Many ecommerce businesses are wondering – is it better to sell on Walmart or Amazon? What are the benefits, pros and cons of each platform?
In this article, we cover the advantages and disadvantages of each platform – including costs, marketing opportunities and supply chain considerations.
By the end of this article, you’ll have a better understanding of which platform to start with – although we still recommend selling on both Walmart and Amazon eventually, if you can.
But if you’re looking to start with only one platform first, this article is for you. Let’s dive in!
Use this outline to skip to any section of this page:
- What’s the main difference between selling on Walmart vs. Amazon?
- Selling on Walmart: Pros
- Selling on Walmart: Cons
- Selling on Amazon: Pros
- Selling on Amazon: Cons
- Which is better: Walmart vs. Amazon?
What’s the main difference between selling on Walmart vs. Amazon?
The main difference between selling on Amazon vs. Walmart is the size of their respective marketplaces – and the type of customer they attract.
- Amazon, which launched in 1995, dominates online retail today in terms of sales and volume – which means greater potential scale.
- It has over 310 million active customers globally and offers a broad selection of product categories, from consumer electronics to apparel and home goods to food & beverage.
- This makes it attractive to both general shoppers as well as long-term customers who may purchase products that are more specific or niche.
Additionally, Amazon allows sellers access to more tools and services that can help them market their products effectively – such as sponsored brand campaigns, automated pricing optimization tools, and direct feedback from customers through reviews & ratings systems.
This makes it easier for even small sellers with limited resources to compete against larger companies.
On the other hand Walmart was founded in 1962 primarily as a brick-and-mortar retailer. with services like groceries or prescriptions built into its platforms since then.
- Although it has significantly grown its eCommerce capabilities over time; this growth still pales compared to Amazon’s success in recent years.
- This is due to Walmart not having a powerful digital presence yet – but continues moving forward steadily today by growing new digital initiatives and ecommerce.
- Given the importance for retailers being present both offline and online nowadays, we can expect Walmart to continue building out their online retail operations.
Overall, both platforms are worth exploring – and eventually selling on. But if you’re looking for the best option to start selling with, let’s run through the pros and cons of selling on Walmart vs. Amazon.
Selling on Walmart: Pros
Beginner-friendly fees
Walmart has become a popular marketplace for online sellers due to its beginner-friendly selling fees.
- As one of the world’s largest retailers, Walmart has created an opportunity for small business owners to join their platform with no setup, monthly or annual fees like other online marketplaces.
- The only fee that new sellers pay is a fee on each item sold, which is based on the item’s customary retail price. This fee typically runs between 8% and 15%, depending on the category of the product being sold.
Sellers can also take advantage of other features such as:
- Free returns and flexible shipping options – which have been implemented to make selling more efficient and cost effective).
- Support for sellers through their Seller Center portal – which includes tools to help manage orders and payments, access product performance insights, track shipments, view order history, respond to customer inquiries and more.
- This makes it easy for sellers to get started and stay organized while selling on Walmart.
- Walmart offers free listings in all US markets – which means you can start listing your products without having to shell out any money upfront.
For these reasons, Walmart has become a great way for new online sellers to get started with minimal risk and low costs associated with setting up shop.
The intuitive interface makes it easy for anyone to quickly list their products without any technical knowledge or coding experience.
Coupled with helpful customer service resources available through their Seller Center portal and the additional benefits outlined above (such as free returns and flexible shipping options), this makes selling on Walmart an attractive option for those looking to get into eCommerce without breaking the bank.
Similar fulfillment centers to Amazon
Selling on Walmart is an efficient and streamlined process.
This is because the fulfillment centers are almost identical to those of its biggest rival, Amazon.
- When sending your products to Walmart for storage, packing, shipping, and returns, you can rest assured that you are getting the same level of quality as you would with Amazon.
- Walmart’s fulfillment centers are typically located near its main distribution centers. This ensures that your products will be stored safely and securely throughout the entire delivery process.
- The warehouses also feature advanced technology designed to optimize packaging processes and maximize cost-savings.
- They also have automated picking systems capable of processing orders quickly so that customers receive their purchases in a timely manner.
Walmart has built up strong relationships with its carriers so that it can offer competitive shipping rates and reliable service.
When it comes to returns, Walmart has set up an easy-to-use online system
This allows customers to simply upload their return information or enter a return code into the system. From there, the customer will be provided with pre-paid return labels along with instructions on how to package up their item for shipment.
This makes it easy for customers to return items with minimal effort on their part – resulting in a better customer experience overall. And you don’t have to lift a finger (essentially, it’s the same process with Amazon).
With all these features in place, selling your products on Walmart is sure to make your business more successful by providing excellent customer service and convenience for shoppers every step of the way.
Selling on Walmart: Cons
Somewhat-restrictive rules
Amazon is known to have restrictive rules too – so when it comes to looking for an Amazon alternative… you typically look for less restrictions (like platforms such as eBay and Etsy). We cover eBay vs. Amazon here too.
However, Walmart still has decent restrictions too. This means there’s not much advantage of Walmart vs. Amazon on this topic.
Selling on Walmart requires you to meet certain restrictions and rules, which can be time-consuming and tedious in the long run.
Walmart may require you to submit detailed information, which can include:
- Tax returns
- Articles of incorporation
Business licenses - Other relevant documents that can verify or prove your identity as a legitimate vendor on Walmart.com.
Keep in mind – it’s not like eBay or Etsy, where you can list any product on any listing, or even create your own listings. There’s an approval process similar to Amazon when it comes to listing products.
You must also comply with all applicable laws and regulations such as the Fair Labor Standards Act (FLSA) and the Americans with Disabilities Act (ADA), among others. On top of that, you must adhere to all Walmart policies for sellers which could include guidelines on pricing and quality standards for merchandise listed on the website.
Furthermore, there are also restrictions when it comes to the types of products you can sell; some products may not be allowed or may require additional approval from Walmart before being listed on its website.
Final points:
- Overall, you need to invest in time and money upfront in order to make sure that everything is in compliance with their rules and restrictions.
- These restrictions may cause difficulty for new businesses or vendors to list their products – since they might not have enough capital or experience yet to meet all the criteria needed by Walmart.
- Business owners need to take into account all aspects before deciding if they want to sell their products through Walmart or not.
Less volume and market share
Walmart has far less traffic and sales volume than Amazon does.
This means that it’s more difficult to scale up your business on Walmart due to having fewer shoppers overall. As a result, you may have fewer potential customers and need to plan accordingly in order to be successful.
A few more points to consider:
- Amazon tends to be the go-to choice for most online sellers since they have a much larger customer base with more sophisticated tools available for them.
- For instance, Amazon has a much larger selection of categories and products which allows sellers an easier opportunity to come up with unique listings that can gain more attention from buyers.
- Furthermore, Amazon also provides a wide array of advertising and marketing platforms that allow sellers the possibility of promoting their products to potentially even larger markets.
- Since Walmart has fewer shoppers in general, it’s harder for sellers to reach out beyond the existing customer base in order to expand their business operations.
That being said, Walmart is well-known worldwide so having your products listed on their website can help you increase your visibility among potential customers.
Selling on Amazon: Pros
Higher growth opportunity
More shoppers = greater scalability.
Amazon is the world’s largest online marketplace, allowing shoppers to purchase virtually anything they need from the comfort of their home.
Since its inception in 1994, Amazon has revolutionized the way consumers shop, growing into one of the most recognizable brands on the planet. From everyday items like groceries and clothing to electronics and home goods, Amazon offers a wide variety of products with competitive prices and convenient delivery options.
- In addition to consumer shopping, Amazon has become an invaluable resource for entrepreneurs looking to start an ecommerce business.
- With access to millions of potential customers, entrepreneurs can leverage Amazon’s expansive platform to scale their business quickly and efficiently.
- The ability to utilize Amazon’s extensive logistics network also helps reduce overhead costs associated with fulfillment and shipping.
- Entrepreneurs can take advantage of features like Prime Shipping which provides free two-day shipping for orders over a certain amount
- They can also use subscription-based services that allow shoppers to receive products on a regular basis.
For those entrepreneurs willing to put in the effort and dedication required, there is huge growth potential when selling through Amazon.
From leveraging existing customer relationships through targeted advertising campaigns to building out product lines or creating private labels for exclusive products, there are endless opportunities for businesses looking to capitalize on this massive marketplace.
Whether you’re just getting started or have been around for years, utilizing Amazon can provide you with access to a worldwide audience while helping you grow your business more quickly than ever before
Better marketing capabilities
One of the most effective marketing strategies for ecommerce sellers on Amazon is sponsored products.
With this program, sellers can place their products front and center in front of shoppers who are directly searching for specific items.
- Sponsored product ads appear at the top of search results and on related product pages.
- This gives sellers an opportunity to increase visibility and reach more potential customers.
- With the usage of Amazon’s detailed targeting options, sellers can reach the right audience by selecting filters like product categories, budget, bid type, targeting type, and customer profile.
- This allows them to create campaigns tailored to their individual needs and target audiences.
Another great feature that Amazon provides is Amazon Advertising Console (formerly known as “Amazon Marketing Services”).
This console enables sellers to monitor their campaigns closely while also creating new ones with ease.
It provides a comprehensive view of campaign performance data such as:
- Impressions and clicks
- Cost per click (CPC) and cost per thousand (CPM) impressions
- Sales revenue generated from each campaign
- CTR (click-through rate) and ACoS (advertising cost of sale)
By using this tool, ecommerce sellers are able to make informed decisions when it comes to running their campaigns based on actual performance data in order to optimize ROI and maximize sales.
They can also use Amazon’s auto-targeting features which allow them to automatically adjust bids based on predefined targets such as daily ad spend or ACoS goals.
More efficient supply chain
Fulfillment by Amazon (FBA) is a superior supply chain and fulfillment system that has revolutionized the way that customers receive their orders from online retailers.
Instead of relying on individual warehouses, FBA uses Amazon’s extensive infrastructure to handle all aspects of inventory, shipping, and delivery. This includes:
- Quickly processing customer orders
- Managing stock levels across multiple locations
- Providing streamlined shipping services that allow customers to receive their products faster than ever before
With FBA, sellers can save both time and money when it comes to fulfilling orders. By leveraging Amazon’s global presence, sellers can easily access multiple warehouses around the world in order to store their products and manage inventory levels.
In addition, they benefit from reduced freight costs due to Amazon’s negotiated rates with various carriers. Furthermore, FBA also offers competitive pricing for sellers who want to take advantage of its fulfillment services.
Keep in mind:
- The benefits offered by FBA are not limited to cost savings however; it also enables sellers to provide their customers with an unparalleled shopping experience.
- For example, all orders placed with FBA are shipped on the same day and arrive within 5-7 days depending on geographical location.
- Amazon’s Prime program allows customers who sign up for a membership to benefit from discounted shipping rates as well as unlimited two-day shipping on many items.
- Finally, FBA also provides sellers with advanced tracking so that they can keep track of their shipments at all times throughout the delivery process.
All of these features make FBA an attractive option for both retailers and customers alike when it comes to streamlining the online shopping experience.
Selling on Amazon: Cons
Higher selling fees
The fees associated with selling on Amazon are a major downside.
All sellers must consider before investing their time and resources into the platform.
- Amazon charges high service fees for each transaction, which means that sellers have to account for these expenses in their profit margins.
- Additionally, Amazon takes a cut of the product price when listing items on the marketplace, which can reduce profits even further.
- Beyond these fees, sellers must also pay for other services such as Fulfillment by Amazon (FBA) and advertising costs.
FBA is an attractive option for many sellers, but it comes at a cost – typically a fee of around 20-30% of the product’s retail price.
Advertising costs can also cut into sellers’ profits significantly because they must be factored into the overall cost of doing business on the platform. There are additional storage, commission and customer service fees that are charged for every sale made – so this is something else that should be taken into consideration when deciding whether or not to start selling on Amazon.
A few more points:
- Although selling on Amazon can be expensive, it’s still the #1 selling platform due to its convenience and reach.
- Amazon allows you to tap into millions of active customers worldwide and powerful tools at your disposal
- This includes Prime membership eligibility and Buy Box listing placement, opportunities abound for those willing to put in the work required to make a success out of an online business venture.
- Ultimately, potential sellers need to weigh up these expenses against the potential profits they could earn if done correctly.
Complex rules and requirements
Selling on Amazon is NOT as simple as creating an account and listing products.
Amazon has complex rules, requirements, restrictions and compliance guidelines that can make it difficult for sellers to understand them all.
- For example, Amazon requires that products meet certain standards in terms of size, weight, materials used and labeling.
- All products must comply with legal regulations related to safety or health hazards such as chemicals or toxins.
- Sellers must also be aware of additional policies such as restricted categories for selling certain items or performance standards that must be met in order to remain eligible to sell on the platform.
- There are also packaging requirements for certain types of items including shipping materials and instruction manuals.
Additionally, sellers need to keep up with changing laws and regulations which can have an impact on their ability to do business on the platform. Failure to adhere to these policies can result in suspension of accounts or removal from the platform altogether.
Overall, while selling on Amazon provides an opportunity to increase profits, there are several rules and guidelines that must be followed in order for sellers to remain compliant with the platform requirements. It’s important that sellers take the time to understand all of these policies before getting started so they know what they are getting into when they begin selling on Amazon.
Which is better: Walmart vs. Amazon?
While Amazon may have higher traffic volumes and therefore offer more opportunities for growth, it may still be possible for savvy entrepreneurs to find success selling on Walmart.
There’s no “one size fits all” answer here – it entirely depends on the complex dynamics of your business (such as product category, funding, operational challenges, etc).
If you need a helpful advisor to assist with platform selection and supply chain obstacles, reach out to us at ZonPrep. We offer free consulting alongside our supply chain and fulfillment services.
Keep in mind – both platforms can help you take advantage of marketing efforts aimed at their preexisting customer base (or utilizing some of the other features offered by the platform).
Ultimately though, it all comes down to what works best for each seller’s individual needs and goals when deciding between selling on Walmart or Amazon.
