{"id":85061,"date":"2021-03-18T10:17:32","date_gmt":"2021-03-18T15:17:32","guid":{"rendered":"https:\/\/www.junglescout.com\/?p=85061"},"modified":"2023-04-25T15:17:42","modified_gmt":"2023-04-25T20:17:42","slug":"selling-on-walmart-vs-amazon","status":"publish","type":"post","link":"https:\/\/www.junglescout.com\/blog\/selling-on-walmart-vs-amazon\/","title":{"rendered":"Should You Sell on Walmart or Amazon?"},"content":{"rendered":"\n

As many of us know, ecommerce took a turn for the better in 2020. As retail stores closed, consumers took to online retailers like Amazon, Walmart, <\/span>eBay<\/span><\/a> to shop for essential items—and some <\/span>not-so-essential<\/span><\/a> items, too.<\/span><\/p>\n

While retail stores are beginning to open back up to eager in-store shoppers (great news for local small businesses), <\/span>nearly half of consumers<\/span><\/a> say they would be fine if they never shopped in a physical store again. This, of course, is great news for ecommerce sellers.<\/span><\/p>\n

Two ecommerce platforms in particular will continue to take off in popularity in 2021 and beyond: Amazon and Walmart Marketplace<\/a>. <\/span>39% of Amazon sellers<\/span> are considering selling<\/a> on Walmart in 2021—should you? <\/span><\/p>\n

In this article, we will review both the differences and similarities between <\/span>selling on Amazon<\/span><\/a> and <\/span>selling on Walmart<\/span><\/a> to determine which is the best option for your business. <\/span><\/p>\n

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Differences between Selling on Amazon & Selling on Walmart<\/b><\/h2>\n

Difference #1: Seller competition <\/b><\/h3>\n

It is much easier to register for an <\/span>Amazon seller account<\/span><\/a> than for a <\/span>Walmart seller account<\/span><\/a>. <\/span><\/p>\n

With Amazon, anyone can register to sell and have a product listed within a few days. By contrast, you need to apply and be approved before you can sell on Walmart.com.<\/span><\/p>\n

Also, Walmart’s requirements to sell are much stricter than Amazon’s. To apply for a Walmart seller account, you must have a registered business in your state, as well as a US Business Tax ID (your SSN will not be accepted as it would be on Amazon.)<\/span><\/p>\n

Because of the extra hurdles you have to jump through to sell on Walmart, there are fewer sellers to compete with. Walmart.com currently has around 33,000 sellers, versus Amazon’s 2 million sellers.<\/span><\/p>\n

According to Walmart, because Walmart Marketplace is less saturated, their sellers receive roughly 13 times more monthly visitors than Amazon sellers. <\/span><\/p>\n

Winner: Walmart<\/b><\/p>\n

Difference #2: Monthly subscription fees<\/b><\/h3>\n

Amazon has two different <\/span>selling plans<\/span><\/a> to choose from when registering for an account—individual or professional. While the individual account is free to maintain, you are still charged $0.99 per product sale, and you can’t run <\/span>PPC advertisements<\/span><\/a> or compete for the <\/span>Buy Box<\/span><\/a>. <\/span><\/p>\n

We recommend Amazon sellers sign up for the professional account, as it offers more features than the individual plan, and more opportunities for success. The catch is that professional accounts come with $39.99 monthly fees. This may sound like a lot at first, but it’s worth it considering the benefits.<\/span><\/p>\n

Walmart Marketplace, on the other hand, <\/span>does not<\/span><\/i> charge sellers a monthly subscription fee. <\/span><\/p>\n

Walmart charges sellers just a fixed referral fee per sale (typically 15% of the product’s sale price), plus fulfillment fees if you are using Walmart Fulfillment Services (WFS). <\/span><\/p>\n

Winner: Walmart<\/b><\/p>\n

Difference #3: Selling fees<\/b><\/h3>\n

Compared to Amazon and even eBay, Walmart’s selling fees are much more straightforward.<\/span><\/p>\n

Walmart Fees:<\/b><\/p>\n

As we mentioned above, Walmart does not charge a monthly subscription fee to sell on their platform. On top of that, they have a simple <\/span>referral fee<\/span><\/a> structure. <\/span><\/p>\n

In most categories, you can expect to pay 15% of the sale price on each product sold through the marketplace. If you are fulfilling the orders yourself, then you’ll only have to worry about paying the referral fee (you’ll handle your own shipping costs.) No other hidden or complicated fees to understand. <\/span><\/p>\n

Now, if you are using WFS (Walmart’s equivalent to Fulfillment by Amazon), you will be on the hook for additional fees associated with this service. <\/span>Walmart claims<\/span><\/a> WFS is a competitive and cost-effective solution that will save sellers on fulfillment costs. <\/span><\/p>\n

While Walmart does not share their fulfillment fee structure, they state that the storage and fulfillment fees are based on the weight and dimensions of your product alone. <\/span><\/p>\n

Amazon Fees:<\/b><\/p>\n

Similar to Walmart, Amazon charges a referral fee for each item sold. That fee also comes out to 15% for most <\/span>categories<\/span><\/a> on Amazon. <\/span><\/p>\n

Amazon also allows sellers to choose between fulfilling orders themselves or paying Amazon to handle fulfillment (<\/span>FBM and FBA<\/span><\/a>, respectively). The major difference between Walmart’s fees and <\/span>Amazon’s fees<\/span><\/a> comes down to whether sellers choose FBA. While you’ll also have to pay storage and fulfillment fees, they’re structured a bit differently. <\/span><\/p>\n

Let’s take a look at one of Jungle Scout’s <\/span>Million Dollar Case Study<\/span><\/a> products, <\/span>Jungle Stix<\/span><\/a>, to get a better understanding of how Amazon’s fees differ for FBM and FBA. <\/span><\/p>\n

Currently, Jungle Stix are listed for $29.95 on Amazon. Using <\/span>Amazon’s FBA Revenue Calculator<\/span><\/a>, I can enter that price to see how the fees are broken down for both Fulfillment by Merchant and Fulfillment by Amazon. <\/span><\/p>\n

Note<\/b>: The total cost for ‘Your Fulfillment’ (FBM) does not include shipping. If you choose to sell FBM, you will have to factor in shipping expenses when determining your profit margin.<\/span><\/p>\n

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Selling via FBM, the only fees you would be responsible for are the “Selling on Amazon fees”, which includes ‘Amazon Referral Fee’ and the ‘Variable Closing Fee.’ <\/span><\/p>\n

FBA sellers are also responsible for these two fees.<\/span><\/p>\n

On top of the Selling on Amazon fees, FBA sellers are also required to pay a ‘Fulfillment by Amazon fee’ that is calculated based on the weight and dimensions of your product. This fee covers ‘Monthly Storage’ and ‘Fulfillment.’<\/span><\/p>\n

To sell Jungle Stix with FBA, Amazon charges us $9.02 per sale (not including monthly storage fees.) If we sold this product through FBM, we would pay Amazon just $4.49 (not including shipping costs to the customer.)<\/span><\/p>\n

Additional fees:<\/b><\/h4>\n

Monthly storage fee: Amazon will charge sellers at the end of each month based on the amount of inventory in an Amazon warehouse.<\/span><\/p>\n

Long-term storage fee: Amazon conducts inventory clean-ups on the 15th day of each month. During the clean-up, Amazon records any products that have sat in their fulfillment centers for 180 days or longer, and then charges sellers $6.90 per cubic foot of storage used. Products that have been in Amazon’s warehouses for longer than 365 days incur a charge of $0.15 per unit.<\/span><\/p>\n

Refund administration fee: If you refund a shopper for a product for which you have already been paid, Amazon will refund you the amount of the referral fee you paid,  minus the refund administration fee, which is either $5.00 or 20% of the applicable referral fee, whichever is less. <\/span><\/p>\n

Winner: Walmart<\/b><\/p>\n

Difference #4: Business requirements<\/b> <\/span><\/h3>\n

As we mentioned above, the competition amongst sellers is a lot steeper on Amazon than on Walmart. Registration eligibility requirements have a lot to do with that discrepancy.<\/span><\/p>\n

Walmart Requirements<\/b><\/a>:<\/b><\/p>\n

Walmart is not a beginner-friendly marketplace. You must be an established business in order to apply. Here are the qualifications and documents you’ll need to register:<\/span><\/p>\n