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 with in the e-commerce 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 should YOU sell on Walmart? 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.
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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:
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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.
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 e-commerce 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’s referral fees start at 7.14% and shoot up to 45.9% for some items.
The good news? Neither Walmart nor 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 fulfilment 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.
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:
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 e-commerce, 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.
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:
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 e-commerce dreams.
Thinking about selling on Walmart Marketplace? SellersFi can help make your goal a reality.
