Written in partnership with SellCord.
Amazon has long been recognized as the dominant force in the e-commerce industry, revolutionizing the way people shop online and setting new standards for customer convenience and satisfaction. However, in recent years, Walmart has rapidly emerged as a strong competitor to Amazon’s dominance, challenging its position and reshaping the e-commerce landscape.
In 2022, Amazon boasted $50.9B in total ecommerce sales compared to Walmart’s $19.2B. However, Walmart saw year-over-year e-commerce sales growth in the U.S. of 11.98%, making it the fastest-growing online marketplace today. Their retail dominance plays a factor too, since selling on Walmart.com can be a great way to get your product onto Walmart’s shelves. With 4,630 stores in the United States alone, the potential is massive.
Combined with the fact that Walmart’s Marketplace is less competitive among sellers (more on that below), there’s no surprise that a growing number of Amazon sellers are thinking about expanding their reach to Walmart’s marketplace as the platform should continue to narrow the gap in the coming years.
While both platforms offer tremendous opportunities, understanding the unique characteristics of each is crucial if you want to thrive. We’ll go over some of the key differences, helping you decide if selling on Walmart.com is the right choice for your business.
Seller Requirements and Onboarding
The requirements for becoming a seller on Walmart and Amazon differ significantly. Amazon employs a relatively straightforward process, allowing individual sellers to register and start selling quickly. In contrast, Walmart has a more selective approach, with a stringent vetting process for third-party sellers. They prioritize established businesses with proven track records and often require sellers to go through a detailed application process.
This rigorous onboarding process at Walmart ensures a curated marketplace, enhancing trust and credibility for sellers and customers alike for Walmart’s extensive and loyal customer base. While Amazon has 6.3M third-party sellers, Walmart only has around 150,000, making it significantly easier for merchants to carve out niches for themselves on the platform and bring in additional revenue.
The approval process for selling on Walmart can be rigorous and time-consuming for those new to the industry, but if you already have a proven track record on Amazon, you will have an advantage since you already have all of your requirements in order.
Of course, this also means that it’s critically important to maintain good seller metrics once you’re on the platform. That means minimizing order cancellations, refund rates, late deliveries, and other demerits. Most of the time, these are caused by a lack of a good order management system, so it’s important to stay on top of your numbers.
Both Amazon and Walmart provide fulfillment services, namely Fulfillment by Amazon (FBA) and Walmart Fulfillment Services (WFS), respectively. However, there are differences in how these services operate. FBA offers sellers the advantage of leveraging Amazon’s extensive logistics network, including warehousing, inventory management, and shipping.
Walmart’s WFS is still evolving, with its primary focus on providing competitive shipping rates to sellers at the moment, but the potential is great; Walmart can leverage its existing massive chain of stores to serve as fulfillment locations as well. While FBA has a well-established reputation, WFS offers the potential for cost savings and improved control over the fulfillment process. The good news is that Walmart’s selling fees are simpler than Amazon’s:
Amazon – You pay $39.99 a month for their Professional selling plan, and there’s a referral fee on each sale, usually amounting to 8% to 15% (with some categories being as high as 20%). Some categories even have separate service or variable closing fees, not to mention the FBA fulfillment fees, label service fees, and other related services that can quickly inflate your costs if you don’t have a good understanding of how they work.
Walmart – No monthly or onboarding fees to worry about, you only have to pay the referral fees, which are comparable to Amazon’s. The Walmart Fulfillment Services (WFS) are quite straightforward and easy to understand compared to FBA, plus they have a fee calculator to help you get accurate estimates on storage and fulfillment costs.
Walmart has partnerships with major carriers, so you can get good rates on inbound shipments, similar to Amazon. Aside from that, Walmart is rolling out their new Inventory Transfer Services (ITS), which will allow sellers to send their products to one centralized location to simplify their logistics, improve inventory availability, and offer faster shipping times. This helps make it possible to offer two-day or same-day shipping for more products.
Walmart’s accessibility and services, combined with a good inventory management system, will allow you to spend less time wrangling your inventory and more time on actually running your business.
Advertising on the Platform
Walmart Sponsored Search is the retail giant’s answer to Amazon Sponsored Products. While both are PPC advertising programs, there are a number of key differences that even experienced sellers need to pay attention to.
1. Content Quality – Walmart places a much greater emphasis on content quality. It analyzes listings and prioritizes those with a Listing Quality Score of over 60% when serving an ad. This rewards sellers who invest in expertly-crafted copy and proper optimization (as opposed to cruder tactics like mass keyword stuffing).
2. Ad Types – Amazon has more spaces for ads across their pages to cater to every stage of the buying cycle, while Walmart tends to have more organic results. There are also fewer keyword targeting options on Walmart – don’t expect product-specific targeting, for instance. Fortunately, the number of sellers making use of Walmart Sponsored Search is still comparatively low, so there is not much competition over the limited ad spots.
3. Campaign Control – One of the positives of selling on Walmart is that you have more control over the ad placements. By using the Manual campaign option, you can choose to exclude search carousel ads or buy box ads if you wish. Not only that, you can even use bid modifiers on the device level, ensuring your ads show up on the platform that matters most to you.
4. Ranking – Ranking for high-volume keywords on Amazon can be very competitive and expensive, especially if you’re targeting the top keywords. On Walmart, you can get to the top of the search results relatively easily if your listing is optimized well and you have a good PPC strategy.
Knowing the key differences between selling on Walmart and Amazon is crucial for any business looking to establish a successful online presence and diversify its sales channels. While both platforms offer immense opportunities, they have distinct characteristics that can significantly impact a seller’s strategy and success.
Ultimately, sellers must evaluate their business goals, target audience, product catalog, and advertising needs to determine the most suitable platform for their online sales. Adapting strategies to the unique features and requirements of Walmart and Amazon can maximize sales potential and help businesses thrive in the competitive world of e-commerce.
There are always going to be hurdles and initial growing pains when you’re starting on a new platform, but these are well worth it. Walmart is a rapidly growing marketplace with very low-cost advertising, and selling on their platform can even help get your brand into their stores. The potential upsides are an attractive proposition for sellers of any size. If you don’t know where to start, however, or if you simply need some extra assistance with the day-to-day tasks of running your Walmart business, our team can step in.
SellCord is a Walmart-approved partner agency exclusively focused on launching and managing brands on Walmart.com. We work with hundreds of brands across all categories, assisting them with the onboarding stage, setting up their product listings, managing their ad campaigns, and more. As a team of experienced sellers ourselves, we gained a deep understanding of what works best on the marketplace, and we help others replicate that same success.
Michael Lebhar, CEO and Co-Founder, SellCord
Michael Lebhar is an accomplished entrepreneur and ecommerce specialist. He has been selling on Amazon since the 10th grade, and like many others, he fell in love with the process of growing a brand from the ground up. Now he is focusing on Walmart.com, where he has seen a lot of success with his own brands as well as scaling hundreds of clients’ brands on the marketplace.