Amazon vs Walmart: Selecting the Ideal Marketplace for Your Ecommerce Venture

In 2024, the e-commerce landscape continues to evolve, with Amazon and Walmart leading the charge as two of the most dominant marketplaces. In this article, we delve into a detailed comparison between selling on Amazon vs Walmart, examining each platform's unique features, benefits, and challenges. Whether you're a seasoned seller or new to online retail, understanding these differences is crucial for tailoring your strategy and maximizing your success in each marketplace. Let's explore what differentiates Amazon from Walmart in the current e-commerce scene.

When comparing the benefits of selling on Walmart.com vs Amazon.com, several key factors emerge, including market share, shopper demographics, customer service, fees, and selling tools.

Market Share and Shopper Demographics - Walmart Vs. Amazon

Amazon dominates the e-commerce landscape with a more extensive reach and a higher number of active sellers. As of 2023, Amazon had around 493,000 active U.S. sellers, with a significant portion based abroad, intensifying price competition. Amazon's customer base tends to be slightly higher-income, partly due to the cost of Amazon Prime.

Walmart, while growing in e-commerce, still trails Amazon in terms of market share. Walmart.com attracts a diverse range of shoppers, and despite its traditional brick-and-mortar stores being popular among low-income shoppers, this trend does not necessarily translate to its online marketplace. A 2020 survey found that 45% of Walmart+ subscribers also have an Amazon Prime account, indicating overlap in customer bases. One short statistic tells it all. In the end of 2023 Amazon had roughly 37.6% ecommerce market share while Walmart was in second place in single-digits at 6.4%. This disparity is humongous.

Customer Service - Walmart Vs. Amazon

Amazon has a well-established customer service system, bolstered by its comprehensive digital platform and push into physical retail spaces. It is considered one of the most trusted and loved companies in America.

Walmart also offers robust customer service, with options for free shipping on orders over $35 and a variety of payment methods. Its customer service is not as terrific as Amazon; if you have ever returned something at Walmart.com, you know exactly what I am referring to.

Fees - Walmart Vs. Amazon

Amazon's fee structure includes a 99 cents per item sold or a standard fee of $39.99 per month, along with referral fees, variable closing fees, storage fees, and other costs. Fulfillment by Amazon (FBA) adds additional fees based on product weight, size, and selling channels.

Walmart is known for its transparent fee structure, with no setup, monthly, or hidden fees. Sellers pay a referral fee of 6%-15% per sale, and additional costs for Walmart's fulfillment service, depending on product characteristics.

Selling Tools and Ease of Selling - Walmart Vs. Amazon

Amazon provides a variety of selling models, including 1P, 2P (Fulfilled by Amazon), and 3P (third-party selling), with tools and resources to assist sellers in managing their operations.

Walmart also offers similar selling models, with the addition of a dropshipping option. However, qualifying as a Walmart seller is more challenging, requiring a history of e-commerce experience, reputable customer service, and competitive pricing.

Amazon's marketplace is more extensive with a broader customer reach but comes with a more complex fee structure and intense competition.

Walmart, while smaller in scale, offers a more straightforward fee system and less competitive environment but requires more stringent qualifications for sellers. The tools for brand owners, the data available on customer metrics, the complexity of the advertising platform, and the customization of information on the product detail page make for a much better selling and shopping experience on Amazon.com. Amazon continues to invest billions of dollars (with a B) into AI, which will prove to keep it the dominant force in online shopping.

As of 2024, when comparing the speed and ease of use of Amazon.com and Walmart.com, along with the strength of their respective algorithms, several points stand out.

Website Experience and Ease of Use - Amazon Vs. Walmart

Amazon is recognized for providing a more refined and specific search experience. It offers a list of suggested search terms as you type and allows searching by department, which Walmart does not.

Amazon's site also excels in data refinment, allowing users to filter by criteria such as Prime eligibility, brand, size, customer review, and more, enabling users to find what they're looking for more quickly.

The checkout process on Amazon is streamlined with features like 1-click ordering and clear display of delivery dates and shipping costs. Payment options are diverse, including major credit cards, store or gift cards, and direct checking account payments.

Walmart's website, while easy to navigate, doesn't offer the same level of search refinement or the intuitive feel that Amazon's site does. However, it does provide clear shipping details and various payment options, including a "cash" option for in-store pickups.

Website Speed - Amazon Vs. Walmart

Specific comparative data on the speed of Amazon and Walmart's websites as of 2024 is not readily available. However, both companies have been investing in their online platforms, suggesting that they are likely optimized for user experience and speed. Based on numerous attempts at shopping on Walmart.com, I find that the overall experience is delayed. Search results are slow to populate, detail pages are slow loading, and the checkout process is longer; overall, I think this slow sales experience is detrimental to their sales.

Algorithm Strength - Amazon Vs. Walmart

Amazon has been known for its sophisticated algorithms, like the A10 algorithm, which are designed to enhance the customer shopping experience by offering personalized recommendations and efficiently managing search results.

Walmart, while also focusing on improving its online presence, may not have an algorithm as advanced as Amazon's. However, Walmart's physical store presence enhances its online capabilities, particularly for services like 'click & collect'. The in-store presence gives some advantages to Walmart.com but does not outdo the very noticeable advancements in the Amazon Algorithm.

Advertising - Amazon Vs. Walmart

Both Amazon and Walmart.com have an ad platform to promote your products on thei respective sites. The Walmart.com system is a simpler version and comparable to the Amazon ad platform 10 years ago, whereas the Amazon ad platform is very advanced. It offers advertising options for both on-and off-site, retargeting, display ads, ability to launch ads on Fire-TV and Fire Devices, kindles, multiple placements on the product detail page and the amount of comprehensive ad data from these campaigns leaves the Walmart platform in Amazon’s dust. To put this in perspective, the advanced sellers know this, which is why Amazon is widely considered the largest Advertising Agency in the world. The total ad dollars spent on Amazon supersede that of any other platform or venue. Amazon in turn is also the largest spender of ad dollars in the world, with over $20 Billion in ads spend in 2022.

With this in Mind, Where are You Going to Put Your Energy?

Amazon.com seems to have an edge in terms of website user experience, search refinement, and algorithm sophistication. Walmart.com, while competitive, doesn't quite match Amazon in these aspects but offers its own strengths, particularly in integrating its online and physical store services. Utilizing an Amazon consulting agency can help you maximize these advantages on Amazon, ensuring your brand capitalizes on the platform's superior user experience and sophisticated algorithms.