- Amazon and Walmart offer two of the top third-party e-commerce sites on the market.
- Both companies take a cut of every sale, but the amount differs based on product category.
- Amazon takes considerably more money from sellers, but sources say that the fees are worth it.
- See more stories on Insider's business page.
Amazon and Walmart run two of the top third-party marketplaces on the inte. But there are glaring differences in how these two e-commerce giants stack up in terms of fees charged to third-party sellers.
According to 10 entrepreneurs that sell goods on both Amazon and Walmart, selling on Amazon is considerably more expensive than on Walmart.
Currently, Amazon charges merchants $39.99 per month to run an account. Walmart, on the other hand, has no such monthly charge.
Black Label Advisor CEO and founder Jon Elder, who consults for third-party merchants, told Insider said that Amazon's monthly fees are a "common complaint" for sellers, who view the nearly $40 price tag as "highway robbery." But still, he said that the cost is worth it for most merchants, as Amazon has a more "attractive marketplace" than Walmart.
"It's painful, but still the best ecosystem in town," Elder said.
Whenever a merchant makes a sale on Amazon and Walmart, the platform takes a cut of the sale. That percentage varies widely across both sites, based on select categories.
Amazon's seller referral fees start at 6% and go up to as high as 45%. For example, Amazon takes home 45% of the purchase price, excluding tax, on accessories sold for Amazon devices. Seller referral fees on office products, kitchen, and video games are all 15%.
Walmart's fees have a lower ceiling, ranging from 6% to 20%. Jewelry sold by users, for instance, could be hit with a fee of 20% of the sale while office products, kitchen, and video games — similar to Amazon — are all charged 15%. On both sites, the category of personal computers attracts the lowest seller referral fee, at just 6%.
Ivan Ong, cofounder of baby-product brand KeaBabies, said that both Walmart and Amazon charge his company a 15% seller referral fee, given his business category. The company raked in around $20 million in sales last year. Amazon ended up taking around $2.7 million, off a total of $18 million in sales on the site. Walmart took a cut of around $100,000, Ong said.
Third-party sales are big business for both Amazon and Walmart. Reuters reported that third-party merchants on Walmart jumped from 1,000 in 2016 to 70,000 in 2020. And Amazon's third-party sellers generated $386 billion — 54% of net sales — for the company in 2020. Amazon is also adding more than 3,000 new sellers per day to its marketplace in 2021.
The 10 business owners that spoke with Insider said that despite Walmart's lower fees, Amazon is their e-commerce platform of choice to hawk their wares. Though Amazon charges $40 per month to hold an account, the company offers better fulfilment services, a more robust website, and more extensive seller support.
"Amazon is king right now," Elder told Insider.