Walmart Fulfillment Services (WFS) vs. Fulfillment by Amazon (FBA): Which is the Best Option for You

Both marketplaces offer distinct advantages and limitations, making it crucial to understand them.

It can be tough for brands to navigate which of the two rival marketplaces, Walmart or Amazon, their products will sell best on. It's like choosing between a wild rodeo ride and a white-knuckle roller coaster for your order fulfillment process. However, the good news is that you have options, and it's not an all-or-nothing choice. In this article, we'll provide a side-by-side comparison of Walmart Marketplace's WFS and Amazon's FBA, debunk common myths, and offer valuable insights to help you make an informed decision.

By understanding the unique features and considerations of WFS and FBA, you can determine whether it's advantageous to use one platform exclusively, leverage both simultaneously, or select the platform that aligns best with your eCommerce goals.

2023 Industry Update

First things first, FBA has been around for a whopping 14 years longer than WFS, but Walmart is gaining ground quickly. In May of 2023, Walmart reported a 27% growth in eCommerce sales domestically due largely to expedited pickup and delivery options. Amazon also reported growth of 9% in Q1, but also holds a ~30% market share over the giant, according to Statista.

Let's get into the quick-hitter differences and similarities between the two below:

Walmart Fulfillment Services vs Fulfillment by Amazon

Category	Walmart Fulfillment Services (WFS)	Fulfillment by Amazon (FBA)
Number of Sellers	150,000 sellers	1.5 million active sellers
Seller Qualifications	Application process favoring experienced sellers. Have to provide multiple business documents.	Create an Amazon Seller account.
Monthly Fees	None.	Individual Plan: $0.99/unit sold Professional Plan: $39.99/mo
Standard Storage Fees	Q1-Q3: $0.75 per cubic foot Q4: $0.75 per cubic foot. Add $1.50 per cubic foot per month for items stored more than 30 days.	Q1-Q3: $0.87 per cubic foot. Q4: $2.40 per cubic foot.
Fulfillment Fees	Start at $3.45/unit.	Start at $3.22/unit,
Referral Fees	6%-15% per item sold	8%-15% per item sold
Number of Fulfillment Centers	31 dedicated ecommerce FCs supported by 4,700 stores and 210 distribution centers in the US.	150 FCs in the US with 185 FCs globally supported by over 2K distribution centers worldwide.
Receiving	Items must be sent to Walmart from within the US. Can not ship directly to Walmart from manufacturers overseas. You only have to ship your inventory to one fulfillment center	Accepts international shipments as long as products have labels. You have to ship inventory to multiple fulfillment centers.
Prep Services	Polybagging: $0.60/unit Item Labeling: $0.45/unit An extra $0.20 for products that don't meet standards.	Polybagging: $0.50/unit Item Labeling: $0.55/unit An extra $1.99 for products that don't meet standards.
Labeling Requirements	GTIN, UPC, or EAN Does not accept FNSKU.	UPC + FNSKU
Nationwide Coverage	Yes.	Yes
Cross Border Selling	Not at this time.	Yes.
Free Customer Shipping	Free shipping without membership fees or minimum orders.	Free shiping to Prime Members only.
Return Options for Customers	Free 30-90 day returns, regardless of membership, unless noted otherwise. Can return in-store, for free through FedEx or schedule a pickup from your home.	Free 30 day return for Prime Members, unless noted otherwise. Can return via UPS, Whole Foods, or Amazon Hubs.

Comparison Highlights

Number of Sellers and Competition

When it comes to the number of sellers, Amazon takes the lead with an impressive 1.5 million active sellers, whereas Walmart Marketplace has around 150,000 sellers. This means that on Amazon, your product will face more competition, especially for general searches and broad categories. It may require a stronger advertising strategy to stand out from the crowd.

Seller Qualifications

Becoming a seller on Amazon is relatively straightforward - all you need to do is create an Amazon Seller Account and choose your plan. No proof of business or selling experience is required and it usually takes around 24 hours to be approved.

However, the process for Walmart is more involved and favors experienced sellers. They have specific qualifications you must meet to join the marketplace, including a valid Business Tax ID or Business License Number, supporting documents to verify your business name and address, a history of marketplace or eCommerce success, products with GTIN/UPC GS1 Company Prefix Numbers, and compliance with Walmart's Prohibited Products Policy. Additionally, fulfillment through Walmart Fulfillment Services (WFS) or another B2C U.S. warehouse with returns capability is required. Once you send in your application, it could take anywhere from 2-4 weeks to be approved.

Fees

Monthly fees vary between the platforms. Walmart doesn't charge a monthly fee, whereas Amazon has two options: an Individual Plan with a flat fee of $0.99 per unit sold, or a Professional Plan priced at $39.99 per month with no limit on units sold.

When it comes to fulfillment fees, Amazon's start at $3.22 per unit, slightly lower than Walmart's $3.45 per unit. However, both platforms consider product weight and dimensions, so using their fee calculators can give you a better understanding of the actual costs.

Storage fees are lower on Walmart, with a price of $0.75 per cubic foot, compared to Amazon's $0.87 per cubic foot. During the Q4 holiday season, both platforms increase their storage fees, but Walmart remains cheaper at a range of $0.75-$1.50 per cubic foot, while Amazon charges $2.40 per cubic foot for the three-month period.

Referral fees, which are a percentage of the price of products sold, differ by product category. Walmart generally has a slightly lower referral fee percentage, ranging from 6% to 15% with an average of 12.43%, while Amazon ranges from 8% to 15% with an average of 13.23%. However, some common categories have the same referral rate on both platforms.

It's important to note that there are additional fees associated with each platform, such as product prepping, compliancy penalties, and returns processing. These fees can vary and may require further research.

Receiving Products and Fulfillment Centers:

When receiving product, Amazon accepts international shipments as long as products have labels, whereas Walmart only accepts shipments from within the contiguous US. However, Walmart compensates for this by allowing you to ship all your products to one fulfillment center, where they take care of the rest. In contrast, Amazon may require you to ship products to multiple locations.

Amazon has an extensive network of fulfillment centers, with 150 in the US and 185 globally, along with over 2,000 dedicated distribution centers worldwide. Walmart has 31 dedicated fulfillment centers and 210 distribution centers in the US. Additionally, Walmart's 4,700 stores across the nation provide a competitive advantage in terms of returns and serving rural locations.

Customer Experience

Walmart leverages its physical footprint to provide a superior eCommerce shopping experience. Customers have the convenience of picking up and returning products at Walmart stores, even if they were purchased as online exclusives. This advantage is particularly significant for customers living in rural areas where UPS, Whole Foods, or Amazon Hub locations, Amazon’s preferred return methods, may not be easily accessible.

Walmart.com also offers a seamless shopping experience with no barriers to buying products. Customers qualify for free shipping without requiring a membership or meeting a minimum order value. In contrast, Amazon requires a Prime membership to qualify for free shipping.

Enlisting a 3PL to Help

Choosing between Walmart Fulfillment Services (WFS) and Fulfillment by Amazon (FBA) depends on your business goals, target audience, and budget. Consider factors such as proximity to your target market, the scale of your operations, and the platform's specific requirements.

To optimize your WFS and FBA operations, partnering with a trusted third-party logistics (3PL) provider, like Nice Commerce, can be a smart move. A 3PL offers expert guidance on compliance, streamlines product prepping to align with platform guidelines, manages freight effectively, and provides stockout protection through advanced inventory systems and proactive monitoring.

Still unsure which option is best for you eCommerce business or need more information? We're here to help! Hit us up HERE, slide into our DM’s on Instagram, or give us a call at (843) 266-7560 (yes, for real and someone will answer!) Our experienced team would love to help you make informed decisions and maximize the potential of your WFS or FBA strategy.

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