Amazon vs Walmart: Which E-commerce Platform is Right for Your Online Store?

The decision to start an online store on Amazon or Walmart can shape your e-commerce success. Both platforms offer unique advantages and cater to different seller profiles, but which one is the best fit for you? Let’s dive into the details, backed by statistics and data, to help you make an informed choice.

1. Understanding the Platforms

• Amazon: As of 2024, Amazon is the largest e-commerce platform in the world, accounting for nearly 39.5% of the U.S. e-commerce market share. With over 300 million active customer accounts and a presence in 18 countries, Amazon provides sellers with a vast global audience.
• Walmart: Walmart is rapidly expanding its online presence, holding about 6.3% of the U.S. e-commerce market share. With 150 million weekly customers shopping both in-store and online, Walmart is a formidable competitor. Its marketplace growth rate was 50% year-over-year as of 2023, showing its increasing appeal to sellers.

2. Target Audience

• Amazon: Amazon attracts a diverse range of customers. According to a recent survey, 82% of U.S. households have an Amazon Prime membership. Amazon shoppers are often willing to pay a premium for convenience and fast shipping.
• Walmart: Walmart is known for its value-focused audience. About 59% of Walmart's online shoppers are looking for lower-priced options. The average Walmart customer is more budget-conscious, which can benefit sellers with competitively priced products.

3. Seller Requirements

• Amazon: Amazon’s platform is open to almost all sellers. In 2023, Amazon had over 2.5 million active sellers. While this means higher competition, it also allows new sellers to enter the marketplace more easily.
• Walmart: Walmart's marketplace is more selective, with around 100,000 sellers as of 2023. Walmart requires a strong e-commerce history, reliable fulfillment, and competitive pricing. This selective process can work in favor of sellers who meet the criteria, as it reduces competition within the marketplace.

4.  Fees and Pricing

• Amazon: Amazon charges referral fees, ranging from 6% to 45% depending on the product category, with an average of 15%. In addition, Fulfillment by Amazon (FBA) fees vary based on the size and weight of products. Sellers also have the option between an Individual plan ($0.99 per item sold) and a Professional plan ($39.99/month).
• Walmart: Walmart charges a referral fee between 8% and 15%, generally lower than Amazon's, depending on the product category. Walmart doesn't have monthly subscription fees, and while they offer Walmart Fulfillment Services (WFS), their program is still growing compared to Amazon's FBA.

5. Fulfillment and Logistics

• Amazon: Amazon's FBA network is extensive, with over 185 fulfillment centers worldwide. FBA can significantly boost your sales by making products eligible for Amazon Prime. According to a study, sellers using FBA see an average 30-50% increase in sales.
• Walmart: Walmart Fulfillment Services (WFS) is growing, but not as extensive as FBA. However, 71% of Walmart's online shoppers prefer free two-day shipping, making WFS a valuable option for increasing sales and customer satisfaction.

6. Brand Exposure and Marketing

• Amazon: Amazon offers robust advertising tools like Sponsored Products, Sponsored Brands, and Sponsored Display. Amazon's advertising revenue reached $31 billion in 2023, indicating the platform's vast marketing potential. Sellers using these tools can significantly increase product visibility.
• Walmart: Walmart's advertising capabilities are expanding, with Walmart Connect generating over $2 billion in revenue in 2023. While not as mature as Amazon's, Walmart's advertising platform can be a cost-effective way to gain visibility, especially with less competition.

7. Competition and Market Saturation

• Amazon: With over 2.5 million active sellers, competition on Amazon is fierce. However, 80% of Amazon sellers are profitable, showing that despite the competition, there's room for success with the right strategies.
• Walmart: Walmart's marketplace has fewer sellers, making it less saturated. The smaller seller base means Walmart offers more opportunities for product visibility. Sellers with a strong track record can thrive in this environment.

8. Which Platform is Best for You?

• Amazon is Best If:
• You want access to a vast, global customer base.
• You prefer a well-established fulfillment service (FBA).
• You're willing to invest in advertising to stand out in a competitive market.
• Walmart is Best If:
• You have a proven track record in e-commerce.
• Your products align with Walmart's value-driven customer base.
• You prefer a less crowded marketplace with strict quality standards.

9. Conclusion

Choosing between Amazon and Walmart depends on your business goals, product type, and willingness to navigate each platform's ecosystem. Amazon offers a larger audience and advanced fulfillment options but comes with higher competition and fees. Walmart provides a less saturated marketplace with a growing online presence and lower fees but has stricter entry requirements. Evaluate your products, target audience, and long-term business strategy to determine which platform suits your needs best.

Ready to Launch Your Online Store?

Whether you choose Amazon or Walmart, having the right support can make all the difference. At EcomXpertz, we specialize in setting up and managing successful online stores on both platforms. Contact us today to learn how we can help you build a profitable e-commerce business tailored to your goals.