Choosing the right marketplace is a critical decision that can significantly impact a brandโs success. Amazon and Walmart, two of the biggest players in the online retail space, offer unique opportunities and challenges for sellers. While Amazon dominates global eCommerce with its extensive fulfillment network and loyal Prime customer base, Walmart has been rapidly growing its online marketplace, leveraging its vast brick-and-mortar footprint and competitive pricing strategies.
For eCommerce brands looking to optimize their sales channels and achieve scalable growth, understanding the nuances of selling on Walmart vs. Amazon is essential. This guide provides an in-depth comparison of both platforms, evaluating key factors such as market reach, cost structures, logistics, competition, and strategic considerations.
Walmart vs Amazon: A Comprehensive Selling Guide for eCommerce Brands
Platform Comparison: Walmart vs. Amazon
Market Reach and Audience Demographics
- Amazon: With over 300 million active users worldwide, Amazon controls nearly 50% of the U.S. eCommerce market. The platform attracts a broad customer base, with a heavy concentration of Prime members who prioritize convenience, fast shipping, and trusted brand names. Amazon customers are accustomed to one-click purchases, a vast product selection, and personalized recommendations powered by machine learning.
- Walmart: Walmart has made significant strides in the eCommerce space, reaching an estimated 150 million weekly visitors across its online and offline channels. Walmart Marketplace is particularly appealing to price-sensitive shoppers and those who prefer a hybrid online-to-offline shopping experience. Walmartโs ability to leverage its physical stores for online pickups and returns offers a distinct advantage over Amazon.
Key Consideration: Amazon offers access to a vast online audience, making it ideal for brands looking to scale quickly. Walmart, on the other hand, provides an opportunity to tap into an omnichannel retail network that combines online and physical store visibility.
Seller Fees and Cost Structures
Understanding the fee structures of each platform is crucial for profitability.
- Amazon: The combination of monthly fees, referral fees, and fulfillment costs makes Amazon a higher-cost platform in some cases. However, its vast customer base, data access through Brand Analytics, and advanced advertising tools often justify the investment. Additionally, Amazon's extensive self-service tools allow for better control over advertising spend and customer engagement.
- Walmart: While Walmart Marketplace does not have a monthly subscription fee, fulfillment costs through WFS can sometimes be higher than FBA, depending on the category. Walmart also has strict pricing policies, meaning sellers must monitor and adjust pricing to avoid delisting.
Fulfillment and Logistics: FBA vs. WFS
- Amazon FBA (Fulfillment by Amazon): Offers sellers access to Amazonโs extensive logistics network, Prime badge eligibility, and Amazon-handled customer service. While FBA fees can be high in some categories, they remain competitive or even cheaper compared to Walmart WFS in other cases. Amazonโs warehouse and logistics infrastructure are unmatched in scale and efficiency, ensuring fast deliveries across multiple regions.
- Walmart WFS (Walmart Fulfillment Services): Walmart's fulfillment network is growing rapidly and offers a cost-effective alternative to FBA. However, WFS does not provide as many seller-friendly tools as Amazon. Walmartโs strength lies in its ability to support in-store pickup and returns, giving it an advantage in omnichannel commerce.
Key Takeaway: If fast, reliable fulfillment is a top priority, Amazon FBA remains the gold standard. However, Walmart WFS is becoming increasingly competitive, offering lower fees in certain categories and streamlined operations for brands looking to expand beyond Amazon.
Amazonโs Competitive Edge Over Walmart
Industry experts highlight several areas where Amazon has a clear competitive edge over Walmart:
Market Share and Reach
- As of 2022, Amazon controlled nearly 38% of the U.S. eCommerce market, compared to Walmartโs 6% (Digital Commerce 360). This massive difference in market share gives Amazon sellers access to a significantly larger customer base and greater brand exposure.
- Amazonโs global footprint allows sellers to expand internationally, a feature that Walmart does not yet fully support.
Advanced Seller Tools and Analytics
- Brand Analytics & Search Funnel Data: Amazonโs Brand Analytics tool provides unparalleled access to real-time data, including search term rankings, conversion rates, and competitor insights. Walmart does not offer equivalent analytics at this depth.
- Advertising and Promotions: Amazon offers advanced advertising options such as Sponsored Products, Sponsored Brands, DSP advertising, and video ads, allowing brands to target customers at different stages of the purchase journey (Amazon Advertising). In contrast, Walmartโs ad ecosystem is still in early development.
- Enhanced Content Creation: Amazonโs A+ Content, Brand Stores, and Virtual Bundles give sellers more control over their product storytelling and brand identity.
Customer Retention and Engagement
- Programs like Amazon Vine & Brand Follow: These tools help brands build customer trust and loyalty, increasing repeat purchases and organic trafficโfeatures that Walmart has yet to fully develop.
- Voice of the Customer Reports: Amazon provides sellers with detailed feedback and insights to improve listings, helping businesses refine their offerings based on customer sentiment.
Practical Tips and Strategies
For brands with the resources to manage multiple sales channels, a dual-platform strategy can be highly effective. By selling on both Amazon and Walmart, brands can maximize their reach and tap into different customer segments. However, this approach requires careful planning and execution to avoid cannibalizing sales or spreading resources too thin.
Maximizing Sales on Amazon
- Leverage Amazonโs Advertising Suite โ Utilize Amazon DSP, Sponsored Products, and Sponsored Brands to increase visibility and conversions.
- Enhance Product Listings with SEO and A+ Content โ Use keyword-rich descriptions, bullet points, and A+ Content to improve rankings and conversions.
- Monitor Pricing with Automated Tools โ Stay competitive with real-time price adjustments to maximize the Buy Box win rate.
- Optimize Inventory and Fulfillment Strategy โ Balance FBA and FBM to reduce storage fees while maintaining Prime eligibility.
Maximizing Sales on Walmart
- Price Competitively โ Walmart prioritizes the lowest price online, so brands must consistently monitor pricing across all channels.
- Invest in Walmart Fulfillment Services (WFS) โ Fast delivery and seamless fulfillment improve visibility and sales.
- Optimize Product Listings for Walmartโs Search Algorithm โ Use clear titles, structured attributes, and high-quality images.
- Utilize Walmart Connect for Advertising โ Walmartโs PPC ads offer lower CPCs than Amazon's, making it a cost-effective way to drive traffic.
International Expansion
Amazon: Amazon's global presence is a significant advantage for brands looking to expand internationally. With marketplaces in North America, Europe, Asia, and beyond, Amazon provides sellers with access to a worldwide customer base. The platform also offers tools and resources to help sellers navigate international shipping, taxes, and compliance.
Walmart: While Walmart has a strong presence in the U.S., its international reach is more limited. The platform is gradually expanding its eCommerce operations in countries like Canada and Mexico, but it still lags behind Amazon in terms of global market penetration. For brands focused on international growth, Amazon may be the more viable option.
Product Categories and Niche Opportunities
Amazon: Amazon's vast product catalog spans virtually every category imaginable, from electronics and books to groceries and handmade crafts. This diversity allows sellers in niche markets to find their audience. However, the competition in popular categories can be intense, requiring sellers to invest heavily in advertising and optimization.
Walmart: Walmart's marketplace is particularly strong in categories like groceries, home goods, and apparel. The platform is also known for its competitive pricing in these areas, making it an attractive option for brands in these niches. Additionally, Walmart's focus on value-oriented products can be a boon for sellers offering budget-friendly items.
Seller Support and Resources
Amazon: Amazon offers a wealth of resources for sellers, including detailed guides, webinars, and a dedicated support team. The platform's Seller Central dashboard provides access to a wide range of tools for managing inventory, tracking sales, and optimizing listings. Additionally, Amazon's third-party ecosystem includes numerous service providers and software solutions to help sellers succeed.
Walmart: Walmart's seller support is still evolving, but the platform has made strides in recent years. Walmart Marketplace provides access to a seller support team, as well as resources like the Walmart Marketplace Playbook. However, the platform's tools and resources are not as extensive as Amazon's, which can be a challenge for new sellers.
Customer Demographics and Shopping Behavior
Amazon: Amazon's customer base is diverse, but it tends to skew slightly toward higher-income households. Prime members, in particular, are known for their willingness to spend more on convenience and quality. This makes Amazon an ideal platform for premium brands and products.
Walmart: Walmart's customer base is more value-oriented, with a focus on budget-conscious shoppers. The platform's emphasis on low prices and everyday savings appeals to a broad demographic, including families and older consumers. For brands offering affordable, everyday products, Walmart can be a lucrative marketplace.
Returns and Customer Service
Amazon: Amazon's customer service is renowned for its efficiency and customer-centric approach. The platform's A-to-Z Guarantee ensures that customers can return products easily, which can be a double-edged sword for sellers. While it builds trust with customers, it can also lead to higher return rates.
Walmart: Walmart's return policy is also customer-friendly, with options for in-store returns and online processing. However, the platform's return process is not as streamlined as Amazon's, which can lead to longer processing times and potential challenges for sellers.
Future Trends and Opportunities
As the eCommerce landscape continues to evolve, both Amazon and Walmart are investing heavily in new technologies and strategies to stay ahead of the competition. Some key trends to watch include:
- AI and Machine Learning: Both platforms are leveraging AI to enhance customer experiences, optimize advertising, and improve logistics. Sellers who embrace these technologies can gain a competitive edge. For example, Rufus, Amazon's AI-powered shopping assistant, is now live on Amazon.com, helping customers discover products through conversational search. Additionally, Amazon Advertising has introduced AI-powered image generation to help brands produce richer creative.
- Sustainability: Consumers are increasingly prioritizing sustainability, and both Amazon and Walmart are introducing initiatives to reduce their environmental impact. Brands that align with these values can appeal to eco-conscious shoppers.
- Omnichannel Integration: The line between online and offline shopping is blurring, and both platforms are investing in omnichannel strategies. Sellers who can seamlessly integrate their online and offline operations will be well-positioned for success.
- Seller Fees and Cost StructuresWith the rise of smart speakers and voice assistants, voice commerce is becoming an important channel. Brands that optimize their listings for voice search can tap into this growing trend.
Conclusion
Both Amazon and Walmart present viable opportunities for eCommerce brands, but the right choice depends on your business goals. Amazonโs vast customer base, superior data insights, and advanced advertising ecosystem make it ideal for brands looking for scalability, while Walmartโs growing marketplace, cost-effective fulfillment, and omnichannel reach provide a compelling alternative for sellers looking to diversify.
For brands with the capacity to manage multiple sales channels, a dual-platform strategy leveraging both Amazon and Walmart can maximize market penetration and revenue growth. SalesDuoโs proprietary AI-driven solutions and ex-Amazon experts provide a tailored, data-backed approach to help brands navigate both platforms seamlessly, optimize performance, and drive long-term success.
Ready to unlock your brandโs full potential on Amazon and Walmart? Schedule your 1:1 growth call with our experts today!
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About the Author
Giridhara Prasad is an Associate Director at SalesDuo and a startup enthusiast. With extensive expertise in e-commerce, this ex-Amazonian has been instrumental in driving success for businesses worldwide. Apart from his passion for creating innovative sales strategies and optimizing online retail experiences, Giri finds interest in watching and playing sports, including starting to play pickleball, traveling, and exploring political science, and philosophy.
