Walmart vs. Amazon in 2023: An Insider‘s Comparison for Sellers
As an experienced Amazon seller, I‘m often asked about how Walmart Marketplace compares to Amazon from a seller perspective. With Walmart investing heavily in its marketplace, this retail battle is at a fever pitch.
In this guide, I’ll compare Amazon and Walmart across critical ecommerce factors for sellers, including fulfillment, fees, analytics, and more. You’ll get an insider’s view of the pros and cons of selling on Amazon versus Walmart in 2023.
Let’s dive in!
Amazon Leads Overall Ecommerce Sales
First, how do Amazon and Walmart compare in overall ecommerce sales?
Amazon dominates, generating around 40% of total US online retail sales. Walmart comes in second at just under 6% market share.
However, Walmart’s online sales are growing rapidly:
Year | Walmart Ecommerce Sales |
---|---|
2018 | $15 billion |
2021 | $38 billion (est.) |
Meanwhile, Amazon’s year-over-year growth has slowed from the meteoric rise of its early days.
Still, with over 310 million active customer accounts worldwide, Amazon enjoys unmatched scale and Prime loyalty. Walmart+ only has an estimated 32-55 million members in the US.
So if your priority is to reach the most online shoppers possible, Amazon remains the ecommerce leader. But Walmart’s growth makes it compelling.
Walmart Dominates In-Store Retail
Contrast this with brick-and-mortar sales, where Walmart still reigns supreme:
Retailer | Global Store Count |
---|---|
Walmart | ~10,500 |
Amazon | ~615 (Including Whole Foods) |
With its vast physical footprint, Walmart retains the in-store revenue crown–generating over $650 billion in global in-store sales in 2022 compared to Amazon’s estimated $25 billion.
With consumers still doing much of their grocery shopping offline, Walmart’s supercenters give it an advantage in fresh food and consumer packaged goods.
So Walmart remains dominant in brick-and-mortar retail, while Amazon rules ecommerce.
Third-Party Selling: Amazon Has Far More Marketplace Sellers
How do the Amazon and Walmart third-party marketplaces compare for sellers?
Let’s look at some key stats:
Metric | Amazon Marketplace | Walmart Marketplace |
---|---|---|
Active Sellers | ~2.5 million | ~70,000 |
Share of Total Sales | ~60% | ~11% |
As these numbers show:
- Amazon has far more marketplace sellers than Walmart
- And Amazon marketplace sales still dominate overall sales
However, the number of Walmart marketplace sellers grew over 50% from 2020 to 2022. So momentum is clearly building.
Still, Amazon offers access to exponentially more online shoppers for third-party sellers. This gives Amazon much more discoverability and sales volume potential.
Amazon Tops Walmart in Reach and Discoverability
Speaking of discoverability, that’s another major advantage Amazon currently has over Walmart:
- Website traffic: Amazon.com gets 2.3 billion visitors monthly vs Walmart.com’s 258 million
- Mobile users: Around 297 million for Amazon vs. 27 million for Walmart
- App users: Amazon’s app sees hundreds of millions more users than Walmart’s app
With 10 times as much web and mobile traffic, sellers are much more likely to get discovered by buyers on Amazon.com.
Plus, Amazon invests heavily in personalized recommendations algorithms to connect shoppers with products. Walmart lags here.
Clearly, selling on Amazon gives sellers a discoverability edge. But savvy sellers can still find success on Walmart by really optimizing product content.
Fulfillment and Delivery: Amazon Leads the Way
Fulfillment and shipping are crucial to the seller experience. In these areas, Amazon sets the standard.
Selling on Amazon means unlocking Fulfillment By Amazon (FBA) for offsite warehousing, pick and pack, shipping, returns, and Prime delivery eligibility.
Key advantages of FBA include:
- Two-day shipping with Prime
- Free regular shipping on orders $25+
- Fast and free returns for buyers
- Buy Box eligibility: Products shipped by Amazon get premium placement
By comparison, Walmart Fulfillment Services (WFS) has some catching up to do.
Pros of WFS:
- Help listings qualify for 2-day shipping badge
- Order packing and shipping handled by Walmart
Downsides:
- Slower shipping than Amazon in general
- 7-15 day handling time before items ship out
- Must hit volume thresholds for lowest fulfillment rates
- No option for fast one-day/same-day shipping like Amazon
For sellers, Amazon‘s fulfillment strengths make it hard for Walmart to compete. But Walmart continues working to improve its merchant experience.
Advertising and Promotion: Amazon Dominates Here As Well
If you want to invest in advertising to promote your listings, Amazon should be your priority.
Amazon captured over 50% of the US digital ad market share in 2022 thanks to its on-site and off-site ads.
Here are some advantages of Amazon advertising:
- Huge built-in audience of 310 million shoppers
- Advanced targeting by interests, purchase history, and more
- Automatic targeting of competitors’ product pages
- Powerful ROAS metrics backed by customer purchase data
- Seamless integration with listings through Campaign Manager
By comparison, Walmart’s advertising platform is still emerging.
Benefits include:
- Growing user base with lower ad costs
- Targeting by intent and purchase history
- Integrates with Walmart Media Group offsite ads
The downside is Walmart’s smaller customer base, limiting targeting options.
Clearly, Amazon provides sellers unmatched advertising opportunities thanks to its scale and shopper data.
Tools and Analytics: Amazon Leads the Way
To succeed selling online, access to data and insights is crucial. Here as well, Amazon has a major edge over Walmart.
Amazon makes market intelligence available directly within Seller Central. Key tools include:
- Product opportunity analysis: Reveals monthly search volume and sales estimates for keywords
- Listing quality dashboard: Highlights areas for optimization to improve conversions
- Advertising analytics: Tracks ad performance with granular metrics like clicks and ACoS
These tools guide everything from product selection to search optimization to campaign management.
By comparison, Walmart’s data capabilities are limited for now. Sellers must rely more on third-party tools for:
- Keyword tracking
- Competitor price monitoring
- Inventory and supply chain analytics
- Financial performance metrics
Without robust internal analytics, it’s more challenging for sellers to identify gaps and growth opportunities within the Walmart marketplace.
So Amazon provides a significant edge with actionable data to fuel decision-making.
Managing Brands on Amazon vs. Walmart
For major brands, managing intellectual property is crucial across ecommerce channels. Here Walmart may offer some advantages.
Brands often express concerns about:
- Unauthorized resellers on Amazon diluting their brand
- Counterfeits using their name and likeness
- Winning the Buy Box against other sellers
Walmart provides more control for brands with programs like:
- Walmart Continuous Replenishment (WCR): Lets brands ship inventory to Walmart warehouses for listing under official brand storefronts
- Restricted category access: Limits 3rd parties from listing branded products in select categories
However, Amazon is catching up by expanding Project Zero anti-counterfeit tools and the Amazon Brand Registry to help brands take back control over their pages.
So Walmart edges out Amazon for now when it comes to brand authority. But Amazon is making progress.
Walmart Beats Amazon on Groceries, Amazon Leads General Merchandise
One of Walmart’s major retail strengths is its leadership in the grocery vertical.
Walmart captures nearly 25% of the US grocery market share, while Amazon takes just 2%. Even with Whole Foods, Amazon has struggled to gain grocery market share offline and online.
Walmart‘s Omnichannel grocery strategy leverages:
- Curbside pickup offered at over 3,000 stores nationwide
- Delivery from over 2,800 stores reaching 65% of US households
- In-store grocery with convenience of 190 million store visits annually
As a result, Walmart is the #1 seller of groceries in the US – a key advantage over Amazon.
However, Amazon leads general merchandise sales both online and offline. Analysts estimate Amazon captures 43% of all US online general merchandise sales.
So sellers looking to win big in grocery should consider Walmart. But Amazon opens up more opportunity in other merchandise categories.
Amazon Prime Beats Walmart+ for Membership Programs
Amazon Prime and Walmart+ are membership programs providing free shipping and other benefits. Which offers sellers more potential value?
Worldwide Amazon Prime members: ~200 million
US Walmart+ members: ~32-55 million
With 6 times as many members, Amazon Prime is much larger. Prime also offers big advantages:
- Video streaming: Included with Prime, drives adoption and retention
- Faster baseline shipping: 1-day shipping on more items and zip codes than Walmart
- More benefits: 5% back on Amazon Visa card, exclusive deals, photo storage
However, Walmart+ has some unique features Prime lacks:
- Fuel savings: $0.05 to $0.10 discounts per gallon at Exxon, Shell, and Murphy stations
- Rx for Less: Free and discounted prescriptions including generics and insulin
- In-store perks: Scan & Go mobile checkout to skip lines
Still, Prime drives higher loyalty and engagement that sellers benefit from. But Walmart+ offers areas for growth.
Seller Fees: Walmart Is Cheaper But Captures Less Value
Let’s compare the seller fee structures for Amazon and Walmart:
Fee | Walmart | Amazon |
---|---|---|
Referral Fee | 6-20% | 8-45% |
Shipping Commission | Determined by carrier rates | Fulfillment fees |
Payment Processing | 2-3% + $0.30 per transaction | 2.9% + $0.30 per transaction for third-party processors |
Subscription | $39.95/month Pro plan required | No subscription fee |
With lower referral rates and month-to-month plans available, Walmart’s fees are generally cheaper than Amazon‘s. This helps lower the barrier to entry.
However, Amazon’s higher commissions capture more value. With Fulfillment by Amazon, sellers offload fulfillment while Amazon handles world-class logistics.
And there’s no need for a Pro subscription on Amazon unless you want the benefits. So weigh the fee differences against each company‘s unique offerings.
Omnichannel Retail: Walmart Leads In-Store But Amazon Catching Up
A true omnichannel retail presence combines physical stores with digital commerce. Here‘s how Walmart and Amazon compare on omnichannel initiatives:
Walmart Omnichannel Capabilities
- Stores nationwide acting as fulfillment centers for pickup and local delivery
- Seamless app experience with shopping features extending into stores
- Style recommended by influencers available to try on in stores
- Pharmacy, vision, auto, and other in-store services drive traffic back to stores
Amazon Omnichannel Capabilities
- Whole Foods locations positioned as grocery pickup hubs
- Amazon physical bookstores, 4-star, and other concept stores
- Plans for department-store style Amazon apparel stores with high-tech fitting rooms
- Amazon Salon bringing consumer insights gleaned from ecommerce into a real-world setting
For now, Walmart’s vast store network makes it the omnichannel leader. But Amazon is rapidly bridging online and offline channels.
Which Retailer Is Best to Sell on in 2023?
After comparing Amazon and Walmart across all these factors, which retailer looks most promising for third-party sellers in 2023?
Sell on Amazon If You Want…
- Exposure to hundreds of millions more online shoppers
- Established Prime loyalty driving conversion and retention
- Best-in-class fulfillment and fast Prime shipping options
- Powerful advertising platform and robust ecommerce analytics
- Higher sales volumes and more revenue potential in general merchandise
Sell on Walmart If You Want…
- Early-mover advantage in smaller but faster growing marketplace
- Great supply chain integrations for companies already selling wholesale to Walmart
- Walmart’s positioning for weekly grocery trips and budget-conscious shoppers
- Focus on niche CPG/grocery categories where Walmart leads
- Avoid over-saturation in crowded Amazon categories
Ultimately there’s no one-size-fits all answer. The best approach is selling on both Amazon and Walmart to maximize reach. But the factors above can help you determine which retailer to prioritize.
The Battle Rages On
While Amazon maintains the overall ecommerce crown today, Walmart continues to leverage its unmatched store footprint to drive online growth.
I hope this insider’s comparison helps sellers understand the pros and cons of each marketplace. Selling on Amazon and Walmart both have advantages – it all depends on your business goals.
By harnessing the unique strengths of each channel, brands can build robust omnichannel strategies reaching even more customers. The ultimate retail winner will be the one offering sellers the tools they need most to prosper.