From Amazon Business to Walmart – Explaining Why Walmart Can't Apply Amazon's Sales Strategy
As Walmart begins opening up to non-U.S. businesses, a new opportunity opens up for sellers who previously spent all their time and energy on Amazon. These sellers, who already have a successful strategy in their Amazon business , make them want to replicate the success of their Walmart sales. But actually, selling on Walmart isn't that simple. A sales strategy that works on Amazon isn't necessarily as successful as it does on Walmart. For example, winning the Amazon Buy Box is significantly different than winning the Walmart Buy Box . There are enough differences that need to be considered to ensure that there are complementary but unique strategies that make Walmart a successful business as well.
To understand why selling strategies on both platforms need to be different, it's important to understand the following differences between selling on Amazon and selling on Walmart:
1. Sales expenses
There are many types of selling fees on Amazon, and a large portion of their revenue as a company comes from these fees. Amazon's Professional Seller account costs $ 39.99 per month, with commission rates ranging from 8% to 15% per sale, depending on the category. However, Amazon sets a minimum fee, so you'll never pay less than 8% regardless of category. Three-quarters of sellers use FBA , so there are also fulfillment fees, which vary by product weight. Also, if you store your inventory in an Amazon warehouse, you will also be charged storage fees.
Walmart's fee structure is a little different. There is no monthly fee to sell your products on the platform, but they also have a commission fee per order like Amazon. Walmart now also has a service similar to Amazon's FBA called WFS . If you decide to use WFS for your products, you will pay monthly storage and shipping fees. However, it is not as easy to use WFS as it is to use FBA . The application pass rate is not high, so this is not a concern for most sellers.
2. Settlement and product listing
Compared to Walmart's complicated onboarding process, onboarding on Amazon is relatively simple. Once you set up your seller account in Amazon Seller Central, it's easy to get started. All you have to do is list the products you want to sell, and then you can start your business. Your product will have a standard identification number (usually UPC , EAN or ISBN ), but these are not difficult to obtain.
But Walmart is different. Walmart does not want too many sellers to sell on their platform. The biggest difference between the two platforms is here. Amazon is letting in anyone who wants to sell on Amazon, and while Walmart wants to see you sell successfully on other platforms before, to sell on Walmart you must complete an application and undergo their "trust and safety review." This review usually takes several weeks. If you are accepted, there is a very manual onboarding process compared to the automatic onboarding that happens when you sign up for Amazon Seller Central.
3. Pricing and BuyBox Competition
Amazon aims to make success available to all sellers, but the side effect of doing so is intense competition on the platform. A lot of sellers on Amazon know what they are doing in their short- and long-term strategies to help them win over consumers. Because of this level of competition, prices fluctuate frequently, so if you're serious about selling on Amazon, you'll have to react quickly. And use automated repricing tools to help you stay price-competitive and hold onto the BuyBox when you need to make adjustments. If you sell through FBA or SFP , then your chances of winning the BuyBox will naturally be higher because your shipping speed and reliability will directly affect the Amazon algorithm. If your sales velocity is also consistently high, you should be able to win the BuyBox too .
Walmart's prices are generally cheaper than Amazon's. Therefore, it is crucial to list competitive prices for your products on the platform, and if you are not competitive, you may get fired. Walmart places a lot of emphasis on whether prices are reasonable, and generally speaking, from a competitive standpoint, Walmart is much less competitive. So if you're willing to play by their rules as a seller, you have a great chance of digging through the Walmart marketplace and getting quick success for your product.
Fourth, transportation and distribution
When it comes to Amazon's shipping, you have to talk about Amazon Prime . When Amazon launched Prime , it changed the way consumers think about shipping and online buying habits. Being able to receive a package through Prime within a day or two is a huge competitive advantage for the Amazon platform, almost 75% of Amazon sellers use FBA only to earn the Prime badge, and some sellers use FBA in combination with overseas warehouse shipments. way to fulfill the order delivery. In short, Amazon's shipping and fulfillment infrastructure is amazing, both in terms of technology and physical shipping capabilities, and one of its huge differentiators.
Walmart recently launched Walmart+ to reduce this differentiation. Its benefits are similar to Prime , allowing Walmart sellers to offer fast shipping on certain categories of products. Walmart’s two-day shipping program helps sellers who want to spend more effort on the platform embody two-day shipping labels that help boost your product’s ranking in organic search rankings and therefore are more likely to be found by consumers . Overall, Walmart is slowly rolling out products very similar to what Amazon offers to catch up to its comprehensive service advantage.
5. Performance Standards
If you ship via FBA , you don't need to worry about Amazon's performance standards. A large part of using FBA is to use Amazon's logistics and consumer service capabilities to maintain high performance.
If you're selling through FBM , there are a few metrics to keep an eye on:
1. Order Defect Rate (ODR) – guaranteed to stay below 1% during the 60 -day rolling period. ODRs include negative feedback from your buyers, claims, and any chargebacks on credit cards at the time of purchase.
2. Cancellation rate – needs to stay below 2.5% over a rolling 7 -day period.
3. Late Shipment Rate – Need to be below 4% during 10 and 30 days.
Failure to meet these metrics using FBM may result in a warning or suspension notice from Amazon. As we all know, the impact of being warned or suspended by Amazon can be huge and can even bring your business to a screeching halt.
Walmart tracks core metrics similar to Amazon's for measuring performance. They want you as a seller to keep your ODR below 2% for 90 days. If your ODR continues to violate that metric, you'll get a warning, but Walmart is more likely to work with you to improve as they look to gain an edge over Amazon's competition.
6. Branding and Advertising
Generally speaking, consumers shopping on Amazon will not care about your brand. The vast majority of Amazon searches are product-specific, not brand-specific. Potential consumers are looking for a specific item and don't care about the brand that sells it, as long as the reviews are good and the product's description meets their needs. Of course it is very necessary to build and promote your brand on Amazon, both to protect your intellectual property and to gain more sales opportunities. With Amazon's Brand Registry, you have access to a variety of tools to help protect your products from copyright infringement or disrupting your business by being hijacked once you start to succeed.
And Walmart is a traditional brick-and-mortar brand, and because of this, Walmart consumers are more brand loyal and will search for products by brand. Therefore, there are not many sellers who advertise products on Walmart at present, and also because in a market with low competition intensity, it is not so difficult to obtain organic rankings. In addition, Walmart’s advertising is very directly related to the bid. Unless you are willing to exchange dollars for dollars, it is easy for gold sellers to grab advertising space with large budgets.
Now that you know the main differences between selling on these two platforms, it’s worth looking into some common mistakes sellers make on both platforms.
7. Common mistakes Amazon and Walmart sellers make
Common mistakes Amazon sellers make :
1. Not spending enough time on product listings ;
2. Enter the category with fierce competition;
3. Underestimating the importance of consumer services;
If you’ve been selling on Amazon for a while, you know the importance of making sure your product listings are clear and focused on keyword SEO , which will help your chances of getting more exposure. Image quality also matters, making your listing competitive with professional-quality photos. This may increase your short-term expenses, but you'll get the money back quickly because your listing looks professional and stands out from the rest.
There is a huge misconception that the way to be successful on Amazon is to start selling products that are already selling well, which is not true. When you do, you'll be in direct competition with sellers with thousands of reviews and curated product listings . In short, your chances of success are slim. Instead, look for products that are starting to show a good sales velocity but are still in a low profile.
And, you must respond positively to negative reviews. Difficult though, as every negative review can feel like a personal attack, and consumers spend a lot of time on negative reviews. Taking the time to respond to these comments professionally can help some misunderstood consumers solve their problems, and it can also help future consumers to see your professional customer service level.
The common mistakes Walmart sellers make are a little different.
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8. Common mistakes Walmart sellers make
1. Violation of Wal-Mart's performance standards;
2. Violating Wal-Mart's lowest price rule;
3. Forget about SEO optimization in their product listings ;
Walmart's performance standards and rules are hard to track, but that's how it is when selling on the platform. Before you launch your first product, you need to be very familiar with the Prohibited Product Policy and Seller Performance Standards.
Walmart's lowest price rule doesn't allow you to sell similar products at lower prices on other platforms. If you're going to sell at Walmart, the products you list must be price-competitive. When you first set pricing at Walmart, be very careful about how you set prices and maintain your multi-platform pricing system.
Because not many sellers use Walmart ads, organic ranking is much more important on Walmart than on Amazon. Make sure to take the time to understand SEO optimization and set up your product listings in a way that you can take advantage of. It can be a tough process, but it's a must if you're going to be competitive.
9. Why should successful Amazon sellers consider selling on Walmart?
If you're already selling successfully on Amazon, it's relatively easy to apply your Amazon success to the early stages of your Walmart business, and you'll be advancing this new business in a much less competitive environment. Beyond that, with the launch of Walmart+ , experienced sellers have a good chance of replicating the success they have on Amazon through Amazon Prime .
Selling on Amazon and selling on Walmart are two very different processes that require nuanced and special strategies, but instead of just giving up one and giving up the other, the two business strategies are implemented in parallel, learning from each other, and based on the platform's Learn more about adjusting your strategy in real time for maximum success.