One of the reasons for Amazon's success has been due to their addition
of a third party sales channel,
which really just means sellers like you and I can sell on their website.
We can also do so using their fulfillment services
through a program called FBA -- Fulfilled by Amazon.
But two rival retailers have taken notice and followed a similar strategy
in an effort to dethrone Amazon in this area.
One standout has been Walmart.
So you may be thinking about starting or you may already
be running an e-commerce company and you're wondering,
“Should I sell on Amazon FBA or the Walmart marketplace?”
Well, you're in luck because by the end
of this video you will know which is easiest to sign up for,
which has the lowest selling fees, which is easiest to send inventory to,
which one customers buy from most,
which has lower competition, which has the lowest fulfillment fees,
which has the lowest cost advertising and which has the fastest fulfillment.
All so that you can decide on the best direction for your business.
And if you do value this info,
please return the favor by dropping this a quick like for me.
But let's jump straight in.
Let's begin with the basics.
Now, Amazon needs no introduction on this channel.
Most of you know how this works, but when it comes to Walmart --
Walmart is a juggernaut in the
traditional retail space with over 5000 stores across the US.
But its share of e-commerce is still relatively small.
It actually launched its e-commerce wing called the Walmart Marketplace in 2009,
and that also opened the doors to third party sellers.
And in 2020 the company launched a very similar system to FBA,
but it's known as WFS shortfall Walmart Fulfillment Service.
This allowed sellers to send in their inventory as you do with Amazon FBA
and then have their fulfillment systems actually fulfill your orders to customers.
So as a seller, theoretically, you can sell on both.
But more on that in a moment.
Our first big question, which do customers buy from most?
Amazon and by far.
But there were some surprises here.
Amazon currently controls almost 56.7%
of the e-commerce market in the US, making it by far the leader in the space.
Walmart is in second but had just 6.2%.
But while Amazon does dominate when it comes to products like appliances or electronics,
Walmart does hit back when it comes to other product categories like food and beverage.
And it's also worth noting that a major benefit to Amazon
is your ability to reach international customers.
You can add almost 20 other country marketplaces
to your Amazon seller account.
By contrast, as a third party Walmart marketplace seller using WFS
instead of FBA, you can currently only do this within the contiguous US.
So Walmart isn't an option if your customers are based elsewhere --
that is outside the U.S.
So which do customers buy from? Most definitely Amazon.
They're going to get a point here.
Our next question here is, which is easier to sign up for?
That is Amazon.
Applying to sell on Amazon, although sometimes it does have a rocky verification process,
is really as simple as completing the sign up process online
and providing a few verification documents.
Additionally, you can also sign up to sell on Amazon as an individual,
you as your person or as a business, for example, an LLC.
Whereas Walmart is far more selective in this process
and in who they let in.
Only registered businesses can apply and they also want to see that
you're already selling products that they would want added to their catalog.
So overall here, Amazon is simply a sign up. While Walmart is an actual application.
And one of the lessons we regularly update
inside our Amazon FBA Mastery membership is exactly how to sign up
for your Amazon account while avoiding all of the time consuming mistakes.
But this is just one of the very first lessons that's followed by over
a hundred in-depth training videos focused on sharing with you
how best to sell on Amazon.
If that does sound interesting, if you want to learn more about that,
check it out in the pinned comment right below this video.
But in summary here, which is easiest to sign up for?
Definitely Amazon with another point here.
That brings us to our next question, which has lower competition?
Now, one way we can loosely measure
this is with the number of active sellers on each.
Now, since Walmart is a US only, we will focus on Amazon US, Amazon.com sellers.
Currently, Amazon has anywhere between 1.1 – 1.5 million sellers active on the US platform,
whereas Walmart; the Walmart marketplace currently only has 130,000 active sellers.
So based on these numbers, basically there are ten times more sellers on Amazon
as opposed to Walmart making Amazon much more competitive.
But there is another test we can do here, and that is looking at review counts.
Now we need some examples here.
So starting with Amazon, if we search for some of the most competitive markets,
such as a yoga mat --
On the first row of organic results, you see 37,000, 81,000 and 6,000.
The second organic row showing us review counts between 2,000 and 13,000.
And then if we do that exact same thing on Walmart,
you see the first organic row has review count between 17 and 66
and the second row having between 17 and 117 reviews.
So way lower reviews on the Walmart marketplace.
And if we look more at the private label side,
if we type in a well-known one like beard grooming kit, we see on Amazon
the first row between 13,000 and 42,000 reviews, second row between 1,000 and 40,000.
And then searching the exact same on Walmart, the first five products
are between 0 and 1500 reviews and one row down, we have reviews between 1 and 326.
Lastly, let's look at a super niche here and we're going to type
in the example of Whiskey Glass set on Amazon.
The first organic results render if you count between 73 and 2300,
The second row; 225 to 4200.
Repeating that search on Walmart, the first products have between 1 and 48 reviews.
And second row features review counts between 3 and 56.
But if I had to look at that Walmart page there, that looks like a blank canvas
ready for some of the more creative sets
and product variation ideas that we've seen on Amazon.
But there is one plus side for Amazon here.
We look at the most recent data.
We can see that the number of new sellers signing up to sell on Amazon
is steadily decreasing, while the new sellers on Walmart
is increasing very sharply, but which has lower competition?
Walmart.
Walmart is going to get a point here.
Our next question, which has the lowest selling fees?
And here we're going to focus on these
selling platform fees being any monthly seller account subscription fee
you might have to pay as well as any referral fee.
Now, Amazon offers an individual seller account, an ISA and a professional seller account -- PSA.
But for this comparison, we are going to compare the Amazon
professional seller account to Walmart's seller account
as those two provide the equivalent features.
For example, both are going to allow you to create unlimited listings.
They're going to give you access to advertising on those websites,
and they're going to allow you to sell in almost any category,
of course, other than those that need certain approvals.
So with the Amazon professional seller account, you do have to pay
a monthly seller account subscription fee that is $39.99.
And the referral fees here, remember, this is per item sold
usually between 8% and 20%.
And that is 8 to 20% of your sale price
each time you sell that product on the Amazon website.
But focusing on private label products and this referral fee on Amazon is very often 15%.
The lowest fee would be about 8% in categories like camera and photo,
and the highest fee would be 20% for jewelry,
second highest, 17% for clothing and accessories.
And then if we look at the Walmart seller account
now, there is no monthly subscription fee for your seller account here.
And the referral fee is very similarly to Amazon set
between 8% and 20%, but very often 15%.
And again, focusing on private label products, it follows Amazon almost exactly.
The lowest fee would be 8% in categories like camera and photo,
and the highest here would be 20% for jewelry,
followed by the second highest being 15% for apparel and accessories.
And so with the referral fees being almost identical in terms of the raw
cost of your selling account, Walmart emerges victorious here
with lower selling fees, as you don't have to pay
a monthly subscription fee for your seller account.
And they're going to get a point here.
Our next question, which is easiest to send inventory to?
One of the key differences between FBA and WFS
is that Walmart currently requires that your inventory
be shipped to its fulfillment centers from within the US.
For example, you couldn't send your inventory directly to WFS
from your manufacturer in China , but on the other hand,
FBA does allow you to do this and they allow you to import your products
to their fulfillment centers from practically any location.
And so the easiest to send inventory to? Definitely Amazon, they are getting a point here.
Our next question, which has the lowest fulfillment fees?
Of both FBA and WFS calculate fulfillment costs very similarly.
Both use the greater of your product unit weight,
that's like on a scale, or dimensional wage,
which is like a volumetric weight from your product size
and that gives them your products shipping weight.
But I spent a good few hours calculating all of these different sized tiers.
Now, one thing you'll notice is this does look at large standard size.
That's because if your product fits into small standard size dimensions,
then FBA is always cheaper.
In fact, the most expensive WFS category compared
to FBA is when your product is in small standard size
and weighs between 0.76 and 0.99 pounds or between 12 and 16 ounces.
Another difference between these fulfillment programs
is that WFS requires you to add 0.25 pounds
packaging weight to your products weight while FBA does not.
Another notice with both WFS or FBA,
your products weight is going to be rounded up to the nearest whole pound.
Another difference -- FBA adds a fuel and inflation surcharge of 5%
to your fulfillment fees, while WFS does not.
Apparel is generally cheaper to fulfill with FBA and WFS.
And very large and heavy products are generally cheaper to fulfill with WFS than FBA,
although they may not be delivered within that two day shipping window.
But I am going to be dropping links to the fulfillment fees of each
program below this video and for a more complete chart
comparing the fulfillment fees for specific size classes.
Look out for our upcoming blog comparing Amazon FBA
and Walmart Marketplace at jod.com/blog.
But who has lower fulfillment fees overall here?
Walmart does have lower fulfillment fees in more sizes tiers than FBA,
so they're going to win this one with one point.
And that brings us to the next question, which has lower cost advertising?
Now, one of the greatest pressures on profit margins is ad spend.
So how do these platforms compare?
While cost per click -- CPC is the best way of measuring this?
The CPC is what it costs you as the seller every time
a customer clicks on your advertised listing.
And just for a reference, the average CPC of Facebook ads
is currently a $1.35, Google search ads $2.32.
On Amazon, in the US, the average CPC is $0.87,
and on Walmart, surprisingly, the average CPC is $1.
So which has a lower cost of advertising? Well, Amazon, even with more competing offers,
it appears to actually have the cheaper advertising space.
And they're going to get one point here.
So which has the fastest fulfillment?
Well, both officially offer guaranteed two day shipping.
And they have all variations of that
next day, one day, even down to 2 hours, they're a bit nuance.
Overall, they are very, very similar on paper.
So for that reason, they're each going to get one point here.
So to recap, Amazon is the easiest to sign up for.
It also has a lower cost advertising. It's also the easiest to send your inventory to,
and it's the one that customers buy from most.
Whereas Walmart has a lower competition, it also has the lowest fulfillment fees
across more of the sized tiers, and it has the lowest platform selling fees.
And both on paper at least have equally fast fulfillment.
And the verdict.
Amazon is the winner with five points while Walmart has four.
And for beginners, Amazon is a no brainer.
It's still the dominant go-to for online shoppers.
It's way simpler for you to sign up for and to send your inventory to.
And it also currently has a lower ad costs than Walmart.
Personally, I feel like Walmart is sitting on a great opportunity here
to open the doors to more sellers, which is going to introduce
a lot more product variation, which is going to attract more customers.
I would love to hear from you in a comment below this video.
And don't forget, if you do want to take your e-commerce venture to the next level,
check out Amazon FBA Mastery at the link in the pinned comment right below this video.
We would love to have you join our epic community of sellers there.
And in fact, inside the training videos there, we have a specific lesson
that shows you how to expand from Amazon to the Walmart marketplace.
If you do want to learn more, click the link in the pinned comments.
And if this did help you in any way, shape or form, please do click that like button for me.
But I do hope that you're not clear on how you will implement
these different sales channels within your own business.
And I will catch you in one of the next videos.