With Walmart's decision to open up its marketplace to non-domestic US sellers, a new world of opportunity has opened up for people who would have previously spent all their time and effort on Amazon. These sellers - perhaps, like yourself - had established winning strategies on Amazon, allowing them also to consider selling on Walmart for different reasons.
Maybe the desire is for diversification - to get their products in front of more people, on a different platform, with a different level of competition. Perhaps the reason is pure experimentation. Successful Amazon sellers want to see if they can replicate their success on Walmart's platform.
Whatever the reason, it's not a copy-and-paste endeavor from a strategic perspective. Strategies and best practices that work on Amazon won't necessarily be equally successful on Walmart. There are just enough nuances that you need to consider to ensure you have complementary but unique strategies that focus on what makes the two marketplaces different.
To understand why strategies need to be a little different when selling on both platforms simultaneously, it's important to understand the inherent differences between selling on Amazon and selling on Walmart.
1. The Key Differences in Selling On Walmart vs. Amazon
To best understand the differences between selling on Walmart versus selling on Amazon, it's important to consider these categories:
1. Selling fees
2. Onboarding and listing
3. Pricing and buy box competition
4. Shipping and fulfillment
5. Performance standards, and
6. Branding and advertising opportunities
Let's take a look at each of these in some detail.
- Selling Fees
As we've mentioned before, Amazon loves fees. A good chunk of the revenue they make as a company comes from these fees, so it stands to reason they're going to install them wherever and whenever they have the opportunity to do so. Amazon's Professional seller accounts cost $39.99 per month, and the referral fees for each sale range from 8-15%, depending on the category. There is a minimum fee installed by Amazon, though, so you'll never pay less than 8% regardless of category.
Three in four of you are likely using FBA also, so you're familiar with their fulfillment fees that vary by the weight of the products Amazon is handling on your behalf. And, of course, the storage fees. If Amazon has to hold your inventory for an extended period in any of their warehouses, you'll pay for it.
Walmart's fee structure is a little different. There's no setup or monthly seller fees to sell your products on the platform, but they also use referral fees that mirror what Amazon charges for each sale. Walmart does have a fulfillment service now, called Walmart Fulfillment Service (WFS). If you decide to use WFS for your products, you'll pay some monthly storage fees and the occasional fulfillment fees. However, becoming a part of WFS isn't as easy as it is to use FBA, so this isn't a concern for most sellers.
And, oh yeah, UPCs. You'll need to have a UPC for every product you list on the Walmart platform for sale. As you can imagine, the cost associated with acquiring and maintaining those UPCs can add up quickly.
- Onboarding and Product Listings
Compared to Walmart's complicated onboarding process, getting started on Amazon is a relative breeze. Once you've set up your seller account on Amazon's Seller Central, it's easy to get going. All you have to do is list a product for sale, and you're in business. Your product(s) will have a standard identification number (usually a UPC, EAN, or ISBN), but those aren't hard to obtain.
As we're sure you know by now, one of the biggest annoyances with listing and onboarding products onto Amazon is their penchant for changing listing criteria at the drop of a hat, requiring you to do some arcane task to align everything. Those are rare enough, though, that they aren't that much of an annoyance.
It's well-known that Walmart doesn't allow that many people to sell on their platform. The biggest difference between the two platforms lies here. Amazon will let anyone with a pulse sell on Amazon, while Walmart wants to see that you've had some previous success selling elsewhere, first, to hedge their bets and give you an opportunity. To sell on Walmart, you have to complete an application and undergo their infamous "trust and safety review." This review typically takes a few weeks. If you are accepted, there's an onboarding process that is very manual compared to the automatic onboarding that happens on your behalf when you sign up for Amazon's Seller Central.
- Pricing and Buy Box Competition
Amazon is designed for sellers to have success. But a side effect of this is a massive amount of competition on the platform. While all of the sellers on Amazon aren't professional sellers, a good number are and know what they're doing in short and long-term strategies to help them land in the Buy Box more often.
Prices fluctuate all over the place due to this level of competition, so it's essential if you're serious about selling on Amazon that you react quickly. And work with an automatic repricing tool that helps you keep your price points competitive whenever tweaks need to be made.
If you sell via FBA or Seller-Fulfilled Prime (SFP), your chances of landing in the Buy Box are naturally higher because of the speed and dependability of your fulfillment, which factors directly into the Amazon algorithm. If your sales velocity is consistently high as well, you should be landing there quite often.
Prices on Walmart are generally less expensive than on Amazon. Because of this, it's vital to list competitive prices for your products on the platform at the risk of getting delisted if you aren't competitive. Walmart is serious about prices being reasonable, and they don't stand for anyone trying to take advantage of ill-informed visitors to the marketplace. Walmart is much less saturated, in general, from a competitive standpoint. So if you're willing to play by their rules as a seller, there's a big opportunity to dig in and grab some quick success for your products.
- Shipping and Fulfillment
When it comes to Amazon’s shipping and fulfillment practices, Prime is the game-changer. When Amazon introduced Prime, it changed the way people thought about shipping and their buying habits online. The ability to receive a package within a day or two via Prime is a massive competitive advantage for Amazon as a business and those who sell on the platform.
Almost 75% of Amazon sellers use FBA solely to gain access to the Prime badge and have the ability to sell products within Prime. These sellers also use some type of combination approach for the fulfillment of orders. They likely partner with a 3PL, a third-party logistics company, to handle some of their inventory and shipping orders to customers.
In simplest terms, Amazon’s shipping and fulfillment infrastructure - both in terms of technology and physical shipping power - is staggering and one of its massive differentiators.
Walmart has recently launched Walmart + to lessen this differentiation. The benefits here are similar to Prime and allow Walmart sellers to offer fast delivery times on certain product categories. Walmart’s Two Day program helps sellers who want to spend more effort on the platform the ability to access two-day shipping tags. These shipping tags help elevate your product in organic search rankings and therefore have a better shot at landing in Buy Boxes more often.
Once you’ve been a seller for 90 days and met Walmart’s performance standards, you can qualify for Two Day. You can also fill out an interest form to access Walmart Fulfillment Services and hope to get in.
In general, Walmart is slowly rolling out offerings that closely mirror what Amazon offers in a race to catch up and prop the platform as a reasonable alternative.
- Performance Standards
If you fulfill through FBA, Amazon’s performance standards aren’t a concern. Part of what you lean on them for within FBA is to handle performance using their logistical and customer service capabilities, so it’s something you can take off of your hands.
If you sell through FBM, there are a few metrics you’ll need to keep a close watch on:
- Order Defect Rate (ODR) - Ensure this stays under 1% over a rolling 60 day period. ODR includes negative feedback from your buyers, claims, and any credit card chargebacks from purchases.
- Cancellation Rate - Needs to stay under 2.5% over a rolling seven day period.
- Late Shipment Rate - Needs to be below 4% both for 10 and 30 day periods.
I’m sure you can see why going with FBA is a no-brainer, so you don’t have to mess with all the tracking that goes along with staying where you need to against these metrics.
There’s also danger if you’re an FBM who violates these metrics of getting a warning or suspension notice from Amazon. These suspensions are notoriously hard to overturn and have derailed many successful businesses just as they were building momentum.
Walmart tracks similar core metrics to Amazon that measure performance standards. They expect you as a seller to keep an ODR of less than 2% over 90 days to stay in good graces. If your ODR continues to violate that metric, you’ll get a warning, but Walmart’s much more likely to work with you to improve, given their desire to compete with Amazon at scale.
- Branding and Advertising Opportunities
In general, people who buy on Amazon couldn’t care less about your brand. The vast majority of Amazon searches are product-specific, not brand-specific. Potential customers are looking for a specific item and don’t care about the brand selling it as long as reviews are decent and the product’s description meets their needs.
If you want your brand to stand out, you’re going to have to pay to play. About the only way to grab the featured spots on detail or product pages is to pay to get in the mix. The days of doing so organically are long gone, as paid placements dominate most of the first listings for any given product.
Building and promoting your brand on Amazon is as much about protecting your intellectual property (IP) as it is gaming positioning to have a chance at more sales. Through Amazon’s brand registry, you can access various tools to help with protection against copyright infringements or knock-off versions of your products that hit the market as soon as you start to be successful.
On the flip side, Walmart was a traditional brick-and-mortar brand first. Because of this, Walmart’s customers are more likely to be brand loyal and search for products by brand. A very small percentage of Walmart sellers currently advertise because of this. There’s less saturation, in general, and the ability to rank organically is still there. Plus, Walmart’s advertising works on an auction model, where the big players can outspend you for position pretty much every time unless you’re willing to go dollar for dollar.
Now that you know the key differences between selling on the platforms, it’s worth examining some of the common mistakes made by sellers on both platforms.
2. Common Mistakes Amazon and Walmart Sellers Make
We could write on this topic for an extended time, but to keep it simple, let’s look at three common mistakes Amazon sellers make and three mistakes Walmart sellers make.
Mistakes Amazon Sellers Make
- Don’t spend enough time on their product listings
- Jump into niches that are too competitive, and
- Underestimate the importance of customer service
If you’ve been selling on Amazon for a while, you know how important it is to make sure product listings are crystal clear and backed by Amazon Keyword Research that will help you be in the search rankings mix. Picture quality also matters so much. Spending money on professional-quality photographs can make all the difference in your listings. It may be a hit to your pocketbook, but it’s money you’ll reclaim quickly because your listings will look professional and stand out from the rest of the pack.
There’s a huge misconception that the way to succeed on Amazon is to start selling products that are already selling well. False. When you do this, you enter into competition with sellers with thousands of reviews and carefully curated product listings. In short, you have very little chance to succeed. Instead, seek out products that are starting to show a good sales velocity but are still under the radar. As the saying goes, “it’s always best to hop on a rocket ship right before it takes off.”
Simply put, you must respond to negative reviews. It’s difficult because each negative review can feel like a personal attack. It isn’t.
People have bad experiences with products for all types of reasons. It’s rarely about you. Take the time to respond to these reviews professionally. It pays off. Who knows? You might even have the occasional buyer change their review and give you a lift.
The common mistakes Walmart sellers make are a little different.
Mistakes Walmart Sellers Make
- Break one of Walmart’s extensive performance standard rules
- Violate Walmart’s Price Parity or Price Leadership rules, and
- Forget to lean in on SEO in their product listings
As we’ve outlined, Walmart’s extensive performance standards and rules are difficult to keep track of, but part of the process of selling on the platform is doing so. Before you ever list your first product, you need to get intimately familiar with the Prohibited Products Policy and Seller Performance Standards.
These documents outline what you can and cannot sell on the platform and how Walmart expects you to behave on the platform to stay above board.
Walmart’s Price Parity rule doesn’t allow you to sell similar products at a lower price on other platforms. If you’re going to sell on Walmart, the products you list have to be cost-competitive. The Price Leadership rule takes this to another level. It ensures you aren’t selling a similar product at a bargain-basement price somewhere else. Be very careful about how you establish pricing when you first get set up on Walmart.
Because so few sellers take advantage of Walmart’s advertising options, organic positioning is much more important than Amazon. Make sure to invest the time to understand SEO best practices and set up your product listings in a way that takes advantage. If you don’t spend the time here, it can come at your expense. It can be a slog, but it’s worth it if you’re going to be competitive.
3. Why Successful Amazon Sellers Should Consider Selling on Walmart?
If you’ve been successful selling on Amazon - and if you’re reading this article, chances are you have been - it’s relatively easy to apply the best practices that made you successful on Amazon to your early time on Walmart.
You’ll be installing these best practices in a much less competitive landscape. One that’s young by comparison, and that’s a good thing. There’s generally less competition for featured listings and the Buy Box, which allows you to gain traction much faster than you could when diving in on Amazon.
It takes time to make sure you’re carefully navigating the minefields that Walmart can put in your path, and it’s a relatively steep barrier to entry by comparison. But, once you’re set up and rolling, it’s a greenfield of opportunity.
Beyond this, with the launch of Walmart +, there’s a big opportunity for seasoned sellers to match the success they’ve seen as an FBA leveraging Amazon Prime.
Selling on Amazon and selling on Walmart are two very different processes that require nuanced and particular strategies, but it’s not yet time to give up one at the expense of the other.
Dip your toes into both pools and tweak your strategies based on what makes the platforms unique to see the best possible success.
To take things to the next level, check out the wide variety of Resources, Tools, and Products we offer at DataHawk to help ambitious sellers make the most of their online selling experience!
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