The two big retailers, Walmart and Amazon, are struggling to become the go-to place for online shopping and commerce.
When Amazon launched its Fulfillment by Amazon (FBA) service in 2006, it changed the game for all sellers with this new model, making it the only ecommerce platform that offered a program like this. However, in February of 2020, Walmart launched its own version of FBA—Walmart Fulfillment Services. WFS has a lot of similarities with FBA, offering sellers access to its warehousing and delivery infrastructure.
In this article, we’ll review both fulfillment services and we’ll help you decide which service is more suitable for your business needs.
WFS vs. FBA Under the Microscope
Here’s a high-level comparison of Walmart Fulfillment Service and Fulfillment by Amazon:
|Walmart Fulfillment Services (WFS)||Fulfillment by Amazon (FBA)|
|2020 Revenue||$524 billion. The retailer has higher revenue because of its business model, leveraging its brick-and-mortar stores in conjunction with digital shopping.||$386 billion. Owns about 40% of the e-commerce market.|
|Number of sellers||124,755||1.5 million active sellers but no data as to how many sellers are under the FBA program.|
|Who can join these programs?||Only selected sellers.||Any seller who has an Amazon Seller account.|
|Do you need seller experience to start selling on the platform?||Yes, Walmart favors experienced sellers.||No.|
|Monthly fees||None.||Yes, $39.99 per month for the Professional Plan.|
|Any product restrictions?||Yes, limited size and weight.||No.|
|Maximum Shipment Weight||30 lbs||150 lbs|
|Maximum Product Dimensions||25” x 20” x 14”||108” longest side and 165” length + girth|
|Fulfillment Fees||Starts at $3.45.||Starts at $2.50.|
|Storage Fees||Q1-Q3: $0.75/cubic foot per month.
Q4: $0.75/cubic foot per month for items stored less than 30 days and $2.25/cubic foot per month for items stored for more than 30 days.
|Q1-Q3: $0.75/cubic foot per month for standard size products and $0.48/cubic foot per month for oversize products.
Q4: $2.40/cubic foot per month for standard size products and $1.20/cubic foot per month for oversize products.
|How are products stored?||Inventory is sorted by seller.||Inventory gets commingled.|
|How many FCs do they have?||It has over 150 distribution centers but no data as to how many of these are fulfillment centers.||110 fulfillment centers in the US and 185 centers globally.|
|Where is your inventory sent?||Ship to a single localization.||Ship to multiple fulfillment centers.|
|Product labeling||Doesn’t provide box labels or shipping labels.||Provides sellers with shipping labels.|
|Can you ship unbranded boxes?||No.||Yes.|
|When sending your products||Items must be sent to WFS from within the US.||FBA accepts international shipments as long as the products are labeled.|
|What should you include in the product packaging?||Sellers need to specify their country of origin and must include UPCs on the product packaging.||Sellers must include Amazon’s ASIN label or UPC.|
|Is multichannel fulfillment available?||No, only for Walmart.com.||Yes, Amazon can fulfill orders both within the Amazon FBA platform and through other channels.|
|Can you access different fulfillment options?||No.||Yes, Subscribe & Save and Amazon Small & Light.|
|Do you need a US business Tax ID to set up the fulfillment seller account?||Yes.||No.|
|Do you need a W9/W8 and EIN Verification Letter that verifies your US business address?||Yes.||No.|
WFS vs. FBA Highlights
- Anyone can join the FBA program, but WFS limits entry to eligible sellers who meet specific requirements.
- FBA requires sellers to ship inventory to multiple fulfillment centers whereas Walmart sellers only have to ship to one fulfillment center.
- WFS only accepts shipments within the U.S. while FBA accepts international shipments.
- With FBA, you can sell products of all sizes but WFS has limited product dimensions and limited weight.
- Amazon offers cheaper fulfillment fees than WFS.
- Storage fees are the same except for the last quarter of the year, where Amazon offers higher fees than WFS.
- When setting up a WFS account, you will need to have a lot of paperwork ready such as a US business tax ID and an EIN verification letter among other documents.
- Amazon provides sellers with shipping labels while WFS doesn’t.
- Amazon requires sellers to pay a recurring monthly fee in order to join the FBA program, but WFS doesn’t.
- FBA offers more fulfillment options and you can do multichannel but not with WFS.
Amazon vs. Walmart. What Is the Best Sales Channel for Ecommerce Sellers?
Amazon and Walmart compete not only in terms of fulfillment services but also in many other areas, such as fees and profitability.
Our article about Selling on Amazon vs. Walmart will provide an overview of these two retail juggernauts and explore their nuances from an ecommerce seller’s perspective. However, while we’ve determined which of the two is the overall winner when it comes to ecommerce, don’t forget that you can use both.
Before 2020, selling on Walmart wasn’t an option for many sellers because the marketplace didn’t offer logistics and warehousing services. However, the launch of WFS changed everything, and now there’s a competitive alternative to FBA — but only for selected sellers.
Walmart is winking at its competitors with WFS, but there is a big important disadvantage in this service and it’s that it only accepts shipments from within the US for now. So for now, Amazon’s FBA is still the one to beat.
What are your experiences with WFS and with FBA? Which one is more suitable for your business? Leave a comment below.