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When it comes to retail giants, few names are as iconic as Walmart and Amazon. Both have reshaped the way we shop, offering vast selections of products and unparalleled convenience, online and offline. While Amazon dominates the e-commerce landscape with its extensive reach and technological prowess, Walmart is quickly catching up with its robust online and physical retail presence.
For entrepreneurs who are considering selling on Walmart vs Amazon, read on to discover the advantages and opportunities each platform offers, and find out which one can help you achieve your e-commerce aspirations. This blog delves into the competitive landscape between these two titans, comparing their market positioning, customer bases, fulfillment services, and growth opportunities.
What is Walmart?
Walmart is one of the world’s largest retail corporations, known for its extensive network of physical stores and rapidly growing e-commerce platform. Founded in 1962 by Sam Walton, Walmart operates more than 10,500 stores and clubs under 48 banners in 24 countries and e-commerce websites. Walmart’s mission is to save people money so they can live better, providing a wide range of products from groceries and clothing to electronics and household items at competitive prices.
What is Amazon?
Amazon is a global e-commerce giant founded by Jeff Bezos in 1994. Initially started as an online bookstore, Amazon has evolved into one of the largest online marketplaces in the world, offering a vast array of products including electronics, apparel, home goods, groceries, and more. Amazon operates numerous international marketplaces, including those in the US, Canada, Europe, Japan, and India, among others. In addition to its retail operations, Amazon offers services like Amazon Web Services (AWS), Amazon Prime, and Amazon Marketplace for third-party sellers.
Market Overview
Market positioning
Walmart
Walmart is a global retail giant known for its extensive network of physical stores across the United States and other countries. It focuses on offering a wide range of products at competitive prices, targeting budget-conscious shoppers.
While Walmart has a long history in the retail industry, it is considered a newcomer in the e-commerce world. To compete with e-commerce giants, especially Amazon, Walmart started investing heavily in its online platform around 2016. Until now, Walmart has grown to become the second-largest online retailer platform in the US.
Amazon
Amazon started as an online bookstore but has expanded into a massive online retailer selling almost everything imaginable. It dominates the e-commerce space globally and has diversified into various services like Amazon Web Services (AWS), Prime Video, and more.
Known for pioneering e-commerce, Amazon excels in online retail, offering convenience through fast shipping, extensive product selection, and competitive pricing. The dominance of Amazon in the market is backed up and bolstered by Amazon’s extensive seller network and prowess in technologies and AI.
Market Share
Amazon’s dominance in e-commerce is unquestionable with a substantial lead over the second-largest competitor, Walmart, in market share.
Amazon
- As of 2023, Amazon holds approximately 37.6% of the U.S. e-commerce market share, making it the dominant player in the online retail space.
- The net sales of Amazon amounted to $574.8 billion in 2023 with a net income of $30.4 billion
Walmart
- Walmart’s online market share is significantly smaller, at around 6.4% of the U.S. e-commerce market in 2023.
- According to its fiscal year 2024 report, Walmart generated a revenue of $648.1 billion, up by 6% from $611.2 billion with a net income of $16.27 billion.
Customer Base
Amazon
This platform appeals to tech-savvy consumers who value the convenience of online shipping. Besides, the platform’s extensive product selection ensures that it meets the needs of an extensive and highly diverse customer base of various age groups and lifestyles.
Walmart
Walmart serves a wide demographic, including families, seniors, and individuals across various income levels. Its affordable pricing attracts budget-conscious shoppers.
With an extensive physical retail network of 10,500 stores in 24 countries, Walmart can provide convenient and immediate access for shoppers across the US as it allows customers to shop online and pick up in-store quickly without waiting for the delivery.
Growth Projections
According to a Deloitte article, one of the significant trends shaping the retail industry in 2024 is the rise of hybrid retail. Walmart is the leading retailer in blending digital and physical channels to create seamless and engaging consumer experiences. This trend will give Walmart an upper hand over Amazon as Walmart has already established a large brick-and-mortar footprint.
Walmart’s online marketplace is less saturated compared to Amazon, offering growth opportunities for new sellers. Additionally, as Walmart continues to invest in its e-commerce platform, sellers who join early may benefit from the platform’s growth and expansion.
Competition
It is estimated that Walmart has around 150,000 sellers on its online marketplace (2023), while Amazon registers around 1.9 million active sellers.
Amazon’s massive marketplace means high competition among sellers, making it challenging to stand out without strong marketing strategies.
Moreover, Walmart has a stricter and more selective onboarding process, which limits the number of potential competitors. As a result, the competition is lower, providing opportunities for new sellers to gain traction.
How about the pricing competition?
A majority of the sellers on Amazon are based abroad, mostly from China. These abroad sellers have access to cheaper products and labor, which allows them to better compete in terms of pricing. Moreover, Amazon also allows sellers to apply automatic pricing which makes it easier to adjust the price to compete against other competitors.
On the other hand, Walmart’s sellers are mostly located within the US, which makes room for fair competition in terms of pricing. Moreover, Walmart’s policy also limits the repricing frequency to once per day. This way, it won’t allow dynamic pricing and requires sellers to be more deliberate with their pricing.
Fulfillment Operation
Fulfillment options
Amazon and Walmart are two giants in the retail industry, each offering its own robust fulfillment services that cater to online sellers.
Amazon’s Fulfillment by Amazon (FBA) and Walmart Fulfillment Services (WFS) provide comprehensive solutions, including storage, packing, shipping, and customer service.
Other than providing fulfillment solutions for sellers, both Amazon and Walmart also allow merchants to opt for taking care of the logistics themselves.
To give you a better idea of how each platform can help you with their fulfillment processes, we will compare FBA and WFS:
Fulfillment by Amazon (FBA)
Fulfillment by Amazon (FBA) is a service that allows sellers to store their products in Amazon’s fulfillment centers. Amazon handles the packing, shipping, and customer service for these products.
- Storage: Sellers send their inventory to Amazon’s warehouses, where it is stored until sold.
- Packing and Shipping: Amazon manages the entire packing and shipping process, ensuring quick and reliable delivery.
- Customer Service: Amazon provides 24/7 customer service and handles returns on behalf of the seller.
- Amazon Prime: Amazon Prime is a subscription-based service that offers numerous benefits to its members. One of which is the free two-day shipping service. If you fulfill via FBA, your customers who are Prime members can also enjoy this benefit and your products will be delivered within the two-day timeframe.
Walmart Fulfillment Services (WFS)
Walmart Fulfillment Services (WFS) offers a similar suite of services to FBA, aiming to provide a seamless experience for sellers and customers alike.
Walmart+ is Walmart’s equivalent service to Amazon Prime. This subscription also provides several benefits to its members like free delivery, same-day shipping, discounts, and other streaming and entertainment services. Leveraging the existing physical retailer footprint, Walmart+ also adds unique features like scan-and-go for in-store shoppers.
However, the recently introduced Walmart+ couldn’t compare to the fully-fledged Amazon Prime as it is not well-loaded with features and benefits. In general, it would add much to the appeal if compared with what FBA and Amazon Prime can offer.
Another thing to consider is that Walmart sets a higher standard for sellers who want to join Walmart Fulfillment Services.
Onboarding/Entrance approval
Amazon and Walmart have distinct approaches to onboarding and entrance approval for sellers on their platforms. While Amazon remains more open to merchants and requires minimal barriers to entry, Walmart maintains a more selective process, often favoring established brands.
Amazon Onboarding and Entrance Approval
Amazon’s accessible onboarding process allows sellers from different segments, small to large, to join and list their products. This inclusivity makes it easier for new and smaller businesses to enter the e-commerce space.
- Minimal Barriers to Entry: Amazon’s platform is accessible to almost anyone, providing an opportunity for various sellers, regardless of size or experience.
- Easy Onboarding: The onboarding process is designed to be quick and straightforward, enabling sellers to set up an account and start listing products with minimal effort.
- Verification Process: Although some verification is required, it is generally straightforward. Sellers need to provide basic information and documentation, which can be processed relatively quickly compared to other platforms.
Walmart Onboarding and Entrance Approval
Walmart takes a more selective approach, requiring sellers to undergo a rigorous application and approval process. This process often favors established businesses and reputable brands. Keeping a high entrance helps Walmart to retain a certain level of quality and reliability on the platform.
- Application Requirement: Prospective sellers must submit an application, which includes detailed information about their business and product offerings:
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- Business verification documents
- Record of prior online sales history & experience
- Product Catalog & supplier information
- Demonstrated capability through extensive performance metrics
- Approval Process: Walmart reviews each application carefully, often favoring established brands with a proven track record of quality and customer service. The process would take approximately 6-8 weeks to complete.
- Quality Control: Walmart places a strong emphasis on higher product standards and better customer service, ensuring that only reputable sellers are allowed to list their products on the platform.
Even after getting the approval stamp from Walmart, merchants have to keep up to meet Walmart’s strict requirements.
Seller fees and costs
Selling fees are key factors that determine the profit margin of e-commerce businesses. Before deciding which platform to enter, you also need to consider the selling fees and costs of each platform carefully.
Amazon charges a monthly subscription fee for professional sellers, along with referral fees and fulfillment fees for FBA.
- Monthly Subscription Fees: Amazon’s Individual plan starts at $0.99 per month for up and goes up higher depending on your sale volume. If sellers opt for the Professional plan, the price is $39.99 per month.
- Referral Fees: Typically between 6% and 45% of the total sales price, depending on the category.
- Fulfillment Fees: If you are fulfilling via FBA services, sellers will be charged fees, for example, Pick and Pack fees, Weight Handling fees, Storage Fee, Removal Order Fee
Walmart does not charge a monthly subscription fee but has referral fees similar to Amazon, and fees for using Walmart Fulfillment Services.
- No Subscription Fees: No monthly fee for sellers.
- Referral Fees: Range from 6% to 20%, often slightly lower than Amazon.
- Fulfillment Fees: Different fee structure for WFS, generally competitive with Amazon’s FBA.
Customer Service and Return Policies
Customer support is usually included as an add-on when you are using the platform’s fulfillment service. It’s of utmost importance to pay close attention to the customer support provided by the platform. A good customer service will guarantee that your end customers are taken care of properly
Amazon
When it comes to customer support, there are not many platforms that can challenge Amazon’s top-tier position.
- Customer Service:
- 24/7 Support: Amazon offers 24/7 customer support via phone, chat, and email, ensuring that customers receive assistance whenever needed.
- A-to-Z Guarantee: Protects customers by guaranteeing the condition and timely delivery of items they purchase. This builds trust and can lead to higher sales for sellers.
- Seller Support: Amazon provides comprehensive seller support through Seller Central, offering resources, tutorials, and a support team to help sellers with various issues.
- Return Policies:
- Generous Return Policy: Amazon typically allows customers to return items within 30 days of receipt, often at no cost to the customer. This policy applies to products sold by both Amazon and third-party sellers.
- FBA Returns: For FBA items, Amazon handles returns directly, which can save sellers time and hassle. This ensures a consistent customer experience and often results in higher customer satisfaction.
- Returnless Refunds: In some cases, Amazon offers returnless refunds for low-cost items, which can reduce friction for customers and improve their shopping experience.
With Amazon’s strong customer service and favorable return policies, sellers can rest assured that the customers are happy with the shopping experience. Happy customers are the key to building reputation and trust, increasing conversion rates, and gaining repeat purchases.
Not only the FBA service, Amazon still demands high standards for customer support from FBM sellers. FBM merchants still have to keep up with the high standards required by Amazon. If you fail to keep up with Amazon’s customer support guidelines, your account might be suspended by Amazon.
Walmart
Walmart’s root as a traditional brick-and-mortar retailer has also influenced their customer service philosophy. In other words, at Walmart, prices matter more, and customers might have to be more patient to receive support. Shipping and refunds can also take longer to complete.
- Customer Service:
- Extensive Support Options: Walmart provides customer support through phone, chat, and email. They also offer in-store support for customers who prefer face-to-face interaction.
- Resolution Center: Walmart’s Resolution Center helps sellers manage and resolve customer issues, providing tools and support to handle disputes.
- Dedicated Account Managers: For high-performing sellers, Walmart may offer dedicated account managers to provide personalized support and help optimize their business on the platform.
- Return Policies:
- Standard Return Policy: Walmart generally allows returns within 90 days of purchase, which is more generous than Amazon’s 30-day policy. This applies to most items sold by both Walmart and third-party sellers.
- In-Store Returns: Customers can return items purchased online to any Walmart store, offering a convenient option that can enhance customer satisfaction.
- WFS Returns: For items fulfilled by Walmart Fulfillment Services (WFS), Walmart handles returns, similar to Amazon’s FBA.
Even when customer support is not Walmart’s forte, Walmart can make it up with some convenient solutions for customers. For example, thanks to Walmart’s extensive brick-and-mortar footprint, customers can go to the nearest Walmart to return items purchased online, which offers a convenient option that can enhance customer satisfaction.
Marketing and Advertising
To gain substantial growth in sales, sellers have no choice but to leverage the power of marketing and advertising. Each e-commerce platform will come with a unique tool and features dedicated to helping customers promote their products on their platforms.
Amazon
Increasing visibility through Amazon advertising is an effective way to reach a large audience. A report showed that nearly 80% of searches on Amazon are non-branded. It indicates that the majority of customers on Amazon are shopping with no specific brand in mind, which means more opportunities for driving sales through advertisements.
Even more impressive, it is estimated that 50% of product searches start on Amazon, even higher than Google, the world’s most popular search engine.
To take advantage of Amazon’s massive customer base, don’t overlook the ads solutions provided by Amazon:
- Sponsored Products: Allows sellers to promote individual listings within search results and on product pages, increasing visibility.
- Sponsored Brands: Enables brand owners to create banner ads that showcase their brand and product portfolio.
- Amazon Stores: Customizable storefronts for brand owners to create a cohesive brand experience on Amazon.
- Sponsor Display: A display advertising solution for more advanced targeting and retargeting campaigns both on and off Amazon.
These options equip Sellers with powerful arms to execute sophisticatedly targeted ad campaigns, reach specific customer segments, and optimize their ad spend.
Walmart
Unlike Amazon, customers at Walmart prefer products from reputable brands. As a result, online shoppers on Walmart also tend to search for products based on brand, indicating a smaller chance to gain sales through advertising. Even so, to look on the bright side, the competition is lower, resulting in lower advertising costs and higher visibility for ads.
- Sponsored Products: Similar to Amazon, Walmart offers Sponsored Products ads that appear in search results and on product pages.
- Sponsored Brands: Allows brand owners to create banner ads to showcase their brand and product range. This option includes both Display Advertising and In-store Advertising.
- Walmart Connect: Walmart’s advertising platform, provides various advertising solutions to reach customers on Walmart’s website and beyond.
One unique feature of Walmart Advertising is íts Walmart’s ability to combine online and in-store advertising, offering a unique opportunity to engage customers across multiple channels.
Moreover, as Walmart invests in its advertising capabilities, early adopters may benefit from new features and opportunities as the platform evolves.
Opportunities
Let’s explore all the unique opportunities that Walmart and Amazon can bring to the table.
Branding
Establishing strong branding is important, regardless of what platform you are selling on, be it Walmart, Amazon, or your own website.
Amazon
Amazon offers an extensive branding suite for sellers to build their brands:
- Amazon Brand Registry: Sellers can register their brands to gain access to tools that help build and protect their brand. This includes access to enhanced brand content, Amazon Stores, and Sponsored Brands ads.
- Enhanced Brand Content (EBC)/A+ Content: Registered brand owners can create richer product descriptions, including enhanced images and videos, to differentiate their listings.
- Amazon Stores: A customizable storefront that allows brands to create a multipage website within Amazon to showcase their products and tell their brand story.
These powerful features provide space for brands to integrate their brand identity, tell their stories, and create a lasting impact on customers’ minds.
Walmart
Walmart also currently provides useful tools for merchants and brands to cultivate branding on its platform:
- Walmart Brand Portal: Similar to Amazon’s Brand Registry, Walmart offers a portal where brands can protect their intellectual property and manage their brand’s presence on Walmart.com.
- Rich Media Content: Walmart allows brands to enhance their product pages with rich media content, including videos and images, though the tools may be less advanced compared to Amazon’s A+ Content.
Listing control
Amazon has a long and complicated list of requirements for listings published on their platform. They also retain significant control over listing and policies. It means that sellers have limited control over their listings on Amazon.
Moreover, multiple sellers can offer the same product, leading to increasing competition for the Buy Box, which can impact visibility and sales.
Walmart, on the other hand, typically gives brands more control over their product listings. Sellers often have more authority over their product descriptions and images. Considering the Buy box competition, fewer third-party sellers mean less competition for control over product listings, allowing brands to maintain a more consistent brand image.
Print on demand
Is there any opportunity for print on demand company to develop its footprint on Amazon or Walmart? The answer is yes. Let’s explore all the possibilities for print on demand businesses to thrive on these marketplaces.
Print on demand with Merch by Amazon
Merch by Amazon is a dedicated POD service that allows sellers to upload designs and sell custom apparel directly on Amazon. Amazon handles production, shipping, and customer service.
Print on demand with self-fulfillment options
First and foremost, both Walmart and Amazon allow merchants to take care of the fulfillment process and handle the logistics. These options also make it viable for the third-party print on demand providers to take over the workload and deliver print on demand items to your customers.
However, this option has one big challenge: Your order fulfillment process must oblige to the platform’s required delivery timeframe. Print on demand items demand a certain time for manufacturing before they are packed and shipped to customers. This leads to extended shipping time and makes it harder to meet the expected delivery timeframe. If you are seeking for print on demand partner to handle your fulfillment orders from Amazon and Walmart, you must make sure that they can meet the restricted timeline that the platform requires.
At Merchize, we can help our sellers handle production and logistics timely so your print on demand orders, on both Walmart and Amazon, can arrive at customers’ doors timely.
Print on demand for Fulfillment by Amazon (FBA)
While typically used for inventory-based products, sellers can use FBA to store and ship POD products as a quick solution for keeping some inventory of their popular designs. At Merchize, we also help sellers to process their print on demand orders via FBA.
