February 22, 2024

Comparing Walmart WFS and Amazon FBA

How does Walmart fulfillment services compare to the almighty Amazon's. Find out what advantages Walmart fulfillment services have over Amazon fulfillment services.
Comparing Walmart WFS and Amazon FBA
Comparing Walmart WFS and Amazon FBA

Amazon is undoubtedly a force to be reckoned with in the ecommerce space. The website records monthly visits of over 2 billion, making it one of the most frequently visited websites. 

On the other hand, Walmart is best known for its dominant brick-and-mortar stores, having over 10500 stores globally and an online marketplace that has risen to stardom with around 100 million unique visitors every month. 

When it comes to fulfillment services, Amazon FBA stands as the most predominant. On the other hand, to boost marketing operations Walmart introduced Walmart Fulfillment Services (WFS) in February 2020, standing almost toe to toe with Amazon FBA. 

In this article, we will zoom in on these two marketplaces, comparing the pros and cons of selling using Fulfillment by Amazon and Fulfillment by Walmart. 

What is Fulfillment by Amazon (FBA)?

Fulfillment by Amazon, commonly known as FBA, is a comprehensive fulfillment service provided by the ecommerce giant Amazon. With FBA, sellers can store their products in Amazon's fulfillment centers, and when a customer places an order, Amazon takes care of picking, packing, shipping, and customer service. This end-to-end solution allows you to focus on other aspects of your business. 

Here are some key features that make Amazon FBA stand out: 

  • Storage and inventory management: Amazon provides storage space in its fulfillment centers where you can store your products. Your inventory levels are tracked in real time, allowing you to monitor stock levels and prevent stockouts or overstock situations.
  • Pick, pack, and ship: Amazon takes care of the entire order fulfillment process, including picking products from the warehouse shelves, packing them securely, and shipping them to your customers.
  • Shipping and delivery: With FBA, you get access to Amazon's extensive network of distribution centers, enabling fast and reliable shipping to customers.
  • Customer service: With Amazon FBA, you can leave all the customer service to Amazon. Amazon inquiries related to order fulfillment, shipping, and returns. This includes addressing customer issues and providing support, which can contribute to a positive buying experience.
  • Returns processing: Amazon FBA manages the returns process, handling product returns, inspections, and customer refunds. With this hassle-free returns process, you can ensure that your customers are satisfied, building overall customer trust. 

What is Walmart Fulfillment Services (WFS)? 

Walmart Fulfillment Services (WFS) is a comprehensive solution designed to support sellers on the Walmart Marketplace. Similar to FBA, WFS allows sellers to store their inventory in Walmart's fulfillment centers, and Walmart takes care of order processing, packing, and shipping. Walmart also uses its extensive network of physical stores to fulfill online orders, providing, giving it an edge over others.

Here are some key features of the Walmart Fulfillment Services (WFS):

  • Integration with Walmart.com: WFS is well-integrated with Walmart's online marketplace, providing a seamless experience for listing your products on Walmart.com. You get inventory updates, automated order processing, and real-time tracking. 
  • Inventory management: WFS provides tools that can help you manage your inventory efficiently. You can monitor stock levels in real-time, helping to prevent stockouts and managing inventory turnover.
  • Customer service and returns: WFS manages customer service inquiries related to order fulfillment, shipping, and returns. Walmart handles the returns process, including product inspections and customer refunds.
  • An extensive network of physical stores: One unique feature of WFS is the ability to leverage Walmart's vast network of physical stores for order fulfillment. Using stores for shipping can lead to faster delivery times and lower shipping costs, especially when fulfilling orders locally.

Walmart Fulfillment Services (WFS) vs. Amazon FBA: Pros and cons 

wfs vs fba

Now, let's look at the pros and cons of using Walmart Fulfillment Services and Amazon FBA. 

Pros of Walmart Fulfillment Services (WFS)

  • Straightforward pricing structure: If you are selling on Walmart, you will only need to consider two major costs: storage fees and fulfillment fees which are based on the weight of the product. 
  • Good inventory management: While your product remains in a Walmart Fulfillment Center, you can monitor it thanks to the reporting dashboard available on your Seller Center. You can track your inventory levels, track your orders, and monitor shipments. 
  • Excellent customer support: As a Walmart seller, you have access to a range of customer support services by a team of experts. The team manages inquiries, customer complaints, and returns. 

Cons of Walmart Fulfillment Services (WFS) 

  • Limited location: The global reach is not as extensive as Amazon's, as it only ships to locations within the United States. So, if you are looking to target an international audience, you may find FBA's global network more appealing.
  • Smaller customer base: One of the main disadvantages of WFS is that its user base is relatively small compared to other marketplaces. This could limit your potential customer pool, making it harder for you to find customers and to find products that you want to sell

Pros of Fulfillment by Amazon (FBA)

  • Strong reputation: Amazon FBA has built a strong reputation amongst customers, proving to be an effective service. Selling on Amazon FBA means that customers don't have to worry about security and trust. 
  • Amazon Prime Eligibility: Using the FBA service automatically qualifies you for Amazon Prime eligibility. This means you can sell to millions of Prime members who are willing to pay more for faster shipping. With this, you can double up sales and grow revenue with Amazon. 
  • Flexibility and multi-channel support: The platform allows you to fulfill orders within the platform as well as other platforms. As an Amazon FBA seller, you can also access other programs like Amazon Small & Light and Subscribe and Save. 

Cons of Fulfillment by Amazon (FBA)

  • Complex fee structure: Keeping up with the Amazon fees can be a real head-scratcher sometimes. However, the platform offers an FBA calculator because of the complexities involved. 
  • Recurring and fluctuating fees: Amazon sellers have to pay a selling fee of $39.99 every month if they decide to go with the Professional Selling plan. This is in addition to storage fees, fulfillment fees, and other fees. Fulfillment fees also increase every now and then, which may not be favorable for many businesses. 

Walmart Fulfillment Services (WFS) vs. Fulfillment by Amazon (FBA): Similarities 

  1. Effective order fulfillment 

Both WFS and FBA have a large and effective supply chain. Both services are fast and have a logistics network that picks, packages, and ships products to customers efficiently. All you need to do is ship your products to their fulfillment centers and have them handle the entire process of order fulfillment. 

  1. Customer service support 

Both WFS and FBA have customer service support that handles all customer inquiries, complaints, and overall customer service. As a business owner, this can help you save time and energy which you can otherwise channel into other important areas of your business. 

  1. Product listing optimization 

Both WFS and FBA allow sellers to create and optimize their product listings to attract customers and increase sales. Both platforms include keyword research for the optimization of product titles and product descriptions. They also include product images, FAQ sections, and product ratings and reviews. 

WFS takes it a step further by including a Listing Quality Dashboard which provides metrics on product listing performance. 

  1. Analytics tools 

Both WFS and FBA have easy-to-use dashboards and reporting tools that give sellers information on sales, revenue, and inventory. Sellers can track sales, read customer reviews, and view listing performance amongst other functions. 

Walmart Fulfillment Services (WFS) vs. Fulfillment by Amazon (FBA): Differences  

Here are a few categories that make both fulfillment services different

  1. Seller entry 

To become an Amazon FBA seller, all you need to do is sign up. People from all over the world can sell using FBA leading to fierce competition on the platform because of no barrier to entry. 

On the other hand, to become a Walmart seller, you need to register and get approval. Walmart scrutinizes its merchants before allowing them to sell on the platform. This is to ensure good customer satisfaction. 

The strict selection process on Walmart also means there is less competition and sellers can have a greater chance of winning the Buy Box and standing out on the platform. On the other hand, winning the Buy Box on Amazon can be challenging. 

  1. Subscription fees 

On the Amazon platform, sellers have to choose between two subscription plans: the Individual Selling Plan and the Professional Selling Plan

If you decide to subscribe to the Individual Selling Plan, you will be charged a fee of $0.99 for every sale. However, the Individual Selling Plan comes with limited features. Sellers on this plan cannot compete for the Buy Box which is crucial to succeeding on the platform. They also do not have access to some tools and cannot run PPC Ads. 

If you decide to subscribe to the Professional Selling Plan, you can have access to various tools and can compete to win the Buy Box. However, this comes at a recurring monthly fee of $39.99. 

While this is a good deal considering its benefits, sellers do not have to pay any monthly subscription fees for Walmart Fulfillment Services. 

  1. Selling fees structure 

With Walmart Fulfillment Services, you only have to worry about two major fees: a fixed monthly storage fee and fulfillment fees based only on the weight of shipping the product. In other words, Walmart has a simple two-part fee structure that is cost-effective for sellers. WFS also has no long-storage fees. 

On the other hand, the FBA program requires that sellers pay storage and fulfillment fees which have different structures based on the weight and product dimensions. You will also have to pay other fees including long-term storage fees. These fees can be quite complex and expensive for most sellers to keep up with. 

  1. Seller requirements 

Both Walmart and Amazon have requirements for joining their platform. Here are the seller requirements for selling on Walmart vs. Amazon:

Walmart Fulfillment Services seller requirements 

  • US Business Tax ID (They do not accept SSN)
  • W9 or W8 & EIN Verification Letter from the Department of Treasury: This is to verify your US business address or location of physical operations
  • Address of physical operations
  • US Business address
  • Planned integration method (bulk upload, API, solution provider)
  • Primary product categories, sizes, and other related information 

Amazon FBA seller requirements 

  • Bank account number and routing number
  • Phone number
  • Chargeable credit card
  • Government-issued national ID
  • Tax information (you can use your SSN)

To sell on Amazon FBA, you don't need to be resident in the United States. However, you need to be selling in one of their selected countries. 

  1. Reputation and customer base 

Amazon is a leading online marketplace with over 300 million active users. The platform has a wider customer base than Walmart and a strong reputation among consumers. The website gets over 2 billion visitors in a month which crushes that of Walmart.

However, Walmart continues to expand, gaining ground amongst US consumers. They claim to receive around 100 million unique visitors in a month. 

Walmart Fulfillment Services vs. Amazon FBA: So which is best for your business? 

wfs vs fba differences

Now we've covered both Walmart Fulfillment Services and Amazon FBA looking at the pros and cons as well as their differences. The question you may be asking is which of these services is right for your business? Choosing the best fulfillment services depends on your unique business needs. Here are a few factors to keep in mind when choosing between WFS and FBA. 

First, you need to evaluate your target audience and market reach. If global expansion is a priority for you, FBA's extensive network might be more suitable. For a focus on the U.S. market, WFS might be a cost-effective and efficient choice.

Secondly, evaluate your product margins and fees. Calculating the impact of fulfillment fees on product margins is crucial. If you have lower-margin products you might find it challenging to absorb FBA's fees, while WFS's competitive pricing could be more appealing.

Another thing you want to consider is brand control. Consider the level of control you want to have over your branding and packaging. If you have a strong emphasis on brand consistency, you may want to lean towards WFS, but if you prioritize Prime-like benefits over brand control, you might choose FBA.

Lastly, you want to consider the shipping speed offered by each service and how it aligns with customer expectations. Amazon's Prime benefits can be a major draw for customers who prioritize fast shipping.

Both platforms come with their pros and cons. The good news is you don't have to choose between selling on Amazon FBA or Walmart. You can sell on both platforms. To boost efficiency and increase sales and profits as an ecommerce seller, you can choose to adopt a multi-channel strategy. This allows you to reach a vast range of potential customers.

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