The recent flood of third-party sellers offering items for sale on Amazon has left some the e-tailer’s older marketplace merchants feeling left behind and unappreciated. So they’re taking their wares and going over to Walmart’s website, where they have fewer competitors and pay smaller commissions.
Bloomberg reports that many Amazon merchants looking for a bigger piece of the sales pie are heading to Walmart.com, a place they see as the Amazon of a decade ago, with a vast, untapped marketplace.
The exodus to Walmart, many sellers say, is a result of Amazon’s changing requirements and a never-ending list of competitors.
For instance, one seller tells Bloomberg that he migrated to Walmart.com after finding it was hard to compete on a marketplace where tens of thousands of other sellers were offering the same or similar products.
Another reason for the move, some sellers say, is their bottom line. Walmart takes a smaller cut of each transaction — about 15% — compared to the 30% Amazon receives when advertising and pre-sale commission are figured in, Bloomberg reports.
Similarly, merchants say that Walmart’s own investment in Google ads provides them with more exposure than they received when they had to purchase their own ads on Amazon.
Additionally, sellers claim that Amazon’s treatment of merchants has changed over the years, making them feel less valued. For instance, vendors say that Amazon now requires them to purchase ads in order to be seen, charges higher fees, and often kicks off sellers after customers complain.
“We could not sit back and depend on Amazon and have all our eggs in one basket,” Robert Roque, a health and beauty merchant, tells Bloomberg of moving some of his inventory to Walmart.
Now, instead of generating 90% of his sales from Amazon, Roque says about 50% comes from the e-commerce giant.
While more third-party sellers may be heading to Walmart, this doesn’t mean the company is quite at Amazon’s level yet.
For starters, Amazon has about two million sellers, while Walmart has just a few thousand. As a result, Amazon offers some 350 million products for sale, while Walmart has just 50 million, according to Bloomberg.
Additionally, catching up to Amazon will take time, especially considering Walmart’s marketplace strategy: third-party sellers have to be invited by the company to sell their goods.