What Is the Difference Between Selling on Walmart vs. Amazon?

Ecommerce has created endless opportunities for businesses to expand their brand awareness and connect with audiences they otherwise would not have reached. 

Among the top marketplaces, Walmart and Amazon stand out as giants, each offering unique benefits and challenges for sellers. Deciding where to list your products is a critical step that can significantly impact your business growth and profitability.

In this article, we will review the differences and similarities between selling on Amazon and selling on Walmart to determine the best option for your business. 

Overview of Walmart and Amazon marketplaces

Walmart and Amazon represent two distinct ecommerce ecosystems. Both provide sellers access to millions of customers, but their operational models, audiences, and competitive dynamics vary significantly.

Walmart Marketplace

Walmart, a retail powerhouse, is rapidly increasing its online presence. Historically known for its extensive network of brick-and-mortar stores, Walmart has adapted to the world of ecommerce, offering a hybrid shopping experience through in-store and online purchases.

Key features of the Walmart Marketplace:

• Buyer demographics: Walmart caters primarily to price-conscious shoppers. Customers often seek affordable, essential products rather than luxury items.
• Selective seller approval: Walmart is highly selective about the sellers it approves. Applicants must meet specific criteria, including a proven track record, high-quality products, and reliable fulfillment processes.
• Online growth: In recent years, Walmart has focused heavily on expanding its ecommerce operations, introducing features like Walmart Fulfillment Services (WFS) and faster delivery options.

Amazon Marketplace

Amazon has long been the leader in global ecommerce. With over 300 million active customer accounts and marketplaces in multiple countries, Amazon is typically the number one choice for businesses to offer their products, leading to more competition. 

Key features of the Amazon Marketplace:

• Massive customer base: Amazon attracts customers across various demographics, from bargain hunters to high-end buyers, and wants to reach them all.
• Open seller registration: Unlike Walmart, Amazon welcomes a broader range of sellers, making it easier for small businesses and new entrepreneurs to join and start selling products online.
• Advanced tools and services: Amazon offers substantial resources, including Fulfillment by Amazon (FBA), detailed analytics, and advanced advertising solutions to help sellers grow and succeed on the platform.

How are Walmart and Amazon similar for sellers?

Despite the differences, Walmart and Amazon share several similarities that make them appealing to ecommerce sellers of all sizes.

Fulfillment services

With both Amazon and Walmart.com, sellers can fulfill the orders themselves or through their respective fulfillment centers. 

While Amazon has offered FBA since 2006, Walmart introduced WFS in February 2020 to compete with Amazon’s wildly popular and effective fulfillment services. WFS charges simple fulfillment fees and provides sellers with many of the same money—and time-saving benefits as FBA. These include increased site visibility, higher search rankings, and Walmart TwoDay tags (similar to the Amazon Prime badge). 

Walmart and Amazon have fulfillment services to simplify operations and enhance the customer experience. Here’s how they compare:

• Walmart Fulfillment Services (WFS): Designed to compete with Amazon’s FBA, WFS provides warehousing, packaging, shipping, and returns management. It offers fast delivery options and is tailored for sellers who meet Walmart’s quality standards.
• Fulfillment by Amazon (FBA): A pioneer in fulfillment solutions, FBA handles every aspect of order logistics. Sellers benefit from Amazon Prime eligibility, which guarantees faster delivery and higher visibility in search results.

Guaranteed 2-day free shipping

Thanks to Amazon, fast and free shipping has become a baseline expectation for ecommerce shoppers. Both Amazon and Walmart meet this demand with their signature shipping offerings.

• Walmart: Sellers using WFS gain access to Walmart’s 2-day free shipping badge, which can increase sales and customer trust.
• Amazon: Through FBA, products are automatically eligible for Prime 2-day shipping, appealing to Amazon’s loyal Prime customer base.

Advanced listing content

Both platforms allow sellers to create engaging, high-quality product listings to explain and visualize your product best. Listing content is one of the most critical factors in being a successful seller on any ecommerce site. 

• Walmart: Offers tools to highlight product specifications, add multiple images, and use descriptive titles that cater to its audience.
• Amazon: Features A+ Content (available to registered brands), which includes enhanced visuals, comparison charts, and storytelling elements to drive conversions.

Listing optimization

If you are an Amazon seller or own an ecommerce store, you know how important it is to optimize your listings. A properly optimized listing helps increase discoverability within search, turning browsers into shoppers to improve organic ranking, and even helps minimize returns by providing quality content. 

The same principle applies to selling on Walmart. Your keyword research, product research, and listing optimization are all very important factors for your success on Walmart. 

You can use Jungle Scout to help with keyword research, product research, and listing optimization for your Amazon business. While Jungle Scout’s tools are specific to the Amazon marketplace, you can still use their data-driven insights to get an idea of what’s selling well on Walmart.com. They may be different marketplaces, but their customers are interested in similar products, and those items typically perform well on both. 

Categories shopped

We’ve discovered that consumers who shop on Amazon and Walmart (online and in-store) shop for the same categories, especially in clothing, grocery, beauty, and personal care.

As a seller, it’s essential to know where your customers are. In this case, no matter the category you sell in, you can expect to find an ample customer base on either platform. 

• Walmart: Dominates in groceries, household essentials, and budget-friendly items.
• Amazon: Excels in electronics, books, and niche categories like handmade goods.

Understanding category demand is essential. Tools like Jungle Scout can help you identify which platform best suits your product offering.

Benefits of selling on Walmart

While Walmart.com may not match Amazon’s scale, it provides unique advantages for sellers.

Lower competition

Walmart’s smaller seller base translates to reduced competition. This particularly benefits niche products or new sellers looking to establish themselves. For example, a handmade wooden toy might face hundreds of competitors on Amazon but only a handful on Walmart.

To sell on Walmart.com, sellers must have a legal business entity, making the barrier to entry a little harder than it is to sell on Amazon. This also helps reduce competition and the number of sellers who may not be as serious about selling on the platform. 

Access to a loyal, price-conscious customer base

Walmart’s audience prioritizes value, making it ideal for sellers with competitively priced products. Shoppers often trust Walmart for affordable goods, creating a loyal customer base.

Walmart customers also have access to Walmart+, a service similar to Amazon Prime, that provides fast and free shipping as well as some other in-store benefits. 

Integrated with Walmart Fulfillment Services (WFS)

WFS provides seamless inventory management and fast delivery options. Sellers can leverage WFS to gain customer trust, improve order efficiency, and benefit from Walmart’s growing reputation in ecommerce.

As mentioned above, WFS is Walmart’s version of Amazon FBA. You send your inventory to Walmart’s fulfillment centers, and they handle the picking, packing, and shipping on your behalf. 

Challenges of selling on Walmart

While Walmart offers opportunities, it comes with challenges:

Stricter seller approval process

To get approval for selling on Walmart , you must have a legal business license and/or business tax ID. You cannot use your SSN as you can with signing up as an Amazon seller.On top of providing detailed business information, sellers must also show a history of marketplace or ecommerce success, product quality assurances, and fulfillment capabilities (if you’re not using WFS.)

Limited third-party seller visibility

Walmart prioritizes its products and select sellers, making it harder for third-party sellers to gain visibility. Sellers must have competitive pricing, high-quality listings, and leverage WFS to succeed.

Emphasis on price competitiveness and efficiency

Walmart’s focus on low prices pressures sellers to maintain slim margins. Automation tools can help track competitor prices and adjust accordingly to remain competitive.

Benefits of selling on Amazon

There are many benefits to selling on Amazon, let’s go over a few. 

Huge customer base with global reach

Amazon’s massive customer base spans multiple countries, many with hundreds of millions of customers. Sellers can access tools like Jungle Scout to identify high-demand products and explore international markets.

Many sellers often start in one market and once they’ve found success, they will continue to expand onto other Amazon marketplaces where their products may be in demand. 

Amazon makes it fairly simple for brands to expand into other countries so sellers can get up and running.

Advanced seller tools and resources

Amazon is constantly innovating and creating new tools, services, and features to help Amazon sellers find success on the platform. All of these are built into Amazon Seller Central, making it easy to access. 

Amazon offers powerful seller tools, including:

• FBA: Fulfillment by Amazon is a fulfillment service offered by Amazon to provide streamlined logistics for sellers and gives their products Prime eligibility. With FBA, sellers can send their inventory to Amazon’s fulfillment centers, and have Amazon handle everything. Sellers who use FBA can also have Amazon fulfill orders from other marketplaces or ecommerce site using multi-channel fulfillment. 
• Advertising solutions: Amazon offers sellers many advertising options to help get their products in front of the right customers. From Sponsored Products Ads, Sponsored Brands Ads, Sponsored Display Ads, and even video ads. Advertising on Amazon helps sellers increase their brand awareness, visibility, and conversions. 
• Analytics: Amazon provides sellers with detailed performance metrics and dashboards to get a better understanding of how your products and overall business are performing on Amazon. For example, sellers can view the conversion rate of their products. If it is lower than you’d like, you can then refine your strategies. 

Established trust and convenience for buyers

Amazon’s reputation for convenience, reliable shipping, and easy returns makes it a preferred choice for millions of shoppers. Sellers benefit from this built-in trust when launching new products.

If you were to launch new products on yourwebsite for example, many buyers may not trust your website just yet, or even find your website for that matter. When customers visit Amazon.com, they know they are protected by Amazon in case there is an issue with their order. 

Challenges of selling on Amazon

Selling on Amazon offers enormous growth potential, but the platform also presents significant challenges that sellers must overcome to succeed. These challenges range from navigating intense competition to managing high seller fees and adapting to Amazon’s ever-evolving policies. 

Below is a detailed breakdown of the primary hurdles sellers face when operating on Amazon and strategies to mitigate them.

Intense competition among third-party sellers

Amazon’s open marketplace attracts millions of third-party sellers worldwide. This massive seller base means that almost every product category is highly competitive, especially in popular niches like electronics, health and beauty, and home goods. For new or small-scale sellers, standing out in such a crowded environment can be daunting.

Why competition is intense:

1. Ease of entry: Amazon’s relatively low barriers to entry allow nearly anyone to become a seller, which contributes to market saturation.
2. Global marketplace: Sellers not only compete locally but also with international businesses, including those offering lower prices due to cheaper labor or production costs.
3. Amazon’s own products: Amazon frequently creates its own private-label products to compete directly with third-party sellers, leveraging its data insights and prioritizing its listings in search results.

Strategies to overcome competition:

• Niche research: Use tools like Jungle Scout to identify underserved niches with high demand and lower competition. Finding unique or specialized products can help you avoid oversaturated markets.
• Brand building: Invest in creating a recognizable brand with professional logos, packaging, and consistent messaging. Registered brands on Amazon can also access exclusive features like A+ Content and the Brand Registry program.
• Enhanced listings: Optimize your product listings with high-quality images, videos, and compelling copy to stand out in search results.
• Leverage reviews: Focus on generating positive customer reviews through excellent customer service and post-purchase follow-ups by using Review Automation. 

High fees, including referral fees and FBA costs

Amazon’s fee structure can significantly impact a seller’s profit margins. Sellers need to account for various charges, including referral fees, Fulfillment by Amazon (FBA) fees, and additional costs for advertising and storage.

Breakdown of Amazon selling fees:

1. Referral fees: A percentage of every sale goes to Amazon, typically ranging from 6% to 15%, depending on the product category.
2. FBA fees: These cover storage, packing, and shipping. While FBA simplifies logistics, its costs can add up, especially for oversized or slow-moving inventory.
3. Storage fees: Long-term storage fees are applied to inventory that sits in Amazon warehouses for extended periods, pressuring sellers to maintain efficient inventory turnover.
4. Advertising costs: Pay-per-click (PPC) advertising on Amazon is essential for visibility but can quickly become expensive, particularly in competitive categories.

Strategies to manage fees:

• Profit analysis: Use tools like Jungle Scout Sales Analytics to calculate your true profit margins, taking all fees into account before deciding on pricing.
• Optimize FBA usage: Regularly monitor inventory levels and sales velocity to avoid long-term storage fees. Consider using alternative fulfillment options such as FBM for slow-moving products.
• Bundle products: Selling products in bundles can increase perceived value and help offset fees by generating higher average order values.
• Negotiate with suppliers: Work to reduce product or shipping costs to maintain healthy margins despite Amazon’s fees.

Increasing need for advanced advertising strategies

Amazon’s competitive landscape means that simply listing a product is not enough to drive sales. Advertising has become a necessity for sellers who want to gain visibility, especially in crowded categories. However, the growing reliance on advertising has led to increased costs and complexity in managing campaigns.

Advertising challenges:

1. Rising PPC costs: As more sellers bid for ad placements, the cost-per-click for popular keywords has skyrocketed, reducing ROI.
2. Complex campaign management: Effective advertising requires constant monitoring, keyword optimization, and strategic bidding. Without the right expertise or tools, campaigns can quickly drain budgets.
3. Ad saturation: Customers are inundated with sponsored listings, making it harder for individual ads to stand out.
4. Data-driven decisions: Successful campaigns rely on analyzing performance data, identifying trends, and making adjustments in real-time.

Strategies to maximize advertising ROI:

• Keyword research: Utilize tools like Jungle Scout Keyword Scout to find high-converting, low-cost keywords to target in your campaigns.
• Segmented campaigns: Create separate campaigns for branded, non-branded, and competitor keywords to maximize targeting efficiency.
• Leverage Amazon’s advertising tools: Use Sponsored Products, Sponsored Brands, and Sponsored Display ads to diversify your approach and capture attention at different stages of the customer journey.
• A/B testing: Test different ad copy, images, and bids to determine what resonates best with your audience.
• Monitor and optimize: Regularly review campaign performance to identify underperforming ads and reallocate budget to high-performing ones.

How can you choose the right platform for your business?

Deciding between Walmart and Amazon—or choosing to sell on both—depends on a variety of factors specific to your ecommerce business. Each platform caters to different types of sellers and products, so understanding their unique characteristics is essential for making the right choice.

Amazon or Walmart? Choose what makes sense for your business

Both platforms offer unique opportunities. For many, a hybrid strategy leveraging Walmart and Amazon may yield the best results. Using Jungle Scout’s tools can provide the data-driven insights needed to succeed.