Walmart may be the world’s biggest retailer by revenue, but when it comes to eCommerce, the retail giant is no match for Amazon. Just like Amazon, Walmart WFS has its own online shopping site. It also has a marketplace where third-party sellers can list their items for sale. However, when it comes to pure selling power, AMZ still dominates the eCommerce space. With a 40% market share in the U.S eCommerce market, AMZ is not to be underestimated. Walmart is actually trailing far behind in second place at 7%. (Source: Statista)
Walmart Fulfillment Services (WFS) was launched last year its version of Fulfillment by Amazon. This is an unprecedented step that Walmart took in order to battle for supremacy in the U.S.’s online retail market. Although Walmart is still doing larger numbers, generating $173.08 billion more than AMZ last year, it is not resting on its oars. The retail giant is battling it out with its rival and churning out its own eCommerce initiatives.
Sellers and businesses looking to diversify their sales channel may wonder which of these marketplaces and fulfillment services benefits them more. And if you are a third-party seller who is searching for the best platform for your products, this can be a game-changer. Knowing which platform could possibly be more profitable before jumping in might save you a lot of money. It could also allow you to plan your strategies and decisions ahead of time.
In this article, we’ll highlight the differences between Amazon FBA and Walmart WFS, and their respective pros and cons. We’ll try to find out which among the two can bring in more profits to third-party sellers like you. And more importantly, we’ll also offer a software solution that can help you find the best products to sell online.
Ready to jump in? First, an overview of both services.
What is Amazon FBA?
Launched in 2006, is a service offered by AMZto its third-party sellers. Most of the time, third-party sellers fulfill customers’ orders on their own. They are the ones who pick, pack, secure, and ship the orders to their customers. Whether you are selling on Amazon, Ebay, Etsy, or Shopify, this is usually how things are done. It is also known as self-fulfillment, or more popularly known as FBM (fulfillment by Amazon).
With FBA, third-party sellers have to option to send their inventory to AMZ Fulfillment Centers for storage. When a customer places an order, Amazon picks, packs, and ships the product to the customer. They will also provide customer support and process all the returns and refunds on behalf of third-party sellers. Below are some of the advantages of using the FBA model:
Free up more time
One of the best things that FBA can offer to third-party sellers like you is freeing up your time. Instead of focusing on shipping, packing, and delivery, you don’t have to worry about these things anymore. With more time on your hands, you can now divert your attention to marketing and promoting your products. This could ultimately lead to more sales.
Less Shipping Costs
If you are shipping as an individual, the lack of a bulk shipping agreement with your courier can make it more expensive for you. In the long run, being able to utilize Amazon’s relationships and agreements with big couriers can make shipping costs smaller.
No Need To Worry About Customer Service
Have you ever had to deal with unruly, impatient, and rowdy customers? It can be a seller’s nightmare if you have to deal with this stuff on a daily basis. Not only does it drain your energy, but it can also make you grumpy as a result. Well, with FBA, you don’t have to deal with this anymore. AMZ will handle all the returns, refunds, and other customer concerns. Now you can focus on growing your business instead of dealing with grumpy buyers.
Easier Shopping Holidays
Dealing with shopping holidays like Christmas, Halloween, Black Friday, and Thanksgiving can be a massive pain for sellers. Yes, you are making more sales during this season, but the trade-off is huge too. If you sold a thousand products, it means you also have to ship out a thousand products. And if you are just a small store, it would be impossible to do it fast and efficiently. With FBA, you don’t have to worry about selling too many items. Since AMZ and its experienced team will handle and fulfill your orders, you can now sit back and relax. All you have to do is make sure that your inventory is filled to ensure all orders will be serviced.
Of course, using FBA has some disadvantages too. First of all, this service isn’t free. You have to pay for every little thing such as using bubble wraps on your orders, which can add up to a lot. Furthermore, you need to be sure that you are following all the pre-delivery packing requirements of Amazon. If your products do not follow their standards, they will not accept them when you send them to their warehouses.
What is Walmart WFS?
Launched in 2020, WFS (Walmart Fulfillment Services) is a service offered by Walmart to Marketplace sellers. Sellers send their inventory to a designated fulfillment center for storage. When a customer buys an item on Walmart.com, it handles picking, packing, and shipping on behalf of the seller. After the sale, Walmart also handles customer service and returns. In a way, Walmart WFS can be called the direct competitor of FBA.
They both sound similar, right? However, there are key differences between FBA and WFS, which we’ll look at below.
Amazon FBA vs Walmart WFS: Key Differences
It’s open to new sellers. All you need to do is sign up for an Amazon seller account and set up FBA. To use WFS, however, you have to already be a Walmart Marketplace Seller. If you are a new seller, you have to fill a form
FBA handles fulfillment for orders placed on AMZ and other sales channels through its Multi-Channel Fulfillment program. it only handles fulfillment for orders placed on Walmart.com.
It has 110 fulfillment centers in the US, and a total of 175 fulfillment centers worldwide. Walmart has 20 Market Fulfillment Centers in the U.S. However, Walmart has 4740 retail stores in the U.S that could serve as designated fulfillment centers.
Using it makes your products eligible for Prime Free Shipping. This means your items carry the Prime logo, which increases your Buy Box visibility and improves your search rankings. AMZ offers free Same-Day, One-Day, or Two-Day Free Shipping to Prime users, depending on their regions.
Using WFS, on the other hand, makes your products eligible for the Two-Day tag Walmart, which improves your Buy Box visibility and search rankings. Walmart offers Free Two-Day Shipping on all orders with a total price of $35 and above. This applies to all customers in the U.S and does not require a membership subscription.
Under FBA, buyers can return items by mail, or to any Whole Foods or Kohl’s store. Under WFS, buyers can return items by mail, or to any Walmart retail store.
Amazon uses a commingled inventory system for FBA products, although FBA sellers can opt out of this system. This means that you send your inventory to an Fulfilment Center without labeling your products and stores your inventory with other identical products having the same UPC codes. So, when a customer places an order for your item, Amazon will pick, pack, and ship any similar item with the same barcode, not necessarily an item from the inventory you sent.
Walmart does not use this system for WFS products. Walmart stores each Marketplace seller’s goods separately at the warehouse.
Under Amazon fulfillment, third-party sellers can ship their inventory to an Fulfillment Center from overseas, so long as the products are packaged and labeled correctly according to their requirements. Under Walmart WFS, Marketplace sellers can only ship their inventory to a Walmart Fulfillment Center from within the U.S.
Product Dimension & Weight Restrictions
Under FBA, AMZ has multiple size tiers for its products but does not appear to set a maximum limit for product size. They accept “special oversize” products that weigh over 150 lbs and measure 108 inches on the longest side.
Walmart, on the other hand, only accepts items with a maximum weight of 30 lbs, and a maximum dimension of 25″ x 20″ x 14″.
It has a general Seller Support team that assists all third-party sellers, both FBM and FBA, with their inquiries and issues. Walmart, on the other hand, has a special Support Team dedicated to only WFS sellers.
Amazon FBA vs. Walmart WFS: Who Wins?
Based on the differences above, it’s obvious both fulfillment services have their pros and cons. Let’s compare the advantages each service has over the other.
Advantages of FBA over Walmart WFS
- Open to both new and established sellers. This means even newbie sellers can avail of the service and start making sales.
- Better track record in eCommerce fulfillment and has garnered unrivaled customer trust. With its trusted network, FBA has a more exprienced platform that customers trust.
- Wider customer base and enjoys heavier traffic so you are guaranteed more visibility and brand awareness.
- Prime is the most loyal segment of AMZ’s customer base, having over 200 million subscribers worldwide. FBA makes your products eligible for Prime Free Shipping, leading to even more visibility.
- AMZ fulfills orders from other sales channels, helping you scale your business.
- Also, AMZ does not place maximum restrictions on the size and weight of the products it can accept. You can also take advantage of several cost-effective FBA programs such as FBA Small and Light.
Advantages of WFS over Amazon FBA
- Walmart has thousands of retail stores in the U.S, and there’s likely to be one near every customer. This makes it easier for customers to return items.
- Free Two-Day Shipping is open to every buyer, as long as they purchase items worth $35 or more. You get to offer free shipping to a wide customer base.
- It does not commingle your inventory, reducing the risk of delivering counterfeit or damaged products to your buyers.
- Due to the application process of enrolling in WFS, Walmart has fewer sellers than FBA. This reduces competition and gives you a better opportunity to differentiate yourself.
Amazon FBA vs. Walmart WFS: Final Thoughts
FBA and WFS are both fulfillment services offered by two retail giants. We’ve highlighted the differences between them to guide you on which is better. FBA seems to have more benefits than WFS. However, you should also consider your business type and needs when making your decision.
If you opt for FBA, or you are already a seller, our all-in-one Amazon seller software, Zonbase, is all you need to thrive on the Marketplace. You can find winning products, target the best keywords, spy on your competitors, optimize your listings, and more.
No matter what service you choose between FBA and Walmart WFS, one thing remains true. You still have to find a winning product to sell in your store. And when it comes to selling online, jumping in without an idea about what product to sell can be devastating. Over the years, AMZ has claimed the lifeline and capital of so many third-party sellers. Because of the lack of pre-planning, sellers who chose the wrong products quickly burned through their initial investment.
With Zonbase, you will have a much better chance of succeeding in FBA. Zonbase is voted as the number one most accurate and bang-for-the-back Amazon seller software today. With its 20+ tools and services to help you with tasks such as keyword optimization, product research, and many others, it’s easier to find the winning product by using Zonbase. Whether you plan to use FBA or Walmart WFS, finding the winning product is still a priority. And Zonbase can help you in this regard.
Interested to see what Zonbase can do for your business? Sign up for a free trial.