Marketplaces have undoubtedly changed the global market. Due to the pandemic and other factors, the way we shop and choose has changed. Of course, today even our grandparents buy online and that is why 40% of purchases in the world are made through digital commerce. Of course, Amazon and Walmart are considered the retail giants and the favorite marketplaces for consumers. Evidence of this is that in the first quarter of 2022, Amazon represented 3.4% of consumer spending and Walmart 2.8%. For this reason, when launching or selling a product, it is essential to consider these 2 marketplaces to do so.
Why sell your product on Amazon or Walmart in the United States?
In the United States, Amazon and Walmart generate more sales than any other digital store. In this country, Amazon receives 2 billion visits each month and Walmart slightly less than 400 million. So it is evident that Amazon considerably outperforms Walmart in terms of traffic and revenue. However, if your goal is to sell to the North American market, considering that more than 50% of Americans start their product search online, you shouldn’t rule out either one. The above, because both have their advantages and disadvantages that depending on your product and your brand, one will suit you more than the other.
Let's meet these two giants
Amazon at its inception, in 1994, began selling only books. Currently, you can sell any type of product on Amazon and it is considered the largest marketplace in the world with more than 126 million subscribers. On the other hand, Walmart also sells all kinds of items and was founded in 1960. However, selling your products through a digital channel at Walmart was not possible until 2009. Despite this, since 2021, its sales are growing 5 times faster than Amazon’s. Today it has more than 32 million subscribed users
Without a doubt, the costs that each of these implies is a very important point when deciding which one to sell. Here we leave you the rates that each of these marketplaces handle, so you can see which of the two falls within your budget.
Does not have
$5 or 20% of the product
Does not have
6% – 45%
6% – 20%
Fulfillment Service costs
They vary according to the weight and size of the product
Monthly storage fees
83 cents per cubic foot, in the fourth quarter it increases to $2.40
75 cents per cubic foot. If in the fourth quarter, the products are stored for more than 30 days, charge an additional $1.50
Long-term storage fee
Additional $6.90 per cubic foot.
Additional $7.50 per cubic foot.
Advertising on Amazon and Walmart
As you can see below, selling on Amazon implies a higher investment than Walmart. However, the conversion rate is also higher. Therefore, deciding whether to sell at Walmart or Amazon is a decision that must be carefully detailed.
Conversion rate average
First of all, we must highlight that while Amazon’s cost per click increased from 2021 to 2022, Walmart’s decreased. Amazon started 2021 with a CPC of $0.60 and 2022 with one of $0.85, on the other hand Walmart went from $0.50 to $0.40.
On the other hand, Walmart’s ACoS, the ratio of ad spend to ad revenue, has dropped considerably in the past year as it used to be double Amazon’s and is now less than Mr. Bezos’s marketplace. This growth is due to the effort that Walmart is implementing to optimize its advertising and make it more consumer friendly. Another point that we must address is the average cost per order, where Amazon in the last year has maintained an average of $38 per order, but Walmart began 2021 with an average ticket of $15 dollars and by April 2022, it surpassed Amazon with an average ticket of $39 per order.
Advantages and disadvantages of selling on Amazon and Walmart
These are some advantages and disadvantages of these marketplaces that will help you decide which of the two is the most convenient for your brand and product.
At Década Studio, we help you expand your business to new markets.
If you would like to start selling on Amazon or Walmart and you still have doubts about which marketplace is the ideal one for your product, at Década Studio we have a team of expert marketplace professionals who will advise you and help you identify which is the best option for your business.
In addition, we will help you plan the most appropriate sales and promotion strategy to position your products on the marketplace website of your choice.