How Does Walmart Make Money In 2023? (Full List)

As an expert Amazon seller and e-commerce consultant, I‘m often asked how other major retailers like Walmart make money. So in this comprehensive guide, I‘ll break down the full list of how Walmart generates revenue from various streams in 2023 and beyond.

An Overview of Walmart‘s Business

Before diving into the specific revenue channels, let‘s briefly go over Walmart‘s core business…

Walmart started as a single discount store in 1962 but has since grown to become the world‘s largest company by revenue, with over $570 billion in 2021 sales. Today, Walmart has over 10,500 stores worldwide and employs 2.3 million associates globally.

In the US alone, Walmart has 4,700+ stores located within 10 miles of 90% of the population. Impressively, Walmart serves about 230 million customers worldwide each week.

So Walmart makes the bulk of its money by selling consumer goods – everything from groceries to clothing to electronics – at low prices in its massive chain of retail stores.

However, Walmart has been expanding beyond physical retail and now generates significant revenues from e-commerce, memberships, services, and advertising.

Next, let‘s take a detailed look at each of Walmart‘s revenue streams.

1. Revenue From Product Sales

Walmart‘s core business is still its in-store sales of products across a huge range of departments and categories:

• Groceries – Walmart is the #1 grocer in the US with 56.3% of Walmart US sales coming from groceries. This category produced $346 billion in 2021.

• Health and Wellness – Pharmacy, clinical services, over-the-counter medicine and Walmart‘s private label health brand Equate make up 10.4% of sales.

• General Merchandise – Encompasses entertainment, apparel, home goods, hardlines, producing 32.3% of US sales.

• Other Categories – Includes financial services and auto services producing the remaining 0.9% of Walmart‘s US sales.

Some key stats on Walmart‘s physical retail footprint:

• 4,700+ Walmart stores in the US
• 3,570 Supercenter locations with grocery
• 599 Sam‘s Club warehouse stores
• Revenue from US stores – $341 billion
• International stores revenue – $101 billion

By purchasing inventory directly from manufacturers rather than wholesalers, Walmart keeps its product costs low. This huge scale allows Walmart to sell products to customers at lower prices while still generating substantial revenue from its high sales volumes.

2. Revenue From Online Sales

In addition to in-store sales, Walmart also earns revenue through its e-commerce channels:

• Walmart.com – Online sales from Walmart‘s own website accounted for $73 billion in 2021.

• Walmart Marketplace – Third-party sellers on Walmart‘s marketplace platform contributed an estimated $75 billion in 2021. This is an emerging revenue stream with huge potential as Walmart further grows its seller base.

So between first-party and third-party sales, Walmart‘s total global e-commerce sales reached an enormous $218 billion in FY2022 – making it second only to Amazon worldwide.

And Walmart‘s online business is rapidly growing – its Q1 2022 e-commerce sales rose 1% year-over-year while Amazon declined 3% in the same period. This demonstrates how aggressively Walmart is competing for e-commerce dollars.

As an expert seller myself, I recommend retailers diversify across multiple sales channels, and Walmart has done this successfully.

3. Revenue From Walmart Plus Memberships

In September 2020, Walmart launched Walmart+, its competitor to Amazon Prime. For $98 per year or $12.95 monthly, members get benefits like:

• Unlimited free delivery on orders $35+
• Fuel discounts – $0.05 to $0.10 off per gallon
• Early access to deals and restocked inventory
• Contact-free checkout with Scan & Go

Walmart Plus has between 7 – 8 million members currently, providing the retailer with an expanding source of recurring subscription revenue.

Morgan Stanley estimates that Walmart is targeting 16 million subscribers by the end of 2022. At an average of $131 in annual fees per member, that would translate to $2.1 billion in membership revenue.

I expect the subscription program to be a significant long-term revenue driver as Walmart continues adding benefits to grow its member base.

4. Revenue From Services

Beyond just moving product, Walmart also provides various retail-related services that contribute to its earnings.

• Financial Services – Walmart MoneyCenters provide check cashing, money orders, bill pay, tax prep, insurance, credit cards, and other financial services for fees.

• Health Care Services – Walmart operates low-cost medical clinics in select stores offering dental, medical, counseling and optical services.

• Insurance Services – Walmart sells auto, home, renters, pet, and life insurance from providers like Allstate and Humana.

• Advertising Services – We‘ll dive into Walmart Connect ad revenue separately in the next section.

• Vudu Video Streaming – Although Walmart sold this service to Fandango in 2020, it still earns revenue from digital purchases and rentals.

Offering services makes strategic sense for Walmart – it drives foot traffic to stores, deepens customer loyalty, and creates incremental earnings from service fees.

5. Revenue From Walmart Connect Advertising

Walmart Connect is the retailer‘s fast-growing advertising platform that allows suppliers and merchants to promote their brands and products to Walmart shoppers.

Advertisers use Walmart Connect for:

• Keyword-targeted product listings
• Display banner ads
• Search ads
• Online product sampling
• Sponsored product recommendations

Walmart Connect revenue more than doubled from 2020 to 2021. As of February 2022, Walmart indicated its ad business was annualizing at around $1.6 billion in revenue.

And Walmart has bold aspirations to scale it much bigger – it reportedly aims to grow ad revenue to $4-5 billion by 2023. This would make it the third largest ad platform behind Google and Facebook.

For advertisers, Walmart provides a compelling alternative to Amazon because it takes zero commissions on sales driven through Walmart Connect ads. This makes it more margin-friendly for brands versus selling on Amazon.

Overall, Walmart‘s flywheel of first-party data on customers and products positions it extremely well for taking ad market share from competitors like Amazon and Google.

The Future of Walmart‘s Revenue Streams

Looking ahead, here are some of my predictions as an industry expert on how Walmart‘s money-making strategy could evolve:

• Further grow e-commerce to reach 50% of total sales

• Expand services in healthcare, insurance, and finance

• Roll out new Walmart+ benefits to attract more subscribers

• Offer fulfillment services for sellers on its marketplace

• Launch a Amazon Go-like "cashierless store" technology

• Grow advertising into a $10 billion revenue business

• Expand international footprint in high-growth markets like India and China

If you sell consumer products, Walmart should undoubtedly be part of your retail strategy. Its massive customer reach and array of revenue streams make it a powerful partner. Feel free to reach out if you need any specific advice!