E-commerce is booming, and there’s no better time to dive in. But should you sell on Amazon FBA or Walmart Marketplace?
Let’s explore the pros and cons of each, and see how Eva Commerce can boost your business on these platforms.
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E-Commerce Growth: A Perfect Time to Start
E-commerce has grown dramatically over the past decade. Ten years ago, it made up just 5% of all retail sales.
Today, it’s almost 15%, and there’s still plenty of room for growth. If you’re considering starting an online business, now is the perfect time.
However, deciding which platform to use—Amazon or Walmart—can be challenging.
Amazon FBA: The Giant in the Room
Pros of Selling on Amazon FBA
1. Market Size and Reach
Amazon is a behemoth in the e-commerce world. With over $500 billion in sales last year and making up 37% of all e-commerce transactions, Amazon offers unparalleled reach. There are 300 million Prime customers and 2.45 billion monthly page visits, providing a vast audience for your products.
2. Advanced Advertising Tools
Amazon’s advertising platform is robust. Amazon PPC (Pay-Per-Click) allows sellers to advertise their products at the top of search results, paying only when someone clicks on their ad. This tool is incredibly effective, with an average ROI of 4x, meaning for every dollar spent, you earn four dollars in sales.
3. Fulfillment by Amazon (FBA)
FBA is a game-changer. You send your products to Amazon’s warehouses, and they handle storage, packing, and shipping. This service also includes Amazon Prime’s two-day shipping, which significantly boosts sales potential.
4. Easier Entry
Almost anyone can sign up to sell on Amazon. Unlike Walmart, Amazon has a relatively straightforward registration process, allowing sellers from nearly any country to join.
5. Heavy Investment in Marketing
Amazon spends over $100 billion on marketing, driving traffic to their site. This means less marketing effort on your part, as Amazon attracts a massive number of potential customers.
Cons of Selling on Amazon FBA
1. High Competition
With over 9 million sellers, Amazon is highly competitive. However, only about 2.3 million are active sellers, and 1.1 million of those are in the U.S. Still, the competition can be fierce.
2. Higher Fees
Amazon’s fees can add up. Beyond the referral fees (which range from 6% to 15%), there are FBA fees for storage and fulfillment. During peak seasons like Q4, storage fees can skyrocket.
3. Seller Support Issues
Many sellers have reported frustrations with Amazon’s seller support. The support can be slow, and resolving issues can sometimes take longer than desired.
4. Risk of Suspension
Amazon can suspend or ban your account for various reasons, often without warning. This lack of control is a significant risk for your business.
Walmart Marketplace: The Underdog with Potential
Pros of Selling on Walmart Marketplace
1. Growing Platform
Walmart.com is growing rapidly. Last year, Walmart’s online sales increased by 16%, and they made over $50 billion in sales online. Combined with their physical retail sales, Walmart’s reach is substantial.
2. Lower Competition
Walmart has around 150,000 sellers, a fraction of Amazon’s number. Less competition means more visibility for your products.
3. No Monthly Subscription Fee
Unlike Amazon, Walmart doesn’t charge a monthly subscription fee. You only pay a commission on sales, ranging from 6% to 15%.
4. Walmart Fulfillment Services (WFS)
Similar to Amazon FBA, WFS allows you to send products to Walmart’s warehouses. They handle storage, packing, and shipping, offering fast shipping options similar to Amazon Prime.
5. Better Seller Support
Many sellers report better experiences with Walmart’s seller support compared to Amazon. Although experiences can vary, Walmart generally receives positive feedback in this area.
Cons of Selling on Walmart Marketplace
1. Strict Approval Process
Getting approved to sell on Walmart can be challenging. They have a rigorous vetting process, and not all applicants are accepted.
2. U.S.-Only Market
Walmart Marketplace is only available to U.S. customers. This limitation can restrict your business’s growth if you aim to sell internationally.
3. No Drop Shipping
Walmart doesn’t allow drop shipping. You must have your products either on hand or in Walmart’s fulfillment centers.
4. Smaller Audience
While Walmart’s online presence is growing, it still lags behind Amazon in terms of traffic and customer base. Walmart has 11 million Walmart Plus customers compared to Amazon’s 300 million Prime members.
How Eva Can Help
Eva Commerce is a leading eCommerce technology company dedicated to helping brands achieve profitable growth on Amazon, Walmart, and other marketplaces.
Our unique AI platform, combined with expert support, enables brands to optimize their advertising strategies and make data-driven decisions.
Eva’s AI platform is the only context-aware advertising solution that integrates inventory levels, conversion rates, and profitability metrics across all marketplaces, not just Amazon.
Our experts analyze this data to determine the best actions for your advertising campaigns, ensuring maximum efficiency and ROI.
As an Amazon Advanced Partner and Walmart Strategic Solution Partner, Eva also collaborates with industry giants like TikTok, eBay, Shopify, Google, Meta, Wayfair, Faire, and more.
By focusing on profitability, Eva ensures sustainable growth and helps brands invest in the most effective multimedia mix for their marketing efforts.
Unlock Your eCommerce Potential Today
Ready to take your online business to the next level? Try Eva’s powerful AI-driven platform free for 15 days—no credit card needed!
Looking for tailored assistance? If you need specialized support, our agency services and complimentary logistics solutions are designed to propel your brand forward.
FAQs
Fulfillment by Amazon (FBA) is a service where you send your products to Amazon’s warehouses, and they handle storage, packing, shipping, and customer service.
WFS is Walmart’s fulfillment service similar to Amazon FBA. You send your products to Walmart’s warehouses, and they handle the logistics and shipping.
Generally, Walmart has lower fees as there is no monthly subscription fee, and storage fees are often cheaper than Amazon’s, especially during peak seasons.
It’s easier to start selling on Amazon due to their straightforward registration process. Walmart’s approval process is more rigorous.
Currently, Walmart Marketplace is only available to U.S. customers.
Amazon’s advertising tools are more advanced and offer better targeting options, although Walmart is improving its advertising capabilities.
Both FBA and WFS handle inventory management for you once the products are in their fulfillment centers.
Eva Commerce offers expert support to optimize your advertising strategies and make data-driven decisions, ensuring maximum efficiency and ROI.
Eva’s AI platform integrates inventory levels, conversion rates, and profitability metrics to provide context-aware advertising solutions across multiple marketplaces.
Amazon is generally better for new sellers due to its larger customer base and easier entry process. However, Walmart offers less competition and can be a good option as well.
Conclusion
In the battle between Amazon FBA and Walmart Marketplace, there is no clear winner. Both platforms have their strengths and weaknesses.
Amazon offers unparalleled reach and advanced advertising tools, while Walmart provides lower competition and potentially better seller support.
The best strategy might be to utilize both platforms to maximize your reach and sales potential.
By leveraging Eva Commerce’s AI-powered platform and expert support, you can navigate both marketplaces effectively, optimizing your advertising strategies and making data-driven decisions to ensure sustainable growth.
Ready to elevate your e-commerce business? Book a free consultation with Eva Commerce today.
