Retail leaders Walmart and Amazon are no strangers to ecommerce or potential sellers. But what are the differences between selling on Walmart vs. Amazon? And how should online retailers decide where to operate?
According to an eMarketer report, Amazon was on pace to surpass 40% of the U.S. ecommerce market share in 2021. Walmart was ranked second, with about 7% market share, after surpassing eBay for the runner-up position in 2020. Amazon is the current king of ecommerce, but recent efforts from Walmart have proven successful for the company and its third-party sellers. How should your business decide where to sell? Let’s examine some key differences and similarities between the two.
Differences Between Selling on Walmart vs. Amazon
Marketplace Size and Maturity
While most sellers are familiar with both brands, each company continues to find new ways to innovate and provide new opportunities for merchants. It’s no secret that Amazon has evolved far from its beginnings as an online bookstore to become the most-visited virtual marketplace. Amazon Prime alone has over 200 million members, which doesn’t include Amazon shoppers who don’t have a Prime account.
However, Walmart’s is quickly emerging as an industry leader. One report even estimates that Walmart could surpass Amazon in the coming years should Walmart sustain its growth rate. While both companies saw strong ecommerce growth in the early days of the pandemic, the dissatisfaction of Amazon Prime customers whose orders were delayed was widely reported news. With brick-and-mortar stores and fulfillment centers across the U.S., Walmart positioned itself as an alternative as consumers prioritized its speed and availability.
It can be tempting for a third-party seller to focus on Amazon. But as Walmart continues to gain momentum, its smaller marketplace could mean less competition and greater opportunity to reach your target audience.
Amazon has a low barrier to entry for new merchants. To create an Amazon seller account, users from eligible countries need to provide the following:
- Business email address or Amazon customer account.
- Internationally chargeable credit card.
- Government ID (identity verification protects sellers and customers).
- Tax information.
- Phone number.
- A bank account where Amazon can send you proceeds from your sales.
Walmart only allows established businesses to sell on its marketplace. To register, US users will need to provide the following:
- U.S. business tax ID (Social Security numbers are not accepted).
- W-9 or W-8 form and EIN verification letter from the Department of Treasury that verifies your business address or place of physical operations.
- Address or place of physical operations.
- Business address.
- Planned integration method for your product catalog (bulk upload, API, solution provider).
- Primary product categories, catalog size and related information (e.g., total SKUs initially being sold through Walmart, etc.).
For UK merchants, be sure you meet Walmart’s qualifications. These include:
- History of marketplace or ecommerce success
- Fast and reliable fulfillment
- Track record of world-class customer service
- Competitive pricing
- Unique Taxpayer Number (UTR), Corporate Registration Number (CRN), and Form W-8BEN-E
- Enhancement to the Walmart.com assortment
- GTIN/UPC GS1 Company Prefix Number
- B2C US warehouse or an approved 3PL fulfillment provider with shipping and return capability that meets Walmart Service Requirement; a US return warehouse is required
Walmart cites its “curated nature, high standards and requirements” in not accepting every seller to its online marketplace. In addition to meeting all of Walmart’s requirements listed above, sellers must also demonstrate a track record with marketplaces or ecommerce.
Walmart vs. Amazon’s Selling Fees
Each marketplace has specific selling fees that merchants should take into account, as they will impact your profit margin.
Amazon’s potential fees include a selling plan, per-item referral charges, fulfillment fees and other possible costs (such as long-term storage or optional programs like advertising). Selling plans include an individual plan at $0.99 per unit sold or a professional plan for a flat monthly fee of $39.99 (with additional eligibility such as competing for the Buy Box or running PPC ads). Amazon also charges a referral fee for each item sold, typically between 8% and 15%. Merchants may incur additional fulfillment fees for using Fulfillment by Amazon (FBA).
Walmart offers a simpler pricing model based on a fixed referral fee per sale. The referral percentage is determined by the product category and, in some cases, by the product’s total sales price.
Product Restrictions at Amazon vs. Walmart
Before listing your products, you need to determine whether they’re eligible to be sold on the marketplace. According to Amazon, “some categories are open to all sellers, some require a Professional seller account, some require approval to sell, and some include products that cannot be sold by third-party sellers.” Review Amazon’s product category guidelines for insights on specific categories, or visit Amazon’s Seller Central to learn about additional restrictions and how to request approval.
Walmart also has a list of prohibited products and categories that require pre-approval before products can be listed. Another difference between the two companies is Walmart’s pricing rules and policy on automatic unpublishing. According to the company, Walmart is “committed to helping people save money so that they can live better. As part of our effort to deliver on that promise, we have enacted automated rules that identify and remove items with highly uncompetitive prices from Walmart Marketplace.”
Essentially, if your product can be purchased from a competitor at a lower price, Walmart will delist it. This policy includes other sellers on Walmart.com that list a substantially lower price for the same product. Besides ensuring products are eligible for listing on Walmart Marketplace, sellers must closely monitor pricing and adjust accordingly.
Product Listing Requirements
To start selling on Amazon, you’ll need to create a product listing, which includes the following:
- A product identifier, such as a global trade item number (GTIN), universal product code (UPC), international standard book number (ISBN) or European article number (EAN) to specify the exact item you’re selling. You can get a UPC code directly from GS1 or request an exemption.
- A stock-keeping unit (SKU), which is a product identifier you create to track your own inventory.
- Offer details, including price, product condition, available quantity and shipping options.
- Product details, including name, brand, category, description and images.
- Keywords and search terms to help buyers find your product.
If your product matches an existing product listed on Amazon, some product details will automatically be added, like the product identifier. Otherwise, you’ll create a new listing for the product by adding the necessary details.
After Walmart Marketplace sellers are approved, they receive a launch checklist that includes instructions on registering their company. Once registered, merchants can create listings manually via API, with an Excel upload or through a software partner. Since Walmart’s platform is still relatively new, APIs aren’t as developed and can be challenging to manage. Additionally, Walmart requires a UPC for every product, while Amazon does not. If you need to list a product through Walmart that doesn’t have a UPC, you’ll either need to obtain one or submit a request for an exemption.
Different Styles of Seller Support
Amazon’s seller support does not offer a dedicated phone number. Merchants must submit issues via the online portal. Dedicated support reps are available, though it comes at the cost of $1,600 per month and a percentage of sales, with a monthly maximum of $5,000.
For sellers on Walmart using Walmart Fulfillment Services (WFS), a major benefit is the availability of personalized support and fulfillment experts who can offer best practices and recommendations for growth.
Similarities of Selling on Amazon and Walmart
For all of their differences, there are many similarities between the two companies. Both companies have fulfillment centers throughout the world to help with two-day delivery. Both marketplaces also offer advanced listing content services. However, Amazon has additional eligibility requirements for its version.
Each company also offers listing optimization options, while Walmart offers additional support through its Listing Quality Dashboard to help sellers with insights such as discoverability and ratings.
Amazon vs. Walmart: Which Is Better?
Online marketplaces continue to evolve. Now is a great time to learn more about the resources available and determine the next steps for your ecommerce business.
Ultimately, the decision of selling on Walmart vs. Amazon (or both) is best left to the individual seller. Both marketplaces have pros and cons, while eligibility requirements may eliminate some options initially but can also serve as a future growth opportunity. Consider each platform’s offerings in conjunction with your capabilities and goals to determine which is best for you.