The world’s biggest retailer and the world’s most valuable retailer are locking horns and battling it out to become the go-to place for online shopping and online retailing.
Household names Walmart and Amazon have transformed the way we buy and sell online, but with so many similarities between the two (including low prices, fast shipping, and plenty of customers), deciding which brings the best benefits for your eCommerce business can be difficult.
Ultimately, it comes down to how much money you make, which is why we’re looking at the costs of selling on Walmart vs. Amazon.
Walmart vs Amazon
Amazon and Walmart are the leaders when it comes to selling online, with both offering e-retailers attractive facts and figures for selling beyond Shopify. This includes:
With big names and big marketing budgets to match, Amazon and Walmart attract a huge amount of online shoppers. According to Amazon’s latest figures, it receives more than 150 million unique visitors per month, with Walmart not too far behind with 110 million.
Greeting those customers on Amazon are over 5 million sellers worldwide and over 353 million products. Meanwhile, don’t let Walmart’s 15,000 sellers and 80 million products put you off. The lower numbers reflect their more stringent acceptance onto the seller program – guaranteeing customers quality and online sellers less competition.
Both platforms offer plenty of incentives to attract online shoppers including Walmart Free 2-Day Shipping (with no monthly fee or minimum spend required for Marketplace listings), Amazon Prime, and voice shopping through Google Assistant and Alexa.
And the perks aren’t just reserved for online shoppers. eCommerce businesses can benefit from a variety of seller tools, including the buy box, performance ads, and sponsored products.
Walmart vs Amazon: Costs of selling
With both marketplaces offering alluring customer numbers, tools, and promotional opportunities – the next question is how much does it cost to list on Walmart and Amazon. The fees to sell on Amazon and Walmart can be broken down into:
An account fee is a monthly fee sellers pay to appear on Walmart or Amazon.
|Amazon Individual||Free||40 per month||Over 20|
|Amazon Professional||$39.99||Unlimited||Over 20 & can apply for an additional 10|
As you can see, Walmart is the favorite here, with zero monthly fees and unlimited access to listings and categories.
Next, you’ll need to factor in your selling fees. Sales fees are charged on each individual item that is sold through the marketplace and can include a per-item fee, referral fee, closing fee, and high-volume fee.
|Account||Per-item fee||Referral fee||Closing fee||High volume listing fee|
|Amazon Individual||$0.99 per item sold||6%-45% of selling price||$1.80 per media item||$0.005 on items over 100,000|
|Amazon Professional||None||6%-45% of selling price||$1.80 per media item||$0.005 on items over 100,000|
|Walmart||None||6%-20% of selling price||No||No|
Again, Walmart comes out top with lower referral fees and no additional costs.
An important option (and associated cost) to consider is that of fulfillment. Both Amazon and Walmart offer a variety of fulfillment options, with associated pricing:
|Account||Fulfillment options||Fast shipping program eligibility||Multi-channel support|
|Fulfillment by Amazon (fulfillment fee plus monthly storage fee)||Yes||Yes, through Multi-Channel Fulfillment (MCF), with higher fees|
|Preferred fulfillment provider Deliverr (fulfillment fee plus monthly storage fee)||Yes||Yes|
Identify the cheapest option for your business by using a fulfillment calculator to identify whether an all-inclusive fulfillment provider with no added costs, long-term contracts or hidden fees works out cheaper than your own warehousing, staff, packing, shipping, and security costs (as well as your ability to deliver a satisfactory service).
Tip: When considering outsourcing your fulfillment, ask these 16 all-important questions before committing.
Amazon’s storage fee per cubic square feet is $0.69 per month for 8 months of the year, and $2.40 per month in October, November, and December.
If you use Deliverr to fulfill your Walmart orders, Deliverr’s storage fee is $0.75 per cubic square feet per month.
Another consideration is the cost of advertising on both platforms. Walmart Performance Ads and Amazon Sponsored Products and Brands offer a similar CPC format, allowing you to control your campaign budget and spend. Initial indications are that Walmart ads tend to run cheaper than Amazon, as one Deliverr seller found.
“We are getting bids at about ⅓ the cost of similar keyword bids that we are running on Amazon Sponsored Ads.” – Ross Baker, Deliverr seller reaches top of search after activating Walmart Free 2-Day Shipping
Finally, an essential but often overlooked cost is that of competing against other marketplace sellers. Amazon’s larger seller figures mean that you’ll spend more money on CPC campaigns, external marketing, competing for the buy box, and lowering your prices to be seen by potential customers. In comparison, you’ll spend a lot less on Walmart when trying to reach the top spot.
Amazon vs Walmart: Increasing your ROI
Selling on both Amazon and Walmart costs money, which is why it’s important for you to strategically plan how to increase your return on investment when selling on both.
The most obvious way to increase your ROI is to increase your sales conversions. Cart abandonment rates are at an all-time high, with the top reasons for cart abandonment being high shipping costs and slow shipping speed. Improve your sales by offering fast shipping and all-inclusive pricing combinations so that there are no nasty surprises when buyers get to checkout.
Beyond the immediate conversion, it’s important for online sellers to increase their customer lifetime value (CLV) by increasing how long customers stay loyal, how much they spend, and how often they visit. This is achieved through attractive perks such as fast shipping (expected as standard by 63% of online shoppers), excellent customer service, and post-conversion emails.
The higher your search ranking on Amazon and Walmart, the more likely online customers will see and click your listings. Improve the visibility of your listing with fast and free shipping tags, winning the buy box, sponsored products, and glowing product reviews.
Why do online shoppers head straight to Walmart or Amazon? Because it’s name they trust. Why do online shoppers leave? To compare prices. The best way to increase brand recognition and prominence is to appear on multiple sales channels (which also has the added benefit of expanding your reach). Achieve multi-channel selling easily with multi-channel listing tools and fulfillment providers.
Reducing your costs
Finally, it’s time to take a look at your own expenses and how these can be cut by:
- Comparing your self-fulfillment costs (such as warehousing, staffing, and security) with the preferential rates that outsourced fulfillment providers can access;
- Using unbranded packaging to reduced costs and speed up delivery; and
- Contrasting the costs of shipping country-wide yourself, with the volume shipping rates and geographical locations that outsourced fulfillment providers can offer.
Using a big name such as Amazon or Walmart to expand your eCommerce business brings more customers and increased visibility. However, it comes with a cost. Increase your return on investment by shipping faster, leaner, and shipping with an outsourced fulfillment provider like Deliverr.