The two main players for online shopping are Amazon and Walmart marketplace. However, Amazon is in the lead considerably with almost 40% of all eCommerce sales, while Walmart marketplace brings in just above 5% of online sales.
Even though Walmart is in second place and not falling anywhere close to Amazon’s success, don’t count them out of the online sales game just yet. Since they acquired Jet.com (2016) they’ve seen their eCommerce sales nearly triple. They have also been pouring resources into improving their online sales operations for the past three years, which is starting to pay off. And, the biggest addition to their lineup is Walmart+. This new addition is bringing a competitive aspect and additional online shopping option for consumers.
What is Walmart+?
Walmart+ is Walmart's new membership option ($98/year) which offers consumers perks like free delivery on a wide selection of groceries, toys, tech, beauty and household items. More than 160,000 items can be delivered as soon as the same day. In comparison, Amazon Prime offers 3 million products with same-day delivery.
A Walmart+ membership also includes access to ‘scan and go’ technology that allows consumers to shop in-person, but scan and pay for items with your smartphone as your shop. Say goodbye to those pesky slow, long lines!
Walmart Marketplace Compared to Amazon
When it comes to eCommerce shopping, Amazon has a big head start compared to the Walmart marketplace. Amazon continuously focuses on new technology and innovation, which secures it’s placement as a leader in online shopping. Additionally, Amazon has another advantage for sellers, and that is Amazon Web Services (advertising opportunities for sellers), which they have been improving upon for years.
To Walmart’s advantage, however, 90% of Americans live within 10 miles of one of it’s more than 4,700 U.S. stores. This makes Walmart’s physical retail landscape stronger, as their vast grocery goods are offered at more economical price points compared to Amazon’s main grocer, Whole Foods.
At the end of the day, where you shop comes down to what you want as a consumer and as a seller. Walmart+ is sure to keep Amazon Prime on their toes and both services will continue to pivot and adjust, maybe even offering additional benefits for choosing their membership.
Level of Competition
It is no secret that the struggle for many sellers on Amazon is that there is a lot of competition. In order to stand apart from the crowd, get more eyes on your products, and generate sales, you need to invest in your business. While it is easy to get into the mindset that you don’t need to put time, money and effort into your account, this mindset will only hinder your potential.
Just as with any business model, you can’t just set it and forget it, or set it and wait. If you are just waiting for your listings to gain traction and to magically generate high traffic, you are wasting precious time that could be spent on improvements to your listings. No traffic means no sales. It’s as simple as that.
With the high level of competition on Amazon, sellers need to work on improving the quality of their product listings. This includes filling up all image slots, consistently monitoring and adjusting keywords, allocating a budget towards advertising, and more. By focusing on making your Amazon marketplace the best it can be, you are improving the consumer experience, which is Amazon’s goal. Ultimately, that goal will help you as well.
The Walmart marketplace does offer an intriguing opportunity for eCommerce sellers. Today, there is far less competition on Walmart and with the launch of Walmart+ that is sure to steadily increase. It is likely that initially there will be a higher sales velocity and reviews acquired for new sellers on Walmart, with less effort put forth. This will set up the first wave of Walmart sellers to compete well with the inevitable new wave of competition that will eventually reach the third-party marketplace.
Setup Fees and Instruction
Both Amazon and Walmart marketplaces have similar fee structures. The setup fee for Amazon is $39.99 per month, while Walmart does not currently have a fee. However, Walmart does require interested sellers to submit an application. Additionally, Walmart is only accepting sellers with established business practices. The Walmart marketplace selects sellers based on sales projections, reputation, return policy, seller ratings on other eCommerce marketplaces, and more.
Both of these eCommerce marketplaces each have a referral of 15%. Additionally, each provider has their own fulfilment option. Amazon has FBA (Fulfillment by Amazon) and Walmart as WFS (Walmart Fulfillment Services). Both fulfillment options are based on weight and product dimensions for the fee structure.
Where to Sell Online?
Walmart is one of the fastest growing marketplaces and they are continuously making improvements and adding new features to make it a better selling experience. While Walmart will have less competition initially, it is a great idea to get started selling on their platform earlier rather than later, if your seller application is accepted. Because there is a lengthy review process in place, this could delay selling on the Walmart marketplace.
As with any venture, it’s best to explore all of your options. Even though Amazon is highly competitive, they do offer some advantages for sellers that may outweigh the con of high competition. In addition to their technology and seller features being more robust, Amazon does not require an application to start selling.
Lastly, as a seller, a great strategy is to go where your target market is. That could mean selling on both platforms, or it could mean that one may suit your needs better than the other. Walmart+ has a slightly lower membership fee and is a well-known name for physical retail stores. Even though Amazon Prime’s membership is slightly higher, they do have more products available for same day delivery.
One last point to consider when thinking about your target market is which benefits your customers would prefer. Both eCommerce marketplaces offer grocery delivery, and while Amazon offers a vast selection of music and video streaming options, Walmart+ offers a discount on fuel. Figuring out your target demographic will determine which features will serve your business better. The bottom line is that only time will tell what additional benefits each membership service will offer consumers.
After carefully analyzing both options with your business model in mind, you’ll need to decide which marketplace is best, or decide if both are right for you. If you need help determining which option is the best choice for you, let our team of experts help! Each one of our eCommerce experts have a unique set of skills paired with years of hands on experience that is valuable to online sellers who want to improve their eCommerce business. Not only is our team able to perform a competitive analysis, but they can also help you narrow down your target market, set a highly targeted sales strategy, help you plan for an advertising budget, and more.