For several years, people considered Amazon to be the best eCommerce platform to buy and sell items due to its large user base that made commerce seamless.

However, Walmart – the retail giant – has entered the online marketplace, offering its sellers and buyers multiple worthwhile benefits that make one wonder “which platform is best?”.

This question is more relevant to sellers as choosing the correct platform involves numerous factors like fees, flexibility, and many more. They are important for maximizing profit with little to no complications.

Fortunately, this article will present some review of both online marketplaces, providing you with all the information – including the pros and cons of both platforms – to enable you to choose which option is best for your eCommerce business.

WALMART logo on boxes in shopping cart near the laptop
As of March 2021, Walmart’s removed the rule requiring a seller on its marketplace to be registered in the U.S.

Walmart Marketplace: What You Need To Know

Walmart’s online marketplace is a relatively new addition known for other services besides grocery delivery. Aspiring sellers should know that qualifying to be a seller on this platform is difficult as Walmart doesn’t approve sellers easily.

Walmart’s seller acceptance method can be considered as invitation-only as it’s only given to individuals who have a substantial track record in selling on other marketplaces and meet other required criteria.

Essentially, aspiring sellers are required to submit an application to the platform and wait for a maximum of two weeks for an approval message. After approval, the onboarding will take another two to four weeks to complete; however, the journey hasn’t ended as new sellers now need to adhere to Walmart’s list of practices to trade on the platform.

Below are some components of Walmart that potential sellers need to understand before applying to the eCommerce platform:

1. Building Your Brand

If you manage to qualify as a Walmart seller, note that you have little to no competitors as the platform’s steep barrier to entry means fewer sellers flood the marketplace. In other words, you can easily stand out and build your reputation with low competition.

The focus of every seller is to raise their brand reputation on the platform, which includes working to improve or maintain your seller and product ratings, as these factors determine the buying decision of unique visitors.

Your ratings are what customers see first – and even find – once they land on your seller pages and product listings since it helps them determine whether you’re worth their time and money.

For this reason, Walmart requires its retailers to keep their seller ratings as high as possible to encourage patronage and continued trust from consumers. Therefore, sellers are to contact customers immediately after receiving a negative rating, rectify the issues the next day, and avoid the same problem.

It’s worth noting that Walmart has performance metrics to decide whether a seller performs according to their standard. These include on-time shipping rates, the number of products with valid tracking information, and product defect rates.

Fulfilling these standards, according to Walmart, guarantees you more patronage and profit on the Walmart Marketplace.

2. Product Listing

Once a seller has been accepted to trade on the Walmart store, the next step is uploading items to the platform. Fortunately, Walmart allows individuals to execute this task in two ways: upload a new item to the marketplace or share an already existing product with another seller on the website.

If you choose to upload a new item to Walmart.com, the following guidelines are essential for success. These are:

  • Use SEO Keywords: Statistics reveal that 81% of potential buyers first search the web using engines like Google, Yahoo, and Bing before purchasing a product. For this reason, you need to position yourself to appear on these people’s search results and receive their patronage. One of the best ways to accomplish this goal is with Search Engine Optimization (SEO), which helps increase online traffic through strategic word usage. In other words, employing SEO Keywords in your product title and description increases the chances of your customers finding you.
  • Use High-quality Product Photos and Videos: Unlike shopping in a brick-and-mortar store, buying items online is void of physical contact, limiting the buyer’s ability to assess the product before purchasing thoroughly. This factor can lead to shopping cart abandonment, and the best way to compensate for this loss is to present high-quality pictures and videos. These graphics – especially videos –  engage with clients better and convince them that what is being advertised is authentic.
  • Accurately Categorize Your Products: Categorizing items in your online store is crucial as customers who value your niche can easily navigate your offerings and pick a product. However, if the bulk of your items are scattered in invalid or confusing product categories, your chances of success will decrease since customers will opt for your competitor.

Fortunately, Walmart has a guideline that ensures you insert items into the correct category and avoid repelling customers with confusion.

On the other hand, if you’re selling products already offered by other sellers, you won’t have to worry about listing as it will be recorded automatically, thereby saving your time. However, competing with other sellers and getting the most online sales is all about winning the buy box. 

The Buy Box is the first price option that’s presented to customers for items shared by multiple online sellers, and if won’t, it provides excellent exposure since buyers will go for the best price.

However, winning the Walmart Buy Box is relatively tricky as it requires competition or having the lowest price available on Walmart.com. As for competitive pricing, retailers can include Perks like free shipping, which are effective for getting customers’ attention.

On the other hand, offering the lowest price may drop your profit margins but increase your patronage rate more than your competitors. In fact, Walmart encourages this option with their Everyday Low Pricing as they offer everything at a low price on items compared to other e-commerce platforms.

Note: before offering free shipping or the lowest possible price, sellers should calculate how many sales they will need to make a profit.

3. Fulfilling Orders

Before last year (2020), Walmart didn’t have an order fulfillment system, unlike Amazon’s FBA; therefore, sellers were required to deliver their products once they were ordered. 

Fortunately, Walmart lifted the strain off entrepreneurs as Walmart released its Walmart Fulfillment Services in 2020, during the pandemic, which helps merchants handle factors like shipping, returns, and customer service.

However, this service is only available to merchants that qualify to use the Walmart Fulfillment Services, meaning that unqualified sellers must handle product fulfillment themselves until they are eligible.

4. Walmart Selling Fees

Unlike other platforms like Amazon, eBay, and Shopify, Walmart.com doesn’t require monthly, annual, or product listing fees from its users, allowing them to make a higher profit than other e-commerce platforms.

The only fee charged by Walmart on its sellers is a referral fee, which ranges from 6% – 20% of product sale proceeds. The amount charged on each product depends on its category, and different products possess different requirements.

Walmart excels when it comes to seller fees as it doesn’t charge its customers unnecessary monthly and annual costs, allowing them to make more money on each trade.

Ultimately, Walmart is a relatively new online marketplace. While entry barriers are high, sellers who eventually qualify and follow Walmart’s seller guidelines will enjoy the platform and lack concrete competition.

Amazon seller app menu on smartphone screen close up view
Retail sales are Amazon’s primary source of revenue, with online and physical stores making up the biggest share.

Amazon Marketplace: What You Need To Know

Compared to Walmart, Amazon, owned by Jeff Bezos, exceeds the platform by several figures as it has more patronage and reputation. Additionally, the bar to entry is lower in Amazon as individual aspiring sellers have to go through little to no approval process.

Below are some components of Amazon that potential online retailers need to understand before applying to the eCommerce platform:

1. Building Your Brand

Unlike Walmart, Amazon is crowded with sellers, as statistics from MarketPlace Pulse reveal approximately 1.6 million merchants currently sell on Amazon, meaning Amazon sellers need to work harder to survive in the competition.

Fortunately, this goal isn’t difficult to accomplish since all sellers need to maintain high seller and product ratings. Like Walmart, these ratings are the first things the customer sees and finds when searching for a product or seller page since it helps them decide whether your service is worth their time and money.

Luckily, there are many ways sellers can boost their reputation and influence the buying decision of Amazon customers. The goal is to make a good impression by meeting Amazon’s performance standards, just like Walmart.

These metrics help sellers perform optimally and preserve the trust and reputation of Amazon to promote more patronage for the benefit of the seller, buyer, and the platform.

These standards include a low order defect rate, Pre-fulfillment cancellation rate, and late shipping rates. All these factors are required to be kept at minimal amounts to secure more patronage in the future.

However, sellers who go below Amazon’s standard will be stripped of their selling privileges, which are difficult – but not impossible – to restore if you get suspended. 

2. Product Listing

When uploading products to Amazon, sellers must create a separate listing for each item if no other seller offers the thing. However, if the offering is a common product, merchants can include them in an already existing category. 

This requirement makes it easier for customers to navigate and find products with little to no hassle. Like Walmart, the tips for succeeding at product listing include three essential ingredients.

These include using SEO Keywords, the inclusion of high-quality pictures and videos, and cataloging products correctly. As previously stated, products that are already available in Amazon will be grouped into a shared list with other sellers.

This group placement makes products easier to find, but the seller would have to win the buy box – like Walmart – for the most sales. What separates Amazon’s buy box from Amazon’s Buy Box is that the winner is determined by other factors besides competitive pricing and item availability; they depend on high-quality customer service and order fulfillment.

Note: Each buy box requirement isn’t prioritized above the other; therefore, marketplace sellers should aim to excel at all.

3. Fulfilling Orders

Unlike Walmart, where most sellers are required to fulfill products themselves, Amazon.com possesses the Fulfillment By Amazon (FBA). This service helps sellers ship their items – including day shipping – and handle important factors like packaging, storing, and returns through the fulfillment centers. 

However, Amazon FBA isn’t free as the shipping costs, storage fees, and other Perks range from 45 cents to $1.35 per unit, or $39.99 per month for professional accounts. While this service is relatively expensive, Amazon encourages its sellers to sign up for Amazon FBA to meet customers’ shipping expectations.

Fulfillment by Amazon presents additional benefits besides convenient shipping; if the service accidentally fulfills the wrong product or executes the delivery poorly, it won’t harm your third-party seller account despite the incident.

Alternatively, if third-party sellers have more convenient shipping options that cost less than what Amazon requires, they are free to employ such means as long as they perform within Amazon’s requirements.

4. Amazon Fees

The cost of selling on Amazon depends on which seller plan you choose as the platform offers two selling plans, professional and individual. Individual eCommerce sellers pay $0.99 per item sold alongside variable closing fees that range from $0.45 to $1.36. 

As for professionals, they pay variable closing fees and referral fee percentages ranging from 6% to 35% alongside a monthly fee of $39.99. It’s worth noting that professional Walmart Marketplace sellers are exempted from the $0.99 per item payment, thereby reducing their overall cost.

Comparing Both Marketplaces: Walmart Vs. Amazon

After a thorough analysis of both marketplaces and what they offer, it’s best to compare their features and benefits to understand better which platform.

1. Approval to sell

The barrier to entry for Amazon is far lower than Walmart as anyone can go online and become a seller. Choose your account type – professional or individual – and proceed to trade your offering without any screening process.

On the other hand, getting approved by Walmart is tricky as you need to be a previously established business with sufficient selling experience. Additionally, companies need to meet specific Walmart requirements like order fulfillment, competitive pricing, and more to begin trading.

2. Seller Fees

Seller fees required by Walmart are lower than the ones requested by Amazon as Amazon includes account fees, commissions, and closing fees. On the other hand, Walmart only charges a small percentage on each item sold, giving sellers the chance to make higher profits.

3. Product Prices

Both platforms regulate the price tag of products offered, but Amazon has more flexible pricing since sellers can input their desired pricing and sell products according to their worth. On the other hand, Walmart requires its sellers to list products with lower price tags per their everyday low pricing goal.

While this factor may seem detrimental, sellers in Walmart are exposed to higher patronage due to Affordability. However, while Amazon sellers can list according to their desire, the high price tag doesn’t guarantee high trade as buyers desire the lowest pricing.

4. Competition

Sellers on Walmart enjoy less competition than sellers on Amazon, thanks to the platform’s high entry requirements. Most individuals don’t qualify to sell on Walmart, leaving nothing but unique and qualified vendors.

If you qualify to sell in Walmart, you may experience little to no competition as very few people would sell your type of product, especially if it’s unique. However, Amazon has almost no entry requirements, meaning anyone can become a trading platform and compete for patronage.

5. Fulfillment

Although Walmart possesses a system for helping its sellers fulfill orders, not everyone qualifies for the service, resulting in most people handling the delivery, customer service, and returns on their own.

On the other hand, Amazon has its FBA service that helps its customers package, deliver, and store their products reasonably. Sellers who can’t afford the fee or have better delivery options can opt-out of the FBA; nevertheless, the service is still available and requires only a few dollars to activate.

Choosing the Right Online Marketplace

From a seller’s perspective, Walmart and Amazon possess individual benefits and drawbacks that make choosing one platform over the other difficult. Therefore, we recommend assessing your capabilities and budget to see what pros and cons you can accept.

Are you qualified to handle Walmart’s steep requirements for entry? Can you pay Amazon’s seller fees? Do you desire as little competition as possible, or can your offering(s) stand the storm?

They are essential factors to consider when choosing a platform; however, you can diversify and sell on both websites as each marketplace offers impressive benefits. Additionally, diversifying your sales channels puts your unique product in front of more buyers, helping you succeed in the eCommerce race.