Walmart is the second-largest online marketplace in the U.S., behind Amazon. It is experiencing rapid growth, creating exciting new opportunities for eCommerce sellers. With its expanding infrastructure and a concerted effort to bring more international sellers into the fold, Walmart is no longer the difficult platform it once was to join. Its appeal lies in lower fees, higher profit margins, and less competition, making it particularly attractive for small to mid-sized businesses ready to grow.
Walmart vs Amazon: Key Differences
To help you decide if Walmart Marketplace is right for your business, here’s a head-to-head comparison with Amazon:
| Feature | Walmart | Amazon |
| Monthly Fees | $0 | $39.99/month |
| Total Sellers (U.S.) | ~160,000 | ~1.1 million |
| Fulfillment Service | Walmart Fulfillment Services (WFS) | Fulfilled by Amazon (FBA) |
| Delivery Time | 2-day delivery for eligible orders | 1 day for Prime members |
| Fulfillment Fee Model | Simple, weight-based, consistent pricing | Complex, tiered, seasonal surcharges |
Walmart’s model favors transparency and consistency, particularly with fulfillment costs and fewer surprises at peak seasons.
Who Can Sell on Walmart Marketplace?
Walmart’s seller approval process is more selective than Amazon’s open-door policy. The benefit? Less competition and higher buyer trust. Walmart is primarily seeking:
- Established businesses with strong performance on platforms like Amazon, eBay, or Shopify
- Operational maturity, including customer service, inventory management, and reliable returns processing
- Brand owners or authorized resellers, with proper authorization or product rights
In contrast, Walmart generally does not accept:
- Individuals or sole proprietors without formal business registration
- Dropshippers using unverified or slow overseas suppliers (e.g., AliExpress)
- Sellers without U.S.-based shipping and return logistics
If you’re serious about eCommerce and have a legitimate business structure, you’re more likely to be approved — and more likely to thrive on the platform.
Why Choose Walmart Over Amazon?
In 2024, Walmart Marketplace sellers collectively generated around $65.4 billion in gross merchandise value (GMV), about 10% of Amazon’s $641 billion. Despite the size difference, Walmart’s marketplace is growing faster, with a 22.5% year-over-year increase versus Amazon’s 19.9%.
Profit margins are a significant reason sellers are turning to Walmart. Reported margins range from 17–22% to 15–20% on Amazon. Although seemingly small, that difference can mean thousands of dollars in extra profit over the year.
Additionally, Walmart’s algorithm favors organic rankings more than Amazon’s, which heavily emphasizes paid advertising and A+ content. This makes it easier for small and mid-sized businesses to get visibility without investing heavily in SEO and ads.
Amazon certainly has a broader reach, but Walmart offers a level playing field, ideal for building a sustainable business without engaging in a race to the bottom.
WFS vs FBA: Fulfillment Fee Comparison
Walmart Fulfillment Services (WFS) provides streamlined storage, picking, packing, shipping, and returns processing. Its pricing model is:
- Weight-based: For example, a 1–2 lb item might cost $4.95 to fulfill
- Year-round flat-rate storage fee: $0.75 per cubic foot per month
- Returns included: Processing is handled directly by Walmart
By contrast, Amazon FBA offers:
- Tiered fulfillment fees based on size, weight, and category
- Peak season surcharges: Storage rates jump to $2.40/cu ft during Q4
- Additional fees for returns in specific categories
Sellers with larger or seasonal inventory often find WFS more affordable and predictable. The simplicity of its fee structure is especially valuable for businesses trying to manage margins tightly.
Requirements to Apply as a Walmart Seller
Before you apply to become a seller on Walmart Marketplace, ensure you meet the following requirements:
- Registered Business Entity: This can be a U.S. LLC or corporation, or an approved foreign business
- U.S. Bank Account: Needed to receive payments. Services like Payoneer can help non-U.S. sellers
- U.S. Address (preferred): While not mandatory, it’s advantageous for return handling; many sellers use 3PL services
- Product Compliance: Your items must meet U.S. regulatory, safety, and labeling standards
- Reliable Fulfillment: Either via WFS or a reputable third-party logistics provider (3PL)
Providing these elements helps with application approval and ensures your account remains in good standing.
Sales Tax and Nexus Considerations
Walmart doesn’t require non-U.S. businesses to submit an Employer Identification Number (EIN) at the time of application. However, your business may develop sales tax nexus in the U.S. based on two common triggers:
- Physical Nexus: Storing inventory in U.S.-based warehouses such as those used by WFS or 3PLs
- Economic Nexus: Crossing thresholds like $100,000 in revenue or 200+ transactions in individual states
Once the nexus is triggered:
- You’ll likely need to register for state sales tax permits
- In most states, Walmart collects and remits sales tax on your behalf, but you are still responsible for keeping your registrations and records in order.
- You may also be liable for federal income taxes if your operations create a “permanent establishment” under IRS rules.
For example, if your inventory is stored in multiple states or your sales volume increases quickly, you may inadvertently create tax obligations. Ignoring these could lead to penalties or unexpected tax bills down the line.
This is where professional advice becomes crucial. Consult a tax professional like RJM Tax Exemption to understand your obligations and stay compliant as you scale your business.
Getting Started: Step-by-Step
Here’s a simplified roadmap to help you launch successfully:
- Assess Eligibility: Ensure your business meets Walmart’s requirements
- Prepare Documentation: Gather proof of business history, banking info, and operational readiness
- Apply on Walmart Marketplace: Complete the online application at marketplace.walmart.com
- Integrate Fulfillment: Decide between Walmart Fulfillment Services or a trusted 3PL
- Stay Compliant: Set up tax registrations if required, and maintain high customer service standards
Be thorough in your application and proactive in setting up logistics and compliance — this is key to getting approved and succeeding long-term.
Conclusion
Walmart Marketplace is rapidly emerging as a top-tier alternative to Amazon, especially for businesses prioritizing profitability and control. With lower fees, higher margins, and fewer competitors, it represents a unique opportunity in today’s crowded eCommerce landscape.
Whether you want to diversify away from Amazon or start fresh on a more manageable platform, Walmart has the tools and support systems to help you grow.
Need help navigating the application process, tax registrations, or U.S. logistics? Contact RJM Tax Exemption today — and let us guide you every step of the way.
