Starting an Amazon business?
You’ve got a major decision to make, and that’s choosing to register as an individual seller or a professional seller on Amazon.
Both options have their benefits and downsides, with the professional seller plan offering better perks. However, it may not be necessarily the best choice for you.
This quick guide explains and compares the Amazon individual seller vs professional seller account types to help you figure out which option suits you best.
Let’s dig in!
Introduction to Amazon Seller Plans
Both individual and professional seller accounts give you selling privileges on the largest e-retailer platform in the world. But they are designed to serve different types of sellers.
While both seller accounts come with certain fees (we’ll get into that shortly), they have one major difference, and that’s the projected sales volume.
The individual seller account is an ideal choice if you anticipate selling only about 40 units or less of your products per month.
On the other hand, you will be better off with the Amazon professional seller plan if you plan to sell higher volumes (more than 40 items per month).
Let’s get into the differences between these account types in greater detail.
Amazon Individual Seller Account
Amazon is not strictly for the big brands. Yes, just about anyone can sell their products on the platform.
But since things can appear very daunting, especially for individuals without prior online selling experience, the Amazon individual seller account would be a better choice for those looking to test the waters.
This account type comes with the following features:
- Zero subscription fees: You don’t have to worry about paying a recurring monthly subscription fee because there is none.
- Free product listing: You can list your products without paying a dime.
- Per item fee: Amazon will charge you a flat rate of $0.99 for every item you sell.
- Temporary halt listings: You can make your listings inactive for when you want to take a break from selling. For example, if you can’t fulfill orders due to a vacation, inclement weather, or family emergency.
Now you know that the “40 items per month” recommendation for an individual seller account is not merely arbitrary. Do the math and you’ll figure out that paying $0.99 in 40 places (or less) per month is the only way to stay profitable if you choose this type of account.
If you sell 41 items, you will pay $0.99 x 41 ($40.50 in fees), and that’s already more than the monthly subscription fee for a professional seller account.
In a nutshell, the Amazon individual seller account type is a more cost-effective option for anyone selling less than 40 items per month.
Having said that, the individual plans have restrictions on the type of products you can sell on Amazon.
Some of the restricted items for individual seller accounts include:
- Health and personal care
- Beauty products
- Automotive parts, tools, equipment, and accessories
- Shoes, handbags, and sunglasses
- Clothing and accessories
- Luggage and travel accessories
- Gourmet and grocery food
You will need to sign up for a professional seller account if you plan to sell any of the above items.
Also, keep in mind that individual sellers can’t do the following:
- Use Amazon’s advertising services
- Run promotions on Amazon
- Have access to in-depth inventory reports
- Set shipping rates
- Create listings in bulk
- Add multiple users to their account
But you don’t have to opt for the professional selling plan if you are just getting started. Amazon makes it easy to switch between plans, so feel free to start with the individual account and switch to the professional plan once sales pick up.
Amazon Professional Seller Account
For sellers looking to take their business to the next level, an Amazon professional seller account is a must-have. This account type offers more benefits that can lead to more sales volume and higher profits.
With this plan, you can sell items in more product categories than an individual seller account allows.
We’ll get into more benefits in a bit, but for now, here are some of the main features of the professional seller account:
- Monthly subscription: It will cost you $39.99 per month to have a professional seller account. The amount is charged when you create the store account.
- No flat rate: You won’t have to pay any fee for each item sold. The monthly subscription covers everything whether you sell just one or a thousand items in a month.
- Product page: You can create and edit new product pages in the Amazon catalog and include your product listings for free.
- Temporary halt listings: Similar to the individual seller plan, you can also make your listings inactive when you want to take a break from selling.
Keep in mind that both individual and professional seller plans may include referral fees, fulfillment fees, and variable closing fees ranging from 6% to 15%.
You can start your Amazon retail business as a professional seller, regardless of whether or not you are a beginner. This is a recommended course of action if you want to take your business more seriously.
Benefits of a Professional Seller Plan
This comparison of Amazon individual seller vs professional seller plans will be incomplete without mentioning at least a few of the advantages of signing up as an Amazon professional seller.
The major benefits of the professional seller account type include the following:
You Save Cost on Items Sold
While the subscription fee is $39.99, it takes only 40 items each month to break even with a professional seller plan.
You can sell 500 products or more and still pay the same amount. This is uncommon compared to other businesses where your fees typically go up with more sales.
Of course, you may not be sure if you can sell up to 40 items every month, especially as a beginner. But that’s very possible with the FBA program.
You Are Eligible for the Buy Box
The Buy Box is a coveted piece of real estate on Amazon that every seller would love to have. The feature allows customers to easily add products to their shopping cart instead of going through additional steps before making a purchase.
In other words, the Buy Box lets you sell out your products a lot faster than if you don’t have access to it.
You can become eligible for the Buy Box if you have a professional seller account. Individual sellers can’t access the Buy Box unless they are FBA sellers.
You Get Access to Third-Party Services
Listing multiple items on Amazon can be very laborious and time-consuming, and that’s what’s typically available with an individual account.
A professional account gives you access to third-party services that can make the task a lot easier. Some of these services include PPC tools, repricers, inventory lab, email autoresponders, and more.
You can also have access to review and feedback tools that are very helpful in understanding what your customers really want to buy. Feedback tools also allow you know what shoppers think about your products.
Access to Helpful Reports
Online selling without proper order information and a good way to manage inventory is usually a recipe for failure.
With a professional seller account, you can get access to helpful reports that will help you keep an eye on these crucial aspects of your Amazon business.
Ability to Apply for and Sell Restricted Products
Although Amazon is known as “The Everything Store,” certain items are restricted and will require approval to sell them on the platform.
Some of these product categories include groceries, jewelry, fine art, and several others, which you can find here.
If you plan to apply to sell any of the restricted products, the first step would be to sign up as a professional seller.
You Get Access to Sponsored Products Feature
Another important advantage that the professional selling plan gives you is the ability to access the Sponsored Products feature.
This is a must-have tool if you want to optimize your listings and target buyers on Amazon based on search terms or keywords.
Used correctly, the Sponsored Products features can increase visibility for your products and, in turn, boost your sales.
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Amazon individual seller vs professional seller plan – which should you choose? Ultimately, it comes down to why you want to sell on the world’s largest e-retailer platform, to begin with.
Consider an individual seller plan if you plan to make a few extra bucks on Amazon. A smarter choice would be to sign up for an Amazon professional seller plan if you plan to build a successful retail business and earn a regular income.
But if you’re still unsure, we recommend starting with an individual seller account and then switching to a professional seller account if your sales volume is more than 40 items per month.