Every year almost one million new sellers join Amazon. They either sign up as individual or professional sellers. Interestingly, many of them eventually get inactive and never return to the platform.
Among many other reasons, not selecting the right type of seller account at the beginning also plays a part in why some people don't succeed at selling on Amazon. That is why it is essential to answer this question: should I open an Amazon individual or professional seller account?
This Amazon individual vs. professional account roundup will try to answer that question with all the caveats. Subsequently, you'll be able to make an informed decision regarding your seller account selection. Making the right decision at the right time can lead you to experience all the Amazon success you're aspiring for.
So, if you are considering opening an Amazon seller account and sitting on the fence, continue reading on.
Before dissecting the differences between Amazon individual and professional accounts, it is important to sift through what's common between them.
There is no difference between an individual or professional account when it comes to fulfilling the prerequisites to become an Amazon seller. Amazon has set out similar requirements for opening both individual and professional accounts. Some of their secondary details might change based on the marketplace (North America, Europe, Asia Pacific, etc).
You need to take care of these requirements whether you open an individual or seller account.
You can find the detailed registration requirements in line with every individual marketplace here.
If you have a valid phone number and an internationally chargeable credit card, you can open either individual or professional account from any of the 142 countries accepted for seller registration.
Amazon provides similar fulfillment methods to both individual and professional sellers. So it doesn't matter if you have signed up as either of them. You can take care of your orders either by Fulfillment by Merchant (FBM) or Fulfillment by Amazon (FBA).
You can see that the basics of opening both types of accounts are the same. But as they say, the devil is in the details. The difference between the two accounts pops up when we dive deep into their fine details.
Before discussing the salient differences between individual and professional Amazon seller accounts, let's look at the selling plans comparison chart Amazon has outlined.
Let's try to expand on the main differences that this chart draws around.
The starkest difference between the two seller accounts is their fee structures. Amazon individual seller account fee is based on the pay-as-you-go model, where you have to pay $0.99 on every sale. In other words, there is no fixed time-based fee for Amazon individual accounts. So if an individual seller hasn't made a sale in two months, they don't have to pay anything to Amazon for the given duration.
In contrast, a professional seller account has a subscription-based fee structure. You have to pay $39.99 every month to Amazon to use a professional seller account and its privileges irrespective of the number of sales you make.
Amazon has a standardized approval process when sellers want to sell products falling in particular niches and categories. This approval process might include past performance checks, proving product authenticity, and other measures. Once you get the approval, only then can you list and sell those products on the platform.
Only Amazon professional sellers can submit the approval requests to sell anything from the restricted categories. Amazon doesn't extend this privilege to those who sign up as individual sellers.
These are the product categories from which individual sellers can't list any item, and professional sellers will need prior approval.
Besides these product categories, individual sellers can't leverage these Amazon selling programs either. Only professional sellers are eligible to enroll in them.
A seller testing the waters first might not need to invest in promotions and advertising on Amazon. However, those who want to improve a good sales volume and velocity right from the start have to promote and advertise their listings.
They have to run PPC campaigns to make their listings visible for the targeted keywords. Besides sponsored ads, sellers also add discount coupons to their listings to improve their sales. However, only professional sellers can make the most of these promotional features available on Amazon.
Individual sellers can only make sales through manual promotion (sharing their product link to potential buyers) and organic search results (by taking care of Amazon SEO).
If you’re competing against other sellers while selling the same product, winning the buy box will ensure your survival. The Buy Box is a vertical triangular pane that opens on the right side of the product page. That is where customers add products to their carts. Winning a Buy Box for a particular product means Amazon has chosen you and your inventory among other sellers offering the same product to fulfill the relevant orders.
Winning the Buy Box depends on various factors (feedback garnered by a seller, product price, buyer's location). Also, only professional seller accounts are eligible to win it. An individual seller can't win a Buy Box no matter how competitive their price is and even if they have acquired good customer feedback.
Amazon Marketplace Web Service (MWS) is a blessing for sellers. It is essentially a collection of integrated web service APIs that lets you programmatically fiddle with data on listings, orders, payments, and reports. In other words, you can tie custom inventory, order, and reports management systems to the Seller Central through MWS.
Besides your own propriety programs, you can also use Amazon MWS to deploy 3rd party apps to manage inventory, orders, prices, etc. You can find all those 3rd party applications by category on a dedicated Amazon app store.
The use of Amazon MWS streamlines your operations and frees up your time. This leads to improved operational efficiency and better customer management. If you want to take advantage of this integrated API feature, you need a professional seller account. Amazon doesn't let its individual sellers use Marketplace Web Service and its multiple functionality-based sections (Feeds API, Finances API, Fulfillment Inventory API, etc).
Amazon Business Seller Program provides you an avenue from where you can reach out to business customers. There are various benefits of enrolling in the Amazon Business Seller Program. First of all, you can sell in bulk and at a lower referral fee.
Secondly, the program lets you improve your seller profile to the next level. You get to engage with big companies and brands. As a seller, you also get multiple listing and profile privileges that are exclusive to this program. You can leverage the success achieved on this special seller program and expand it outside of Amazon as well.
If you want to take your product to the B2B pedestal on Amazon, you need a professional account. Amazon doesn't allow individual sellers to use its Business Seller Program.
You can outsource the calculation of sales and use tax on the products procured from and shipped within the US to Amazon. However, you can only do that if you have opted for a professional seller plan. Individual sellers have to do their tax calculations on their own.
The above breakdown makes it clear which selling plan reigns supreme. However, a head-to-head comparison will make who wins the Amazon individual vs. professional account debate more obvious.
With the fee structure mentioned above, it is easy to conclude that you should sign up for a professional seller account if you have planned to sell more than 40 units a month. On the other hand, those experimenting with different listings and running trial-and-error sessions can stick to the individual plan. Also, people who just want to sell a product or two once in a while will find the price plan of the individual account more suitable.
Earning a considerable monthly income from Amazon requires selling more than 40 products a month. Therefore, a professional account is a must if you want to thrive as a seller and make it your main source of income.
When it comes to features available to sellers, the professional plan defeats the individual plan by a huge margin. As a professional seller, you can list restricted products, win Buy Box, promote your listings, leverage the B2B space, and streamline your operations through Amazon MWS.
Individual sellers are devoid of all these features. As a result, they can neither promote themselves nor have access to the useful API integrations of Amazon MWS.
The convenience of a seller plan is directly proportional to the number of features and benefits it offers. Since Amazon's professional seller account offers more perks and privileges through a list of features discussed above, using it entails more convenience than using an individual seller account.
You may think paying $40 overhead (the pro plan fee) is unnecessary in the first few months, where sales volume usually remains low. However, this overhead will quickly turn into a non-issue when you'll be selling hundreds or thousands of units per month while capitalizing on all the features a professional plan has to offer.
On the other hand, an individual seller account is not meant for a full-time selling venture. If you sell 300 units a month through an individual seller account, you will have to pay $300 to Amazon apart from referral fees. Paying such a huge amount without getting full features doesn't make any sense in any scheme of things.
Suppose you want to adopt selling on Amazon as a full-time gig and planning to launch one listing after another and making hundreds of monthly sales. In that case, a professional seller account will offer you unmatched utility as compared to an individual profile.
A professional seller account is undoubtedly a better option than an individual plan for most sellers. Nonetheless, the individual seller account also offers a list of benefits.
Making 35 sales over four months with a professional account doesn't hang together. You will have to pay Amazon around $160, and it doesn't include the referral and closing fees. An individual seller plan is a better option for such low-volume sales.
So, if you sell as a hobby where you only procure/make few items and don't hurry to get rid of them, an individual seller account is a better option for you than the professional plan.
Amazon private label and wholesale ventures involve big investments. It is better to get into them only when you're sure you can run a brand/business with the sales, advertising, and fulfillment peculiarities of Amazon. Starting with an individual account and a single listing can let you have that test run of how things work on Amazon.
If you want to learn how selling works on Amazon and then sell this expertise as a service, you can start with an individual seller account. You will get access to the seller dashboard and a number of seller forums that are the goldmines of exclusive and insiders' knowledge. You can get those accesses without paying a fixed fee of $39.99.
Let's sum up the benefits of a professional seller account before summing up the article.
A professional seller account doesn't put any cap on the monthly sales volume. So whether you sell in few dozens or hundreds of palettes, you will have to pay the same monthly subscription fee.
As a professional seller, you get access to all the API integrations of Amazon available through MWS. If used rightly, you can employ those professional-exclusive features to stand out among individual and professional sellers competing in the same field.
Selling a restricted product requires prior approval that involves vetting from Amazon. The strict approval process makes for less competition in those product categories. In other words, there are better sales and revenue prospects with a restricted product category. You can tap into those unsaturated restricted product markets if you have a professional seller account.
Promotions are a lifeline of any product or brand, irrespective of the platform. Every seller wants to make their product a hit among buyers and their private label a reliable brand of its niche. For that, you have to invest in their promotions heavily, which is only possible through a professional seller account.
Yes, you can upgrade your seller plan from individual to professional. Go on your Seller Central profile and follow these steps.
Setting > Account Info > Seller Account Information > Your Services > Manage > Upgrade > Proceed to Upgrade
You can have two different Amazon seller accounts if they list entirely different products and represent another brand. Similarly, bank account details, email addresses, and phone numbers should also be different.
The best way to open another account is to get permission from Amazon formally. Amazon will send you a questionnaire asking things like anticipated monthly sales volume, inventory source, availability status, list of other websites and retail locations, and how long you have been an Amazon seller.
If Amazon deems your answers satisfactory, it will allow you to open a second account.
You can call Amazon Individual seller account free because you don't have to pay any upfront fee. Also, there is no fixed recurrent amount to shell out. In short, you don't have to pay a dime to use an individual seller account so long as you don't make a sale.
No, you don't need any type of business license to sell on Amazon. As long as you have valid bank details and other personal information, you can start selling on Amazon.
In some cases, people don't get the option to open the individual seller account on Amazon. One hack to get around this issue is to open a professional account and then downgrade it immediately to the individual account. You'll have to pay the $39.99, but Amazon will refund you on the next disbursement date. Drop an email or make a phone call to seller support just to ensure you get the disbursement.
We hope that the above discussion has settled the Amazon individual vs. profession account debate for you. Amazon's professional seller plan is the only viable option when it comes to selling full-time on Amazon and making a good amount of money.
How can you make the most of all the features that you get with a professional account?
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