Ecommerce has become the norm for shopping. Especially after the recent pandemic, when retail shops closed down; and people turned to online shopping.
Well, the pandemic is almost over, but people are not in the mood to go back to physical shopping. The convenience and ease of online shopping are unmatchable; nearly half of the consumers said they won't choose physical shopping again.
Now that's good news for the eCommerce sellers! And a cue for businesses who do not have an online presence yet.
Amazon and Walmart
Now, speaking about the online marketplaces, the most popular ones are Amazon and Walmart. While Amazon is the market leader and most profitable eCommerce site in the world, that doesn't necessarily mean it's the best place to sell. When it's between Amazon and Walmart, both have their pros and cons.
Amazon started as a platform to sell books online. Now it's the biggest eCommerce marketplace in the world that sells everything known and unknown.
What made Amazon a great success is the efficient supply chain and policies, not to forget their huge customer base.
Amazon Marketplace offers several fulfillment options to its sellers. The most popular one is fulfillment by Amazon. In this method, Amazon takes the sole responsibility for order fulfillment by allowing customers to send their inventory to Amazon, where the packing, shipping, and all related activities will be fulfilled by Amazon staff.
Amazon FBA also takes care of the returns and customer support, which makes it a hugely beneficial option for small and medium-scale sellers. Also, FBA sellers can enjoy special privileges in the Amazon marketplace. They can display their prime badge and will get better visibility in search results.
If a seller wishes to fulfill their orders by themselves, there is an option for them too. Amazon fulfillment by merchants allows sellers to control their inventory and supply by themselves without having to depend on Amazon. But you'll need a very efficient supply chain and delivery system to be successful.
Costs related to Amazon
The various costs incurred by the sellers for selling on Amazon are known as the Amazon cost. The Amazon costs vary from seller to seller, depending on the product they are selling and the fulfillment option they choose.
The costs associated with amazon selling are.
Subscription fee: A seller has to pay A subscription cost of $39.99 a month on entering Amazon.
Referral fees: On sales of a product, sellers are charged between 6% and 45% of the final sale price.
Closing fees: Media products like books and DVDs should pay a flat fee of $1.80.
Processing fees: every time amazon issues a refund, Sellers have to pay $5.00 or 20% of an item’s sale price every time Amazon issue a refund.
Other than this, sellers who sign up for FBA services have to pay additional fees like fulfillment fees, returns fees, monthly storage fees, and long-term storage fees.
Now let's take a quick look at Walmart's online marketplace.
Select an Image
Walmart is a giant in the retail business and expanded its operations online in 2009. Although it is nowhere near Amazon, they are growing five times faster than Amazon.
Just like Amazon, Walmart also has a fulfillment option for its sellers, where they can depend on Walmart to store, ship, and manage the supply of their products. The only difference is that Walmart only accepts shipments from within the US.
The maximum size and weight of the shipment are also different from Amazon. It's much smaller. It is a disadvantage for sellers with heavy products.
However, Walmart has a unique fulfillment option, which allows the sellers to store and ship their products themselves while Walmart manages the listing, pricing, and content. This feature is exclusive to Amazon.
Costs related to Walmart
Unlike Amazon, selling on Walmart doesn’t involve monthly subscription or return processing fees. After signing up, sellers should pay a referral fee whenever a product is sold.
Referral fees: Sellers should pay between 6% and 20% on each sale, depending on the product type.
If the seller signs up for Walmart fulfillment, he will have to pay additional fees like fulfillment fees, monthly storage fees, and long-term storage fees.
Selling on Amazon v/s Walmart
Now that we have understood the basics of both marketplaces, let's look at the differences between selling on Amazon and Walmart.
The registration process on Amazon is much easier than that of Walmart. A seller has to be verified by Walmart before getting approved as a seller. But there are no such criteria on Amazon. Also, the seller requirements of Walmart are stricter than that of Amazon. Because of all these factors, Walmart has a lesser competition for sellers.
As mentioned above, Amazon has more selling fees than Walmart. Where Amazon's fee starts with a monthly subscription fee, Walmart only has the referral fee.
Walmart offers a personalized account management option with customer support and a WFS fulfillment expert who gives recommendations about business optimization and growth;
and on Amazon, you can avail of this service with a monthly subscription.
Being an international marketplace, Amazon has a big customer base, whereas Walmart is growing exponentially over time.
While there are some pros and cons to both selling platforms, it's undeniable that having a presence on both marketplaces provides sellers with huge benefits. However, where to focus more certainly depends upon your products, business model, and warehouse locations. Whatever you choose, you can consult XENA intelligence to boost your sales in any online marketplace. We hope this helps you in better decision-making for your business. Happy selling!