March 22, 2022

Walmart Fulfillment Services vs. Fulfillment by Amazon 

How does Walmart fulfillment services compare to the almighty Amazon's. Find out what advantages Walmart fulfillment services have over Amazon fulfillment services.
Walmart Fulfillment Services vs. Fulfillment by Amazon 
Walmart Fulfillment Services vs. Fulfillment by Amazon 

Amazon is undoubtedly a force to be reckoned with in the ecommerce space. The website records monthly visits of approximately 2.45 billion every month, making it one of the most frequently visited websites.

 

Walmart is best known for its dominant brick and mortar stores, having around 10500 stores in 24 countries. However, the Walmart online marketplace is steadily growing, claiming to record around 100 million unique visitors every month. 

When it comes to fulfillment services, Amazon FBA stands as the most predominant. However, Walmart has equally improved its marketing operations introducing Walmart Fulfillment Services (WFS) in February 2020, as an alternative to 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. 

Pros and Cons of Walmart Fulfillment Services(WFS) and Amazon 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 them thanks to the reporting dashboard available on your Seller Center. You can track your inventory levels, track your orders, and monitor shipment. 
  • Excellent customer support: The Walmart seller has access to customer support services by a team of experts. The team manages inquiries, customer complaints, and returns. 

Cons of Walmart Fulfillment Services (WFS) 

  • Strict rules: To use the Walmart Fulfillment Services, you need to become a Walmart seller. The platform does not allow you to sell products on Walmart while using other fulfillment services. 
  • Limited location: The Walmart Fulfillment Service only supports shipping products within the United States and military addresses. 

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 sellers 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. 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 

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. 

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. 

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. 

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, 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

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. However, this comes with fierce competition on the platform because of no barrier to entry. 

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. On the other hand, winning the Buy Box on Amazon can be challenging. 

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. 

Selling fees structure 

With Walmart Fulfillment Services, sellers 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 order words, Walmart has a simple two-part fee structure that is cost-effective for sellers. 

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. Sellers 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. 

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 

  • Phone number
  • Bank account number and routing 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. 

Reputation and customer base 

Amazon is a leading online marketplace. In fact, around 73% of consumers in the United States shop on Amazon. The platform has a wider customer base than Walmart and a strong reputation among consumers. The website gets over 200 million visitors in a month which is almost double 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: Which is best for your business? 

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? Let's summarize our findings.

Amazon is a leading online marketplace with a strong customer base. It also favors newbies because of its low barrier to entry. However, the platform has fierce competition, making it difficult for sellers to stand out. 

On the other hand, Walmart requires that aspiring e-commerce sellers apply to sell on the platform. The platform also favors experienced sellers. However, Walmart doesn't have a reputation as strong as Amazon's. 

Because of the barrier to entry on Walmart, there is lesser competition and higher chances of winning the Buy Box. 

Walmart fees are straightforward and relatively more cost-effective than Amazon fees. Amazon charges recurring monthly fees while Walmart charges no monthly fees at all. 

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

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