Spotting an opportunity to expand its already world-famous brand and capture some of Amazon’s market share, Walmart Marketplace burst onto the scene back in 2009.
Since then, Walmart has become a force to be reckoned in the ecommerce game. And with a 97% growth rate in US online sales, Walmart Marketplace has also become a haven for sellers nervous about Amazon’s ever-changing rules.
Even better, Walmart Marketplace offers a new opportunity for ambitious ecommerce entrepreneurs hoping to expand their businesses by tapping into the brand’s mammoth-sized reputation and huge customer base.
But is selling on Walmart all it’s hyped up to be? And where does Amazon fit in? 🤔
In this post, we get to the bottom of what makes Walmart Marketplace a solid sales channel, and when it makes sense to hop on the Walmart bandwagon. Plus, we’ll dive into the differences between Amazon and Walmart to help you decide whether building a new store is worth the investment.
The Scoop on Selling on Walmart vs. Amazon
- Why Walmart Marketplace?
- Amazon vs. Walmart: Which Marketplace Is Better?
- When Does Selling on Walmart Make the Most Sense?
- Sell on Walmart Marketplace without Messing Up Your Amazon Business
Ready to kickstart your Walmart marketplace journey? SellersFunding can help.
Why Walmart Marketplace?
If you’ve already hit big on Amazon, you might be asking, ‘Why Walmart?’.
Here’s why opening a Walmart Marketplace store could be your next big break:
- Easier to play once you’re in: While it can be tricky to get approved, running a business on Walmart is simpler than on Amazon once you’re in.
- Less competition for sales: Since Walmart Marketplace is relatively new, it currently hosts fewer sellers (think 110,000 sellers compared to a staggering 6.3 million global Amazon sellers). Your brand has a better chance of being seen by your target customer, securing the buy box and getting good ad placements.
- High traffic: Amazon’s traffic may be #1, but Walmart Marketplace’s average visitors aren’t too shabby either. In fact, Walmart rakes in over 100 million unique monthly visits. But the best part? Many businesses are yet to learn about Walmart Marketplace and its fantastic earning potential, which leaves more cash up for grabs for early takers.
- Better stability: When you’ve been on Amazon long enough, you’ll know its constant rule changes, requirements and storage limits can be very stressful. But Walmart Marketplace’s rules have remained fairly constant, and it’s even relaxed its requirement for sellers to be based in the US.
When you’re ready to expand your ecommerce business, check out our fair and flexible funding options specifically designed for sellers.
Amazon vs. Walmart: Which Marketplace Is Better?
There’s a fierce debate raging regarding which platform takes home the trophy as the best marketplace for online sellers.
While both Amazon and Walmart have a lot to offer (and have a lot in common), there are some distinct differences that make each platform stand out.
So, should you join team Amazon or team Walmart?
We’re to help you settle the Walmart vs. Amazon debate once and for all.
Listings, pricing, and fees
When it comes to listing and pricing items online, Amazon takes the top spot.
On Amazon, you have total control over how you price your products, so long as you aren’t using price gouging tactics. Pricing autonomy is useful for helping avoid stockouts, fix stock issues, or to set your products apart as premium offerings.
Unfortunately, you won’t be so lucky on Walmart. This ecommerce titan’s algorithms block any listings with products that have prices higher than Walmart’s average in-store price. The reason for this hard-line approach on pricing? High prices go against Walmart’s pledge to be an affordable retailer.
But that’s not the end of the story.
Walmart reclaims some ground in its simple selling fees. For starters, Walmart has no monthly subscription charge or listing fee, unlike Amazon’s $39.99 USD per month subscription fee for professional sellers and $0.99 for each item sold for individual sellers. Walmart’s referral fee also sits between a comfortable 3% to 15%, whereas Amazon referral fees start at 7.14% and shoot up to 45.9% for some items.
Listings, pricing, and fees winner: DRAW
Inventory and fulfilment
The good news? Neither Walmart or Amazon have strict rules on how many SKUs you can have. In fact, Amazon’s maximum SKU limit is 2 million, whereas Walmart doesn’t have a cap.
Now, the bad news: Amazon is actively restricting how many units sellers can send to its fulfillment centres, making it challenging to manage inventory as your store grows.
However, Amazon makes up for its inventory limits with other parts of its Amazon FBA services.
For example, once you sign up as an Amazon seller, you can ship goods to Amazon’s fulfilment centres from around the globe. Amazon also offers picking and packing, as well as same-day and next-day shipping in many locations. Plus, sellers can send internationally for an additional fee paid by the customer under Amazon’s Global Selling programme. Customers only need to pay $12.99 to access these shipping privileges under Amazon Prime, along with other perks like music, films, and TV shows.
Meanwhile, Walmart’s FBA-equivalent, Walmart Fulfilment Service (WFS), is not on Amazon Prime’s level just yet — but it is a strong contender. Walmart sellers can apply for access to WFS and, if accepted, sellers’ items are shipped under Walmart’s two-day shipping promise. Plus, customers won’t have to pay for shipping on orders over $35.
But Walmart’s delivery scope pales in comparison to Amazon’s international reach. WFS covers only 50 US states and some US territories like the Virgin Islands.
WFS also comes with a pretty big catch — goods must be shipped to Walmart’s fulfilment centres from within the US, meaning additional admin burdens and costs for sellers that manufacture internationally.
Inventory and fulfilment winner: AMAZON (for now…)
On a mission to become “Earth’s most customer-centric company”, it’s no secret that Amazon expects its sellers to offer unbeatable customer service.
That’s why Amazon has strict rules on things like product quality, images, returns, stock turnover and defect rates. For example, sellers must maintain an order defect rate of less than 1% and how well they do is reflected in their store’s Inventory Performance Index (IPI) Score, a rating that aggregates each store’s performance. A low IPI score can have dire consequences like inventory limit restrictions and even account deactivation.
Sounds harsh? You haven’t seen anything yet.
Walmart expects nothing but the best for its customers, and they mean business. In fact, you run the risk of being thrown off the Walmart platform if you don’t meet their standards.
Here are just a few standards to hit if you want to sell on Walmart Marketplace:
- Your goods can’t be more expensive on other sites.
- You must answer customer queries within 48 hours. These responses must be written by a real person and be high-quality replies.
- You must offer phone support in English from an office line and offer voicemail when you’re unavailable.
- You must respond to voicemails within 48 hours.
Seller standards winner: DRAW
Amazon vs. Walmart Marketplace: The verdict
If you’re willing to learn and abide by the rules, why choose?!
You can have the best of both worlds to get more customers and grow. In ecommerce, issues like account suspensions and 3PL disasters can bring your store to a standstill. When you have another selling platform to turn to, you can keep the cash rolling even when you hit the inevitable speed bump.
When Does Selling on Walmart Make the Most Sense?
Running a Walmart store certainly has its challenges, but the massive benefits to your brand can make it worth the effort.
Here are a few common scenarios where expanding to Walmart Marketplace might make sense:
- You’ve had enough of Amazon: Perhaps you’ve had a few run-ins with Amazon over the years, like being rejected to sell restricted items or having your inventory limits cut. If the scars have broken your Amazon love affair, Walmart can help you turn over a new leaf in your ecommerce business.
- You’re ready to expand: If you feel you’ve optimized your Amazon store enough to warrant looking for other sales avenues and you have enough cash to make the leap, selling on Walmart could be a good move.
- You want to target a new customer segment: Want to increase the odds of getting your products in front of your target market? Walmart could be for you. But make sure you get in soon, because a whopping 39% of Amazon sellers are already considering selling on Walmart in 2021.
- You’ve got a background in ecommerce: Walmart looks for businesses with previous selling experience, so you can use your existing store(s) and experience to your advantage.
- Your prices are competitive: Price points are a huge deal if you want to sell on Walmart marketplace. If you can compete with the prices on Walmart and other online stores, selling on Walmart makes sense.
- You have sufficient ecommerce funding: Setting up on Walmart could involve extra costs than those you’re used to on Amazon. For example, you may have to use US-based agents or suppliers to ship your goods to Walmart’s fulfilment centre and hire additional customer service support to meet Walmart’s strict requirements. If you can access capital to test Walmart Marketplace and are willing to invest in tools to help you succeed, it’s all systems go!
Sell on Walmart Marketplace without Messing Up Your Amazon Business
Despite popular belief, selling on marketplaces doesn’t have to be an either-or situation.
A controlled expansion from Amazon to Walmart can help you reach new audiences, test more products and create additional revenue streams to grow your brand.
Don’t let Walmart’s strict requirements scare you away. You’ve already sold successfully on Amazon, so there’s no doubt you have what it takes to make a splash on Walmart too.
Use your experience to position your Walmart store a cut above the rest and invest in technology to help you rise faster. Soon, you’ll have another profitable sales channel pushing you closer and closer to your ecommerce dreams.
Thinking about selling on Walmart Marketplace? SellersFunding can help make your goal a reality.
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