Walmart vs. Amazon: What Sellers Need to Know
In recent months, Walmart has made a concerted effort to challenge Amazon’s dominance in the online selling marketplace. As a serious online seller, you may be wondering how the two retail giants differ in their approach to online sellers. Among other questions, you may want to know:
- Which company’s entry requirements are easier to navigate?
- What types of sellers do best on each site?
- If I am a current Amazon seller, will I be able to adapt to Walmart’s fulfillment policies and procedures?
Barriers to Entry for selling on Walmart
Barrier to entry is the biggest difference between Amazon and Walmart right now. Currently, Walmart maintains very strict requirements for its new sellers. In order to sell on Walmart Marketplace, you must be “invited” by the company. The process can take up a month to complete.
At first glance, this can be frustrating, especially if you are eager to sell your product or working against a seasonal deadline. However, the company has a good reason to vet its sellers thoroughly – namely its reputation. Opening the floodgates to dishonest or low-quality sellers can wreak havoc with Walmart’s reputation online, in the press and, ultimately with their customers. In addition, if you do make it through the process, you can take pride in knowing that you have passed the entrance exam of the largest retailer on the face of the planet!
Another factor to consider is that since Walmart is relatively new to the online marketplace, the company wants to ensure that its sellers already have an excellent reputation on Amazon and eBay. To qualify, you should have an order defect rate of below 1%. You seller feedback must be stellar as well. In terms of size, you should be attracting traffic in the thousands and be able to show high levels of monthly revenue.
For those that make it, the process is well worth the effort. For one thing, you will face less competition once you are listed. Walmart’s third-party sellers number in the low thousands. By contrast, Amazon works with 2 million third-party sellers. The immediate benefit is that your chances of standing out on Walmart are much greater than on Amazon.
Understanding the right niche for each site.
Walmart’s selling proposition focuses on price. One application of this is that the Walmart Buy Box is granted to the company that offers the lowest price. Amazon takes other factors into consideration, such as performance, sales, fulfillment and defect rate, and a number of other variables before awarding its Buy Box.
Product choice is another difference between the two sites. Amazon, with 260 million SKUs, is known as the “Everything Store.” At the same time, remember Walmart’s brick-and-mortar slogan: Save money. Live better. While selection is wide, product categories are more or less limited to home décor, kitchen supplies, tools, electronics and affordable clothing. This means that certain types of higher end luxury brands are unlikely to make it to Walmart Market place. Walmart also prefers brand owners over retailers, favoring sellers that offer specific products associated with a unique brand name.
By contrast, three types of sellers/products tend to do well on Amazon:
- Unique or private-label products such as custom jewelry.
- Hobby or niche products
- Used or refurbished products
Fulfillment & Integration
Walmart is adopting a similar process to Amazon regarding packaging and shipping products to its customers. However, the devil is in the details. Most sellers fall into the trap of rushing to through the initial set up and integration process without paying attention to the details. This is a recipe for disaster – and you will find this out almost as soon as your first sales start coming in. To be successful in operating on both platforms you need to stay consistent with listings, pricing, inventory management, order processing and completion.
Instead of going it alone, speak with a representative at SellerCloud about your integration needs. We have the expertise to determine your compatibility with both Amazon and Walmart Marketplace. Your investment at the beginning of this process can mean the difference between huge sales growth or dropping off the sites and flat-lining your business.