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Business Operations Business Models

How Does Walmart Make Money (Business and Revenue Model)

The Walmart business model

How Does Walmart Make Money?
Here’s what you should know:
  • What is Walmart, and how does Walmart work?
  • How does Walmart make money?
  • In-Store Merchandise Sales
  • Walmart Plus Membership
  • Advertising (Walmart Connect)
  • E-commerce Sales
  • Walmart’s Subsidiaries, Acquisitions, and Exits
  • Walmart’s profit and revenue
  • What is the Walmart business and revenue model?
  • Walmart’s funding and valuation

How does Walmart make money? Here is a full, in-depth, breakdown of their four (4) revenue streams and the different products and services they offer, as well as the Walmart business model, their year-over-year revenue, and how Walmart works.

What is Walmart, and how does Walmart work?

Walmart is a retail superstore that operates in 24 countries offering discount prices.

Founded in 1962 by Sam Walton, Walmart is the largest company in the world by revenue with $559.2 billion in revenue in 2020. They attract more than 220 million customers and members who visit their approximately 10,500 stores and clubs worldwide weekly.

Some of Walmart’s competitors include Costco, BJ’s, Sam’s Club, and other wholesale big box retailers.

Walmart App in Apple App Store | Walmart Business Model | How Does Walmart Make Money?
Source: Apple App Store

How does Walmart make money?

According to Walmart’s about page, Walmart gets roughly 220 million weekly customers and members visiting their approximately 10,500 stores and clubs worldwide as well as their eCommerce websites. So how does Walmart make money off of all these returning customers to their stores and websites?

Below is a breakdown of how much money Walmart makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 4 ways of how Walmart makes money (in 2021):

Walmart has a revenue model that makes money in four (4) ways – in-store merchandise sales, memberships, advertising, and eCommerce sales.

#1. In-Store Merchandise Sales

Walmart makes the bulk of its money through retail sales. In fact, in 2020, Walmart pulled in roughly $370 billion in retail sales, giving them a 9.26% revenue share of the total retail sales worldwide which was $25.04 trillion in 2020.

According to Walmart’s Location Facts page, they currently have over 10,500 stores and clubs worldwide with more than 10,500 total retail units in-store.

Note: 66.2% of Walmart’s total revenue came from retail sales in 2020.

#2. Walmart Plus Membership

In September 2020, Walmart rolled out its first-ever membership, Walmart Plus. Since being introduced, Walmart Plus has already attracted 7.4 million to 8.2 million members according to Forbes.

Some of the benefits to being a member include free shipping with no order minimums, free deliveries, up to 85% saving at Walmart pharmacies, $0.05 savings per gallon at Walmart & Murphy gas stations, in-store mobile checkout, and more.

Walmart Plus Cost:

  • $12.95 per month or $98 per year
Walmart Plus | Walmart Business Model | How Does Walmart Make Money?
Source: Business Insider

#3. Advertising (Walmart Connect)

Walmart also makes its money through its advertising division, Walmart Connect.

How Walmart Advertising works is: After advertisers sign into their Walmart Ad Center account, they then create a new ad campaign and set their budget, choose the ad type (Search or Display), select bid multipliers, and choose the products they want to advertise.

According to Forbes, Morgan Stanley estimates Walmart’s annual ad revenue to be about $500 million and said it could grow to $4 billion by 2025.

#4. E-commerce Sales

Walmart also sells products through its eCommerce websites, which they divide into three segments: Walmart U.S, Walmart International, and Sam’s Club. Combined, they brought in a total of $39.7 billion in revenue in 2020, according to a Statista chart.

Walmart’s Subsidiaries, Acquisitions, and Exits

To date, Walmart Inc has made a total of 27 acquisitions, 19 investments, 12 lead investments, and 7 successful exits.

Walmart Acquisitions
Source: Crunchbase

Walmart’s profit and revenue

In 2020, Walmart reported $559.2 billion in revenue.

Note: Because Walmart Inc is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Walmart’s publicly released financial reports, including annual reports, through Walmart’s investor section on their website.

What is the Walmart business and revenue model?

Walmart makes money through a few revenue models that they combine within their company, they are:

  • Transaction based business model
  • Advertising based business model
  • Subscription based business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

Walmart’s funding and market cap

As of August 2021, Walmart has a market cap of $417.68 billion.