A Comprehensive Platform Comparison Guide for 2023: Walmart vs. Amazon

Amazon and Walmart, two of the largest eCommerce marketplaces in the US, have different histories in the retail industry and eCommerce world. However, currently, they are nearly equivalent in terms of their online dominance.

For business owners transitioning from brick-and-mortar to online sales, the question arises: “Which marketplace is best for my business?”

Despite their unique beginnings, both Amazon and Walmart have intriguing stories of how they became eCommerce giants. As a seller, determining the ideal platform to sell on requires consideration of factors such as cost-effectiveness and potential profitability, as well as the ability to reach your target audience and business objectives efficiently.

In this article, we will delve deep into both Amazon and Walmart, presenting a captivating comparison of these two eCommerce behemoths. So, grab a notepad and pen/pencil, as you will likely need to take some serious notes.

Walmart: Overview

Sam Walton established Walmart in Rogers, Arkansas in 1962 with a basic concept of providing more goods at lower prices. Although the enterprise encountered difficulties initially due to high lease expenses, Walton overcame the obstacle by procuring supplies at lower costs than those used by other businesses.

In its initial year of operation, the business experienced a 45% increase in sales, amounting to $105,000 in revenue. Subsequently, revenue increased to $140,000 and $175,000 over the next two years.

At present, Walmart has a widespread presence, operating retail stores and eCommerce websites in roughly 24 countries, with a total of 10,500 stores and clubs under 46 banners.

As of 2022, Walmart’s global annual revenue reached an impressive $568 billion, with net eCommerce sales amounting to $47.8 billion, representing an 11% rise compared to the previous year. Additionally, the company’s net income from its retail stores in the USA was $13.9 billion.

Currently, Walmart stands as the second-largest eCommerce marketplace in the USA, with a market share of 6.3%, surpassing eBay (3.5%), which has fallen to the fourth position. This rapidly growing marketplace has over 150,000 sellers, marking a 66% increase from 2021, and draws in more than 100 million unique monthly visits.

In 2016, Walmart joined forces with Jet.com to expand its online presence. However, in 2021, Walmart ceased operations of Jet.com to concentrate on growing Walmart.com.

Walmart: Demographic

Walmart’s affordable pricing strategy attracts a customer base composed mostly of rural families belonging to the low and middle-income brackets. In terms of the sellers on Walmart, 26.8% earn between $25,000 to $49,900 monthly, 26.1% earn $25,000 or less, and roughly 11% earn between $50,000 to $74,900. While Walmart’s primary audience comprises individuals between 45 to 54 years (20.6%) and those aged 65 years and above (20.4%), the rise in popularity of Walmart.com among Gen Z has resulted in a surge in demand for products sold on the website.

List of the products you can sell on Walmart

• Personal computers
• Wheels and tires
• Automotive and power sports
• Jewelry
• Musical instruments
• Apparels
• Beauty products
• Gourmet foods
• Furniture
• Camera
• Consumer electronics
• Cell phones
• Large appliances
• Video game consoles
• Personal and Health care
• Pet care supplies
• Sunglasses
• Toys
• Shoes and handbags
• Groceries
• Kitchen items
• Baby care products
• Books
• Home and Garden
• Travel accessories
• Music, DVDs
• Sports equipment and goods
• Handy tools

Amazon: Overview

In 1994, Amazon was founded as a bookstore operating out of a small garage located in Bellevue, Washington. Over time, Amazon has expanded its offerings and currently provides online sales for a vast range of products, spanning more than 25,000 categories, including electronics, clothing, groceries, and more.

Within three years of its establishment, Amazon became a publicly traded company, and in 2022, its valuation surpassed $700 billion. Furthermore, Amazon has secured a 40% share of the overall US market, with its closest competitor, Walmart, only holding a 6.3% share.

With more than 300 million monthly active users in the USA, Amazon dominates the eCommerce marketplace and extends its reach to over 180 countries worldwide, with one million active US-based users alone. By listing products on Amazon, sellers can forego the need for a separate website and access an extensive global market.

Amazon further supports sellers by offering various resources to enhance their sales on the platform, such as workshop training, events, paid advertising, and more. In contrast to Walmart’s preference for established businesses, Amazon invites individuals and companies of all sizes to list their products on its vast marketplace.

Amazon: Demographic

Amazon’s largest consumer group is aged between 33 to 42 years, representing 80% of its total consumer base. Following closely are the millennials (26 to 41 years) and GenZ, accounting for 57% of Amazon’s overall consumer base.

Although the majority of Amazon’s consumers earn an annual income of at least $100,000, it’s essential to note that Amazon continues to cater to a broad range of consumers worldwide.

List of products you can sell on Amazon

• Electronics
• Gift cards
• Video games
• Books
• Jewelry
• Home office furniture
• Cookware and cutlery
• Sport equipment
• Music instruments
• Laptops
• Home Entertainment
• Fitness equipment and apparel
• Fashion apparel
• Kitchenware
• Pet supplies
• Skincare and beauty products

Amazon Vs Walmart: Set up eCommerce Product Listing

To be able to sell products on Amazon or Walmart, you are required to create a seller’s account. The steps to create the account are outlined below.

Setting up a storefront on Amazon

Sellers on Amazon have the option to set up an Individual or a Professional Account depending on their business type.

The Amazon Individual Account is ideal for those who wish to sell a single product or test the platform before committing to the Professional Account. In contrast, the Professional Account is better suited for businesses with significant inventories that are committed to the marketplace.

To set up a merchant account on Amazon, follow these six steps: create a Seller Account on Amazon, register your business with Amazon Brand Registry, familiarize yourself with Amazon’s policies and guidelines, select a monthly plan to start selling, create and optimize your product listing, and finally, start selling.

To optimize your product listing on Amazon and appear in search results, focus on incorporating relevant keywords into your product description, title, and images. Unlike Walmart’s preference for short, high-volume keywords, Amazon favors keyword-rich content.

Utilize DoMyShoot to create high-quality product images on Amazon that adhere to the platform’s guidelines. Additionally, Fulfillment by Amazon (FBA) is a convenient feature that enables businesses to outsource product shipping, delivery, and returns, resulting in a high level of customer trust in the quality of the products.

FBA, a service provided by Amazon, manages the entire process of collecting the product from the manufacturer, packing it, storing it, and delivering it to the customer’s address, ensuring a seamless and speedy experience for both the seller and the buyer. However, sellers need to pay for this service, and we will elaborate on Amazon’s fees later in the article.

Setting up a storefront on Walmart

To list your product on Walmart and boost its chances of conversion, here are five steps you can take:

1. Apply for selling privileges on Walmart.com
2. List your product on the Walmart marketplace
3. Improve your conversion rate by utilizing Walmart Fulfillment Services (WFS), incorporating the Pro Seller Badge, and adding Promotional Tags to your listing.
4. Launch your product
5. Enhance your listing’s quality score through paid advertising and featuring your product in the Walmart Store.

If you have all the necessary documents prepared, setting up your Walmart seller account should only take around 10 to 15 minutes. Below are the required documents/prerequisites to create your seller account:

1. US Business Tax ID (excluding SSN)
2. W9 form to verify the US business address or the physical location address of your business.
3. The address of your business’s physical operation.
4. Selection of the product categories you will be selling.

Once you have applied to sell on Amazon, it’s important to properly list your product by:

1. Creating a product title that includes a short, high-volume keyword. Unlike Amazon, Walmart prioritizes listings with less emphasis on keyword density.
2. Adding 7 to 8 images to your product listing. In addition, Walmart permits the addition of Rich Media, such as videos and informational PDFs, to further inform customers about your product.
3. Completing the Attribute Field by providing as much information as possible. Walmart’s algorithm tends to favor listings that have more attributes.

Walmart’s WFS (Walmart Fulfillment Services) is comparable to Amazon’s FBA (Fulfillment by Amazon) program. WFS takes care of the storage, pickup, packaging, and shipping of your products, eliminating the need for you to handle these aspects.

The Pro Seller Badge offered by Walmart assures your customers of the quality of your products, leading to repeat purchases from existing customers and building trust with new customers. However, Walmart has specific criteria that sellers must meet to obtain this badge. While there are no added benefits to having the badge, it can enhance a seller’s reputation among potential customers.

As Walmart frequently updates its policies and product guidelines, it’s crucial to stay up-to-date with these changes and continue to optimize your product listings for optimal results in the marketplace.

Amazon Vs Walmart: Selling Fees

Sellers who wish to establish a storefront on Amazon or Walmart must bear a variety of fees. Compared to Walmart, Amazon has more stringent requirements when it comes to fees. However, due to Walmart’s business model, sellers must carefully strategize their pricing before listing products on the platform to ensure profitability. We will delve into the specific selling fees of both platforms in the following section.

Amazon

Sellers using Amazon’s Individual account are charged $0.99 per item sold, while those using the Business account are charged $39.9 for each item sold. In addition to these fees, Amazon also levies additional charges, such as an insertion fee of $0.35 when more than 250 products are uploaded per month.

The referral fee charged to sellers is a percentage that varies depending on the category of the product being sold. Each category has its own referral fee. In addition to the fees mentioned above, there is a charge of $0.30 per order for every product sold on Amazon.

Sellers can also choose to run sponsored ads on Amazon, which incurs additional costs. New sellers can receive $200 in free ad credit and 5% back on the first $1 million in branded sales.

Furthermore, depending on the product category and services selected by the seller, there may be additional charges for rental book services, aged inventory surcharges, monthly inventory storage fees, closing fees for specific product categories, order fulfillment fees (including Fulfillment by Amazon if selected), refund administration fees, and special handling fees.

Finally, payments to sellers for their products sold on Amazon are made via ACH (Automated Clearing House) or EFT (Electronic Funds Transfer), and bank charges may be incurred depending on the seller’s bank, which is not the responsibility of Amazon.

Walmart

Creating an account on Walmart is free of charge, however, similar to Amazon, there is a referral fee that varies depending on the category of your product. These fees are only charged when you make a sale. Referral fees differ for each product category, for example, Apparel and Accessories have a 15% fee while Cell phones/Mobile phones have an 8% fee. If you notice that you have been charged an incorrect referral fee, double-check that you have listed your product under the correct category.

To process payments, Walmart has partnered with Payoneer. To avoid an additional $1.50 charge when withdrawing funds from your Payoneer account, make sure to register through Walmart’s Seller Center instead of directly with Payoneer.

It is worth noting that all items sold on Walmart.com are subject to sales tax, and local and state tax charges are subject to change at any time.

It is important to note that Walmart’s primary objective is to provide customers with the most affordable prices for products. Therefore, when planning your pricing strategy for selling your product at Walmart, make sure to factor in a reasonable profit margin.

In addition to the product cost, there are other expenses to consider when selling at Walmart, including labor costs, overhead costs (such as tools, electricity, and water), Walmart marketplace fees (referral fees and sales tax), shipping costs, return charges, and customer service charges.

To maintain a positive relationship with Walmart, it is recommended to keep a ready supply of stock and follow their pricing policy to avoid the risk of having your listing suspended.

Which platform works best for you?

The following outlines the upsides and downsides of selling products on Amazon and Walmart.

Advantages of selling on Amazon include easy sign-up for sellers, no price constraints on product listings, and no requirement for prior selling experience. Additionally, Fulfillment by Amazon (FBA) permits the import and dropshipping of products from outside the US, and Amazon has a larger market share in the US, particularly among Gen Z and Millennial shoppers.

On the other hand, Amazon sellers may incur recurring monthly fees, face intense competition from numerous vendors selling similar products, and contend with pricey FBA costs and additional fees on their products.

In contrast, the advantages of selling on Walmart include the absence of recurring monthly fees and other fees aside from referral fees, as well as the potential for less competition on the platform for early sellers. Adding the Rich Media feature can also provide customers with more information about a product. Moreover, Walmart is the fastest-growing marketplace in the US.

However, Walmart sellers must ship only from within the US, face a smaller market share compared to Amazon, need approval before signing up, and have favoritism towards established sellers. Additionally, they must comply with all pricing rules and contend with less traffic compared to Amazon.

Final Words

Making a choice between the two best marketplaces in the country can be a difficult decision, but we trust that you now have all the necessary information to make a decision. We hope you’ve taken notes!

Regardless of whether you choose to sell your product on Amazon or Walmart, it’s important to read the platform’s policies, optimize your product listing using SEO keywords and product descriptions, and upload high-quality images that adhere to their image guidelines.

Apps like DoMyShoot can assist in creating high-quality images for marketplaces such as Amazon, Walmart, eBay, Facebook, and others. With DoMyShoot, you can easily generate images that meet Amazon’s product image guidelines, select from over 1000 background images, and receive your product images within 24 hours via email. Request a DoMyShoot demo today!