Should you choose an Amazon individual seller vs professional account? This guide will cover the pros, cons, fees, and more.
Starting your ecommerce journey is exciting, and Amazon makes it easy to get your business up and running. And if you want to know how to become an Amazon seller, the first step is to choose your selling account.
Amazon has two main account types: individual and professional.
Each plan has advantages, disadvantages, requirements, and fees. Each account type caters to different sellers based on their products, sales volume, inventory amount, and more. Therefore, it’s integral to compare the two and know which is best for your needs.
Amazon Individual Seller Account
Brand new sellers and those who only use their ecommerce company as a side hustle would benefit from an individual account.
With an individual account, sellers only pay a fee when they earn a sale, helping new businesses save money. However, the individual account has other requirements to know first.
Benefits
The individual plan’s most significant benefits are the cost and flexibility. Paying a fee per sale avoids the monthly charge, which is perfect if you’re getting your toes wet in the ecommerce game.
This is also a better option for occasional and side hustle sellers since you don’t need to commit full-time to this plan.
Even if you plan to expand your business, the individual plan is a great way to test your Amazon business. You don’t need to make a steep investment to get started, and you can upgrade to a professional account when you’re ready.
Individual sellers can also access their Seller Central dashboard, which has integral functions like product listing creation, order and inventory management, and printing packing slips and shipping labels.
You can also participate in seller forums, getting many of the same perks as a professional account.
Drawbacks
While an individual plan offers many basic Seller Central features, it lacks some of the best ones. These include:
- Can’t automatically calculate taxes
- You must use Amazon’s shipping rates
- Can’t place special offers and discounts
- Unable to qualify for any featured listings
That’s why the individual account is the better option for new or side hustle sellers.
Requirements
Are you ready to know how to set up an Amazon account with an individual plan? You’ll need essential documents when signing up. These include your legal name and business name (if applicable), and address where you’ll be doing your business operations.
Note that your legal name will be kept private, and Amazon will only display your business name. Amazon also requires a shipping address; you can use a PO box for a home business.
Amazon will also ask for your contact information (such as a business email and phone number), a government-issued ID, bank account information, and tax ID (this can be a personal tax ID, such as your social security number).
It’s also important to note that you can use any business entity for Amazon, but they will ask for this information when you sign up.
Related content: LLC vs Sole Proprietorship on Amazon
Fees
Becoming an Amazon seller means you must pay fees. Individual sellers pay $0.99 for every sale. Sellers must also pay referral, closing, refund administration, and high-volume listing fees. Some fees pertain to specific products, such as rental book service fees.
Amazon Professional Account
If you’re a serious ecommerce seller or are ready to become one, the Amazon professional selling account should be your choice. This plan comes with a monthly fee, so it’s best when scaling up from an individual account, or if you are already running a business with booming sales.
Benefits
There are many reasons why an Amazon professional account is better for full-time ecommerce business owners.
For one, an Amazon professional account only has a monthly charge instead of a per-sale fee. If you run a high-volume business, this can prevent you from paying unnecessary fees.
Other benefits of an Amazon professional selling account include:
- Selling in restricted categories
- Accessing featured listings, such as the Buy Box
- Integrate with third-party tools and software
- You can use Amazon’s advertising and marketing tools
Drawbacks
Even though the professional Amazon seller account avoids costly per-sale fees for high-volume sales, you may have to pay additional costs depending on what you sell.
At the end of the day, you’re running a business, and sales are never guaranteed. If you get low sales for the month, you’ll still need to pay your Amazon monthly fee.
Requirements
Amazon professional sellers must supply the same information as an individual seller. Since you’re handling high-volume sales, having a fulfillment plan is also a good idea. Amazon offers FBA, but sellers can choose self-fulfillment or work with a 3PL.
Other ecommerce business models on Amazon include wholesale, private label, retail arbitrage, dropshipping, handmade, and digital products. If your business fits one of these categories, Amazon must know this beforehand.
Sellers should also research ways in which Amazon protects you and your customers. For example, if you own trademarked and copyrighted items, you can apply for brand registry on Amazon and protect your company from counterfeiters.
Fees
Amazon’s professional selling plan has a monthly subscription fee of $39.99. Like the individual account, sellers may have to pay referral, closing, refund administration, and high-volume listing fees. Some products also come with fees.
How to Choose the Right Selling Plan
Did you read this guide and are still struggling to choose an Amazon selling account? Ask yourself these questions:
- Are you selling products in a restricted category? If so, choose the professional plan.
- Do you sell more than 40 products a month? If the answer is yes, the professional plan will be more cost-effective.
- Would you like to take advantage of featured listings and Amazon’s tools? If so, choose the professional plan.
Other considerations to make include:
- Shipping
- Inventory management
- Bulk product listings
- Users on your account
Individual vs Professional Amazon Seller?
The first choice that all new Amazon sellers must make is which selling account is best for you. The Amazon individual seller vs professional accounts have pros and cons, and one may work better for one seller.
If you’re new to selling on Amazon or want the flexibility of a side hustle, the individual plan will work best. But if you’re ready to grow an existing ecommerce business or have a high sales volume, you’ll want to choose a professional selling account.
No matter which plan you choose, you don’t want to handle your business alone. Whether you’re launching a new ecommerce store or are a seasoned seller, we have solutions for you. Contact us to learn more.
Author
Stephanie Jensen has been writing ecommerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.
