In this article, you will know the necessary knowledge to make the right choice for your Amazon FBA journey.
Are you a new Amazon seller? Embarking on your Amazon FBA journey often leaves you pondering the choice between an individual or professional seller account.
It's essential to recognize that each Amazon seller account option comes with its own set of pros and cons. Today, we'll delve into these factors to provide you with valuable insights that will help you make an informed decision about your Amazon FBA business.
Topic Rundown:
- What is an Individual Seller on Amazon?
- Benefits of Using an Individual Selling Account
- Cons of Using an Individual Selling Account
- What is a Professional Seller on Amazon?
- Benefits of using a Professional Seller Account
- Cons of using a Professional Seller Account
- Which is better?
- Things to Consider Before Choosing an Amazon Seller Account
- Can you upgrade from Individual Seller Account to Professional Seller Account?
When establishing your Amazon seller account, presents you with two options: Individual and Professional Seller accounts.
Going for a Professional Seller account entails a monthly fee, but it also comes with added advantages granted by Amazon to these types of sellers.
Regardless of the account type you select, it's important to acknowledge that you are embarking on a business venture.
What is an Individual Seller on Amazon?
The individual seller account is ideal for those who have limited selling intentions or are merely testing the waters on Amazon. It's important to note that while the individual seller account doesn't incur a monthly subscription fee, there is an additional fee of $0.99 per item sold. Additionally, both account types are subject to referral fees and variable closing fees. Individual Sellers typically use their personal information to create their seller accounts. This means they might use their personal name and contact details, rather than a business name.
To learn more about Amazon Fees, you can watch our YouTube video that explains all the fees when you want to start selling on Amazon.
Benefits of Using an Individual Selling Account
Using an Individual Selling Account on Amazon stores offers benefits such as no monthly subscription fee, making it cost-effective for occasional or low-volume sellers. Regardless of the account type, product listings on Amazon are FREE, and you pay the fees upon the sale of the items.
Here are some benefits of using an Individual Selling Account:
No Monthly Subscription Fee
Individual Sellers do not have to pay a monthly subscription fee, unlike the Professional Selling plan which is required to pay a monthly fee. This can be advantageous for sellers who only plan to list a few items or sell on a very limited scale.
Lower Upfront Costs
Since there is no monthly fee, Individual Sellers can get started with selling on Amazon without the same level of financial commitment required for a Professional Seller account.
Simplicity
Setting up an Individual Selling Plan is typically simpler and requires less documentation than a Professional Seller account.
Pay-Per-Item Fees
Individual Sellers pay fees on a per-item basis when their products are sold. This fee structure can be cost-effective for those who sell infrequently or in small quantities.
Personal Use
Individual Sellers often use their accounts to sell items. It's a convenient way to declutter and make some extra money.
Minimal Ongoing Commitment
Individual Sellers can easily close their accounts or stop selling on Amazon without the need to meet any subscription obligations. This flexibility is useful for those who might want to sell occasionally without a long-term commitment.
Opportunity to Test the Waters
If you're new to selling on Amazon and want to test your product or business idea before committing to a Professional Seller account, starting as an Individual Seller can be a good way to gauge market demand and learn the ropes.
Cons of Using an Individual Selling Account
Apart from the fees, there are other essential factors that you should consider before choosing an individual seller account:
Buy Box Ineligibility
Individual sellers are not eligible for the Buy Box, which is where the majority of sales occur. However, if you utilize FBA (Fulfillment by Amazon), you can still have access to the Buy Box. If you are interested in winning the buy box, read our previous article about it.
Restricted Categories
Applying to sell in restricted categories on Amazon is not possible with an individual seller account.
Limited Access to other services
Individual Sellers have restricted access to advanced seller tools and features available to Professional Sellers, which can hinder business growth and optimization. You cannot utilize 3rd party services like Repricers and Scoutify.
The $0.99 that you have to pay for every sale you make
Although it may seem insignificant initially, over time, this fee can accumulate and have an impact on your profit.
Less Credibility
Some buyers may prefer purchasing from Professional Sellers due to the perception of higher credibility, potentially impacting sales for Individual Seller's brands.
Lack of Branding
Professional Sellers have the advantage of creating brands, while Individual Sellers typically use personal information, potentially making their business seem less professional.
What is a Professional Seller on Amazon?
Once your Amazon selling journey has grown beyond the limitations of an individual seller account, upgrading to a professional account becomes the logical choice. With expanded services and features, this account type opens up greater opportunities for success.
I highly recommend that all new sellers sign up for the Professional Seller account on Amazon. Making the leap to this account type shows a commitment to your business and encourages you to strive for the monthly threshold of 40 items.
While maintaining a professional account comes with a monthly cost of $39.99, benefits and potential profits can offset the amount it provides. Consider it as an investment in your Amazon business. It's important to note that you can upgrade your account. If you're uncertain about the number of items you'll initially list, there's no pressure to upgrade immediately. However, setting the goal of reaching the 40-products-per-month threshold is advisable
Later in this article, we will discuss this quick overview.
Cost Savings
Bulk Item Uploads:
Access to other services
Eligibility for the Buy Box
Ability to Sell in Restricted Categories
How to get Ungated on Restricted Categories
Creation of New Product Listings
Enhanced Seller Reports
Benefits of using a Professional Seller Account
Cost Savings
Selling more than 40 items per month on Amazon brings about cost savings of $0.99 per item sold. This unique advantage allows your cost to decrease as your sales volume increases. In the business world, it's rare to find a scenario where fees decrease as your sales grow. Embracing this opportunity can impact your profitability and set you apart from conventional business models.
Bulk Item Uploads
You can utilize spreadsheets to upload multiple items at once through Seller Central.
Access to other services
Listing multiple items individually can be a tedious process, especially with being a tedious process, especially with an individual account. Services such as Inventory Lab offer invaluable assistance in improving your work efficiency. By enabling features like label printing and batch listing of products, they eliminate the need for manual entry of each listing individually. This gift of automation saves you precious time and effort, particularly in scenarios where manual input is typically required. Embracing such services can significantly enhance your productivity and streamline your operations on Amazon.
Eligibility for the Buy Box
Securing a place in the Buy Box is crucial for maximizing sales and reaching customers effectively on Amazon. However, only professional sellers have the opportunity to win the Buy Box. If you aspire to boost your sales and establish a strong presence among customers, obtaining a professional account is a prerequisite. By upgrading to a professional seller account, you gain the eligibility to compete for the Buy Box, a prime location where the majority of sales occur. Positioning yourself in the Buy Box becomes an essential step in achieving success and maximizing your revenue on Amazon.
Ability to Sell in Restricted Categories
On Amazon, certain sub-categories are restricted, including topical, groceries, and toys during the holiday season. If you wish to apply for selling these items, having a Professional Seller account is essential. It grants you the eligibility and opportunity to expand your product offerings and apply for selling in these restricted categories. Choosing a professional account opens up new possibilities for your business and allows you to tap into fruitful markets on Amazon.
How to get Ungated on Restricted Categories
For a comprehensive guide to successfully getting ungated in restricted categories on Amazon, we invite you to explore our detailed guide.
Creation of New Product Listings
Remember that creating effective product listings with accurate information, appealing images, and competitive pricing is essential for attracting customers and achieving success as an Amazon seller. You can create new product detail pages for unique items.
Enhanced Seller Reports
You can acquire access to more comprehensive seller reports, providing valuable insights for your business.
Cons of using a Professional Seller Account
Using a Professional Seller Account on Amazon comes with a few downsides. Firstly, there's a monthly subscription fee, which might not be suitable for small businesses or occasional sellers. Additionally, managing a Professional Account can be more complex due to the advanced tools and features, which could be overwhelming for beginners. Lastly, while per-item selling fees are lower, they can still add up, affecting your profitability, especially if you have a high volume of sales. It's crucial to weigh these cons against the benefits before deciding which type of account is right for you.
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Which is better?
The choice between an Individual Seller Account and a Professional Seller Account on Amazon depends on your sales volume and business goals. If you're a casual or occasional seller with low sales volume, the simplicity of an Individual Account without a monthly fee may be sufficient.
However, if you're serious about e-commerce, plan to sell a significant volume of products, want access to advanced seller tools, aim to build a brand presence, or intend to sell in restricted categories, a Professional Account is the better choice. Multiple sellers choose it. It offers cost savings for high-volume sellers and a broader range of features to support business growth. Ultimately, your decision should align with your specific business needs and long-term aspirations.
Things to Consider Before Choosing an Amazon Seller Account
Making a decision regarding the choice of a seller plan can be challenging, especially when cost-saving is a priority. To facilitate your decision-making process, consider the following question that will assist you in reaching a final determination.
Do you want access to promotional tools?
Professional sellers have the advantage of accessing Amazon's advertising tools, such as sponsored ads and pay-per-click marketing. These powerful tools can significantly enhance your reach and increase conversions. If you aspire to leverage these advanced marketing capabilities, I highly recommend opting for the professional seller plan. It grants you access to these valuable tools, allowing you to promote your products effectively and optimize your sales on Amazon.
Are you going to sell 40 products a month?
If your intention is to run your Amazon business on a full-time basis, it is highly probable that you will exceed the threshold of selling 40 products per month. However, if you view it as a part-time side hustle, you may not reach that sales volume. In such cases, a professional seller plan is an ideal choice for those aiming to sell more than 40 items in a month. Consider your business goals and selling aspirations when determining the most suitable plan for your Amazon venture.
Do you want to sell in restricted product categories?
One of the significant advantages of utilizing a professional seller account is the expanded access to product categories. With a professional account, you can sell in 10 additional product categories that are typically off-limits for individual sellers. This opens up new opportunities for your business and complements the existing product categories that individual sellers can also sell in. Embracing a professional account allows you to diversify your product offerings and explore a broader range of market segments on Amazon.
Consider Your Budget
Consider your budget and whether you can afford the monthly subscription fee associated with a seller account. Factor in all fees, including referral and fulfillment fees.
Can you upgrade from an Individual Seller Account to Professional Seller Account?
Certainly! Amazon provides sellers with the flexibility to switch between professional and individual selling plans as per their requirements. However, it's important to note that the monthly fee of $39.99 associated with the professional selling plan is non-refundable and will not be reimbursed in case you decide to switch to an individual selling plan.
Have you made a decision regarding your Amazon Seller Account?
Choosing the greatest seller account on Amazon is an important step for your company in 2023. You may make an informed decision that coincides with your goals and selling aspirations by comparing the benefits and drawbacks of both individual and professional seller accounts. Consider issues such as cost implications, access to advanced features, eligibility for limited categories, ability to compete for the Buy Box, and general scalability whether you are just getting started, testing the waters, or striving for significant growth. Remember that your seller account serves as the basis for your Amazon FBA journey, so make an informed decision and place yourself on a route to success in the thriving e-commerce environment.
If you have reached a decision and are ready to create your Amazon seller account, we have a comprehensive step-by-step guide available for you to explore. This guide will provide you with detailed instructions to help you navigate the process successfully. Feel free to check it out and gain further knowledge on establishing your Amazon seller account.