WalMart's marketplace (3rd part sellers) is just getting off the ground. Give it time... FBA is not a complicated beast like you make it out to be. As the Parent correctly pointed out, there's a plethora of companies that do nothing except fulfillment for distributors. There's nothing "hard" about copying the FBA model.

> For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart)

You seem to be deliberately comparing apples and oranges here.

You claim Amazon has 42 million Prime-eligible SKU's, and them compare that to how many SKU's exist in an average Walmart warehouse... forgetting that Prime-eligible SKU's don't all reside in Amazon warehouses... a 3rd party seller can warehouse that inventory on their own.

You also don't state how many warehouses Amazon has, nor the average number of SKU's in their warehouses, nor how many warehouses Walmart has, nor account for Walmart stores that serve dual purpose as warehouses. That makes your comparison useless, really.

At a point, it becomes sub-optimal to store more SKU's in a single warehouse, so they open a new distribution center and shuffle products around based on expected demand in the region (closer warehouse to the customer means faster delivery at less expense).