Walmart or Amazon: Which Marketplace is Right for Your Business?

Are you thinking about expanding your e-commerce business but aren’t sure which marketplace to choose? Whether you’re already selling online or just starting, one of the biggest decisions you’ll make is choosing the right platform. The most common question among e-commerce entrepreneurs is, “Should I be selling on Walmart or Amazon?”

This is a crucial decision that could shape the future of your business. Both platforms offer unique opportunities, but selecting the right one depends on your goals, business model, and target audience. In this guide, we’ll compare Walmart and Amazon, covering their key differences, advantages, and challenges, so you can make the most informed choice.

Selling on Walmart: A Growing E-commerce Player

Walmart, a global retail powerhouse, has been rapidly expanding its online marketplace. Sellers on Walmart can list products alongside Walmart’s own inventory, making it an appealing platform for businesses seeking new opportunities.

Is It Profitable to Sell on Walmart?

Although Walmart’s e-commerce presence is smaller than Amazon’s, it’s still a profitable marketplace. Jungle Scout’s State of the Walmart Seller Report reveals that 95% of Walmart marketplace sellers are thriving, with more than 50% earning over $100,000 in yearly revenue.

Key Benefits of Selling on Walmart

• No Subscription Fees
  One key advantage of selling on Walmart is the absence of monthly subscription fees. Unlike Amazon, which charges a monthly fee for professional sellers, Walmart only takes a referral fee (8%-15%) from your sales. This allows you to retain more profit and reinvest in your business.
• Low Competition
  With around 150,000 active sellers, Walmart has far fewer competitors than Amazon’s 1.5 million sellers. Less competition makes it easier to capture customer attention and grow your market share.
• Access to New Audiences
  Walmart’s customer base includes a unique segment of budget-conscious shoppers and in-store customers. By selling on Walmart, you can tap into a diverse audience that might not frequent on Amazon.
• Streamlined Checkout Process
  Walmart offers a smooth and efficient checkout process with features like in-store pickup, Walmart Pay, and fast shipping via Walmart Fulfillment Services (WFS).  A streamlined shopping experience can enhance customer satisfaction and lead to increased sales. 

Drawbacks of Selling on Walmart

• Lower Profit Margins
  Walmart’s focus on low prices can make it hard for sellers to maintain high profit margins. Sellers may need to lower prices to stay competitive, potentially reducing profits.
• Smaller Customer Base
  Walmart’s marketplace, while growing, still has fewer monthly visitors than Amazon. As a result, Walmart sellers may not experience the same sales volume as those on Amazon.
• Limited Fulfillment Options
  Although Walmart offers its own fulfillment service (WFS), it’s not as developed as Amazon FBA. With fewer fulfillment centers and stricter eligibility requirements, it can be harder for new sellers to take advantage of Walmart’s logistics network.

Selling on Amazon: The E-commerce Giant

Amazon is a household name in e-commerce, dominating the market with over 300 million active users. While its vast audience is a major draw, selling on Amazon comes with its own set of challenges.

Key Benefits of Selling on Amazon

• Massive Customer Base
  With millions of shoppers visiting Amazon daily, sellers have access to an enormous pool of potential customers. This makes Amazon an attractive option for businesses looking to maximize their reach.
• Amazon FBA (Fulfillment by Amazon)
  Amazon’s FBA service is a game-changer for sellers, allowing you to store your products in Amazon’s warehouses while they handle packaging and shipping. This is a great option for businesses that want to focus on growth without getting bogged down in logistics.
• Advanced Marketing Tools
  Amazon provides a variety of marketing tools such as Sponsored Products, Lightning Deals, and more. These tools can significantly boost your product’s visibility and help drive traffic to your listings.
• Higher Profit Margins
  Amazon’s larger customer base can lead to higher sales volumes and better profit margins, depending on your pricing strategy and product category.

Drawbacks of Selling on Amazon

• Higher Selling Fees
  Amazon’s fees are more complex and often higher than Walmart’s. In addition to referral fees (8%-15%), sellers also pay for a subscription plan and may incur storage and fulfillment fees if they use FBA. These costs can significantly impact your overall profit margins. 
• Increased Competition
  With millions of sellers competing on Amazon, it can be challenging to stand out. This crowded marketplace requires strong product optimization, effective advertising, and competitive pricing to succeed.
• Complicated Order Management
  Managing orders on Amazon can be more complex, especially for sellers using multiple fulfillment options like FBA and Seller Fulfilled Prime (SFP). While these services offer flexibility, they require more oversight and effort than Walmart’s simpler system.

Walmart vs. Amazon: Key Considerations

Before you choose between Walmart and Amazon, consider the following factors:

• Fees: Amazon’s selling fees tend to be higher due to additional costs like FBA, while Walmart has no subscription fees but still charges referral fees.
• Profitability: Amazon offers access to a larger audience, which can lead to more sales, but Walmart’s lower competition may provide a better opportunity for standing out.
• Fulfillment: Amazon’s FBA is more established and accessible to all sellers, while Walmart’s WFS is still developing and limited to experienced sellers.
• Advertising: Both platforms offer advertising tools, but Amazon’s range of marketing options is broader and more advanced.

Conclusion: Which Platform Should You Choose?

Both Walmart and Amazon offer unique opportunities for online sellers. Amazon’s vast customer base and advanced fulfillment options make it a strong choice for businesses looking for volume and reach. On the other hand, Walmart’s lower competition and growing e-commerce presence present a great opportunity for businesses aiming to stand out and reach new audiences.

If you’re an Amazon seller looking to diversify or considering entering the Walmart marketplace, Pro Seller Marketing can help. Our team of experts specializes in Amazon and Walmart marketplace management, helping you navigate both platforms with ease and grow your business.

Contact Pro Seller Marketing today and discover how we can help you thrive on Amazon or Walmart!