology support. We do the heavy lifting for you by listing, optimizing, marketing, selling, shipping, and managing customer service for your products on multiple marketplaces.
Cymax - Top-rated 3P seller on Amazon and Walmart
With close to two decades of eCommerce experience, we are one of the top-rated 3P sellers on Amazon and Walmart with a proven track record. We have the technology and expertise to get your listing in front of the right audiences. Our expert team is constantly improving and optimizing your listings to ensure the best possible conversion rates for your products. With deep knowledge of marketing, branding, and selling on Amazon and Walmart, we help you to increase your probability of winning the Buy Box and increasing your sales.
AI & ML-powered Dynamic Pricing Engine
Our AI-enabled Dynamic Pricing engine is designed for businesses of all sizes and uses machine learning to price more than 500k products across major marketplaces in real-time. Our intelligent algorithms consider a variety of factors including product cost and competitive pricing dynamics, to determine the best value for your products. The result is smarter pricing and a higher probability of beating your competition at winning the Buy Box.
Strategic Account Partners
We offer dedicated account partners, who are experts in eCommerce business management, to help you list your products on top marketplaces and customize your selling strategy for each marketplace to get maximum profit.
Digital Marketing
Cymax Group’s expert digital marketing team offers product and promotion optimization with best-in-class ROAS and ACOS. Drive consistent growth in revenue and margin by aligning your business’s strategic objectives with our proven methodology, technology, expertise and services.
The results are shared with you, down to the SKU level. This level of transparency unique to Cymax Group delivers visibility into marketing budgets and allocation, ROI, contribution, and fulfillment metrics.
Fulfillment
Our proprietary shipping platform, Freight Club, helps you fulfill your orders on time with a higher customer satisfaction rate. It is the only end-to-end freight shipping platform that manages everything from quoting and booking to complete claims management and secondary insurance protection, with zero monthly cost.
As part of Cymax Group Technologies, the leading eCommerce technology, and services provider, we offer exclusive access to enterprise rates from one of the largest selections of residential shipping providers in the United States. This means you have the advantage of discounted rates for big and bulky items and freight shipments that are less than 15,000 pounds.
Customer Service
With our customer service team, you can be confident that your customer’s experience will be a positive one. We manage customer support for multiple eCommerce businesses like yours and our extensive experience allows us to provide professional, high-quality interactions with your customers no matter the level of assistance required, resulting in high-quality customer satisfaction.
With Cymax Group, selling on marketplaces couldn’t be any easier. Book a free consultation with us today and learn how to boost your eCommerce sales.