Meta Title: Walmart vs Amazon Profit Margins Comparison – Which Marketplace Is More Profitable?
Meta Description: Discover the profit margin differences between Walmart and Amazon. Learn fees, competition, and profitability tips to choose the best marketplace for your eCommerce business.
Introduction
Choosing the right marketplace is one of the most important decisions for any eCommerce seller. Two of the biggest platforms in the world are Amazon and Walmart. Both offer massive customer bases and strong selling opportunities, but the profit margins can vary significantly.
Many new sellers assume Amazon is always more profitable, but Walmart Marketplace has been growing rapidly and often offers lower fees and less competition.
In this guide, we will compare Walmart vs Amazon profit margins, including fees, competition, advertising costs, and overall profitability for sellers.
Understanding Profit Margins in eCommerce
Profit margin simply means the percentage of profit you keep after all expenses.
Typical expenses include:
- Product cost
- Shipping and fulfillment
- Marketplace fees
- Advertising costs
- Returns and refunds
A simple formula:
Profit Margin = (Selling Price – Total Costs) ÷ Selling Price × 100
Example:
Selling price: $40
Total cost: $28
Profit = $12
Profit Margin = 30%
The platform you choose directly impacts these costs.
Amazon Profit Margins for Sellers
Amazon is the largest eCommerce marketplace in the world, with millions of daily shoppers.
Average Amazon Seller Profit Margins
Most sellers earn:
- 15% – 30% profit margins
- Some private label brands reach 35% or more
However, several costs reduce profits.
Amazon Seller Fees
Common fees include:
1. Referral Fees
Amazon charges 8% – 15% per sale depending on the category.
2. Fulfillment Fees (FBA)
Many sellers use Fulfillment by Amazon, where Amazon handles:
- Storage
- Packing
- Shipping
- Customer service
But FBA fees can significantly impact profit margins.
3. Storage Fees
Products stored in Amazon warehouses incur monthly storage costs, especially during Q4.
4. Advertising Costs
Amazon is highly competitive, so sellers often rely on Amazon Advertising to rank products.
Ad spend can consume 10%–30% of revenue.
Advantages of Selling on Amazon
✔ Massive global audience
✔ Fast shipping with FBA
✔ High customer trust
✔ Advanced advertising tools
Disadvantages for Profit Margins
❌ High competition
❌ Rising advertising costs
❌ Storage and fulfillment fees
❌ Strict seller policies
Walmart Seller Profit Margins
Walmart has quickly become one of the fastest-growing marketplaces for online sellers.
Although smaller than Amazon, Walmart Marketplace offers better profit potential for many sellers.
Average Walmart Seller Profit Margins
Most Walmart sellers achieve:
20% – 40% profit margins
Why margins are higher:
- Lower competition
- Lower advertising costs
- No monthly seller subscription
Walmart Seller Fees
1. Referral Fees
Walmart charges 6% – 15% referral fees, depending on product category.
Unlike Amazon, Walmart does not charge a monthly seller fee.
2. Fulfillment Options
Sellers can choose:
- Self-fulfillment
- Third-party logistics
- Walmart Fulfillment Services
WFS works similarly to Amazon FBA but often with lower fees.
Advantages of Walmart for Profit
✔ Lower competition
✔ Lower advertising costs
✔ No monthly seller fee
✔ Higher visibility for new sellers
Disadvantages
❌ Harder approval process
❌ Smaller customer base than Amazon
❌ Limited international reach
Walmart vs Amazon Profit Margin Comparison
| Factor | Amazon | Walmart |
|---|---|---|
| Average Profit Margin | 15% – 30% | 20% – 40% |
| Referral Fees | 8% – 15% | 6% – 15% |
| Monthly Seller Fee | $39.99 | Free |
| Competition | Very High | Medium |
| Advertising Costs | High | Lower |
| Traffic | Extremely High | Growing Fast |
Example Profit Margin Comparison
Let’s compare a product selling for $50.
Amazon Example
Selling price: $50
Product cost: $18
FBA fee: $10
Referral fee: $7.50
Ads: $5
Profit = $9.50
Profit margin ≈ 19%
Walmart Example
Selling price: $50
Product cost: $18
Shipping: $8
Referral fee: $7
Profit = $17
Profit margin ≈ 34%
This example shows how lower fees and advertising costs can increase profits on Walmart.
Which Marketplace Is Better for Profit?
The best platform depends on your business strategy.
Amazon Is Better If:
- You want massive traffic
- You use private label products
- You rely on FBA logistics
Walmart Is Better If:
- You want higher profit margins
- You prefer less competition
- You use dropshipping or wholesale
Many successful sellers now use both platforms to maximize revenue.
Pro Tip: Sell on Both Platforms
Top eCommerce sellers diversify across marketplaces.
A smart strategy is:
- Launch products on Amazon
- Expand listings to Walmart
- Use Walmart to increase profit margins
This multi-marketplace approach helps reduce risk and increase total sales.
Final Thoughts
Both Amazon and Walmart offer excellent opportunities for online sellers.
- Amazon provides massive traffic and strong logistics
- Walmart offers higher profit margins and less competition
The most profitable strategy today is selling on multiple marketplaces while optimizing product costs, advertising, and fulfillment.
If you’re serious about building a long-term eCommerce business, learning both platforms can significantly increase your profits.