Choosing the correct online marketplace to sell your products could mean the difference between a thriving e-commerce business and one that struggles to break even.
For over 20 years, Amazon has been the first choice for most online retailers, thanks to its Fulfillment by Amazon (FBA) program. FBA allows sellers to outsource order fulfillment—picking, packing, and shipping—to Amazon, eliminating the need for third-party logistics, which offers limited reach and shipping capacities.
Throughout those years, FBA had been the only efficient fulfillment solution out there until Walmart Fulfillment Services (WFS) came along in 2020. WFS is Walmart's version of FBA. It operates the same way as FBA, providing a one-stop fulfillment solution for e-commerce businesses through Walmart's network of stores and warehouses.
The question is, now that there's another option available, should you switch?
Not so fast. Big decisions like this require some thought. How about we examine WFS first to see if it's truly user-friendly and cost-efficient, as advertised? Let's also compare its features with what you're already familiar with using FBA.
Here is a detailed comparison between FBA and WFS:
Network Size and Customer Base
Amazon Prime has more than 200 million active users globally, with over 83% residing in the US. To serve its massive customer base, Amazon continues to build fulfillment centers in countries along trade routes. Right now, it operates 185 fulfillment centers, with 110 of them located in the US.
In contrast, Walmart operates just 31 fulfillment centers, all in the US. However, this is already a significant feat given that WFS has only been established for a little over three years. Also, despite being a newcomer in centralized fulfillment solutions, Walmart has an online marketplace almost as old and big as Amazon's, serving 37 million customers daily.
In terms of integration with other e-commerce platforms, Amazon has the upper hand, as it allows customers to use FBA for purchases outside Amazon, such as eBay, Etsy, and Shopify. Unlike FBA, WFS only integrates with Walmart Marketplace, which only serves Walmart-registered merchants and suppliers.
Target Market and Geographical Reach
WFS can't be used for international shipments because Walmart doesn't have fulfillment centers outside the US. It only serves US-based sellers and customers. However, Walmart already has over 5200 stores and clubs overseas, so it's highly likely to scale its fulfillment services down the road.
Amazon has 75 fulfillment centers outside the US, letting international sellers use FBA to import and export to the US and other Amazon-supported countries. This accessibility has enabled Amazon to offer various products across various categories, unlike Walmart, which is limited by its in-store product regulations.
Plans and Fees
Both FBA and WFS are free to use. You only have to cover the fulfillment costs. FBA's fee starts at $3.22, while WFS's starts at $3.45.
Another advantage of FBA over WFS is its ability to upgrade. By subscribing to a professional plan, you gain access to additional features such as bulk inventory management, dynamic pricing, and multi-user account settings.
Other fees may apply on both platforms. For instance, Amazon and Walmart may charge extra for fulfillment services during the holiday season. The fees also vary depending on the weight and dimension of the product and your preferred storage option.
Opportunities for Sellers
Using FBA or WFS speeds up shipping and offers features that streamline operations. For instance, both services handle returns and customer support for you. Amazon and Walmart's fulfillment solutions also include express delivery. However, fast shipping is exclusive to Prime members on Amazon, whereas Walmart offers two-day shipping to everyone.
Unlike Walmart, Amazon offers shipping labels. Additionally, only established sellers on Walmart Marketplace can utilize Walmart WFS, while new sellers must complete a form. In contrast, FBA is accessible to all sellers on the platform regardless of their tenure or sales history.
So which is better?
To determine which platform can help you grow your e-commerce business faster, ask yourself the following questions:
- What products are you selling? Are they accepted on Walmart Marketplace?
- Are you planning to sell outside the US?
- How fast do you want your products to be shipped?
- Are you a Walmart Marketplace seller? If not, are you planning to be one?
- Do you need help with product labeling?
- Do you import your products?
- Are you flipping products from other online marketplaces?
- Do you want to be able to integrate with other e-commerce channels?
If you're already selling on Walmart Marketplace, only target US customers, and okay with forking out a few cents on each shipment, WFS is a solid choice. However, if you aim to expand internationally and offer unique products, FBA is the way to go. You may also consider using both fulfillment solutions based on your business's capacity, but managing multiple platforms might demand more resources.
Set up an e-commerce business today!
Kick-starting your e-commerce business takes courage and knowledge of the different online marketplaces. With expert guidance, you can set up an account, list your first product, and fulfill your first order successfully. The key is to take the first step.