Amazon FBA vs. Walmart marketplace: who is winning where?
Whether you’re a first-time e-commerce seller looking for the right marketplace or are established on one platform and want to diversify, you need to understand the key distinctions between the platforms. The two major e-commerce players, Walmart and Amazon, each have their own unique benefits, so it may be a good idea to take advantage of selling on both to reap the most rewards.
If you’re in this position, you’re not alone. With 39% of Amazon sellers considering also selling on Walmart in 2021, this question is on the minds of many looking to make moves in 2022. Read on to learn about selling on Amazon versus Walmart and see which option may be right for you!
Becoming a seller
If you’re not aware, selling on Walmart is invitation-only. This means that only sellers with a strong track record of selling on other marketplaces will be approved. In addition to this, the approval process can take anywhere from 1-2 weeks, with onboarding taking as long as 2-4 weeks.
Conversely, Amazon is much easier to begin selling on which is what makes it a highly attractive option. To get started with Amazon, merchants sign up and pay a monthly fee without the scrutinizing approval process.
This leads us to our next point….
Because Amazon is easier to join for first-time sellers, there are floods of new merchants onboarding the platform each day. This means more competition which may make it harder to stand out from the crowd. Luckily, there are ways to differentiate yourself, like adding videos and high-quality photos to your listing.
With Walmart, the higher barrier to entry makes it far less competitive than Amazon. To give you some context, Amazon hosts over 2 million active sellers, whereas Walmart hovers at around 151,931.
Amazon’s Professional selling plan is a monthly fee of $39.99. There are no listing fees, although each sale requires sellers to give a “referral fee” to Amazon. These referral fees range between 8% and 20% depending on the category.
Amazon FBA sellers are also required to pay storage fees that are charged separately from the monthly fee, alongside other overhead fees like returns processing, FBA label service, and more.
Walmart doesn’t charge any monthly fee to sell on the platform, although they also have a referral fee system in place with rates similar to Amazon. Walmart’s new Walmart Fulfillment Services (WFS) is comparable to Amazon FBA, with monthly storage and per unit fulfillment fees in place. In addition, Walmart requires merchants to list UPCs for each of their products, which can cost up to several thousands of dollars for a handful of codes.
So far, we’ve seen that Amazon is a clear winner for first-time sellers. With the easy sign-up process and no UPC requirement, the barrier to entry is reasonable and the time frame to get started is tolerable compared to Walmart. Stay tuned for our next article to learn about the next stages of selling, and who wins where!