Selling on Walmart vs Amazon: Which is better?

Introduction

Choosing the right platform to sell your products is a pivotal decision for every e-commerce entrepreneur. Two giants dominate the landscape: Amazon and Walmart. Both platforms have their advantages and challenges, so let’s dig into the specifics to determine which might be the better choice for your business.

Overview of Amazon and Walmart

Amazon was established in 1994 as an online bookstore but has since expanded to sell virtually everything. It is known for its vast customer base and innovative technology like Alexa and Amazon Prime. With around 300 million active customer accounts according to Backlinko. The platform offers enormous traffic and sales potential for sellers.

Walmart, known primarily as a huge retail corporation, launched its online marketplace much later. Despite being newer to the e-commerce scene, Walmart.com has made significant strides, leveraging its wide network of physical stores to enhance its online presence. It has rapidly expanded to become a meaningful competitor in the digital retail space.

Market Reach and Customer Base

Amazon: Amazon accounts for over 40% of U.S. e-commerce sales, making it the most preferred shopping site in the U.S according to eMarketer. The platform’s sheer popularity gives sellers access to a wide, diverse pool of customers.

Walmart: Though Walmart’s online presence is growing, it’s still much smaller in comparison. However, Walmart has a unique advantage due to its massive physical store presence and a different demographic that relies on trust in the Walmart retail brand.

Selling Fees and Costs

Amazon: Selling on Amazon can be more costly, largely because of its complex fee structure. Sellers can choose between individual plans, which charge $0.99 per item sold plus additional selling fees, or professional plans, which cost $39.99 per month plus fees. These additional fees can include referral fees, closing fees, and high storage fees, especially for Amazon FBA (Fulfillment by Amazon).

Walmart: Walmart’s Marketplace is simpler in its fee structure, charging only referral fees based on product category. Typically, these are lower than or comparable to Amazon’s, with no subscription fee, making it a potentially more cost-effective choice for sellers.

Fulfillment and Logistics

Amazon: Amazon’s FBA is a hugely popular service, handling storage, packaging, and shipping for sellers. It makes selling easier but can be costly. Furthermore, it provides a competitive edge by offering Prime eligibility, which can significantly boost sales.

Walmart: Walmart offers a similar service through Walmart Fulfillment Services (WFS). While newer and less expansive than FBA, WFS is growing and might be a great choice as it improves and expands. Alternatively, sellers can fulfill orders using their resources, which can be more cost-effective but requires more management.

Customer Trust and Loyalty

Amazon: Amazon has built considerable trust with consumers. The vast majority of Amazon shoppers are Prime members, which indicates high customer loyalty.

Walmart: Similarly, Walmart has a strong trust foothold, especially among those who regularly shop at its physical stores. Walmart’s customer base appreciates their competitive pricing strategy, both in-store and online.

Branding and Customization

Amazon: It can be challenging to build a unique brand on Amazon due to the platform’s standardized layout and the intense competition. However, Amazon does provide tools like Brand Registry and A+ Content to help distinguish your brand.

Walmart: Walmart Marketplace allows more room for branding than Amazon. It’s easier for sellers to stand out due to less competition and more lenient guidelines around branding on product pages.

Who Wins?

Deciding whether Amazon or Walmart is better for selling online depends on various factors specific to each merchant:

• Product category and competition

• Fee tolerance and budget

• Desire for brand visibility and control

• Logistical capabilities

Amazon might be the go-to due to its vast traffic and established FBA logistics, which are perfect for sellers looking for high visibility and who can manage higher fees. In contrast, Walmart could be ideal for sellers who want lower fees, less direct competition, and have a strategic approach to leveraging both online sales and the potential foot traffic of Walmart’s physical stores.

In essence, there’s no definitive winner in the comparison between selling on Walmart vs. Amazon. Each platform has unique strengths and suits different business needs and strategies. Tailoring your strategy to fit either Amazon or Walmart based on your specific business model, budget, and growth plans is crucial to success.