Amazon is a well known online retailer and selling on the platform takes your product and puts it into the households of millions of people.
Customers can buy your product in just a few clicks and have it at their door in a matter of hours.
This is an amazing opportunity as an Amazon seller, but it does come with a cost. Selling on Amazon has a cost and it is not free.
I mean they did all the work of building one of the most trusted e-commerce stores in the world. If they give you access to their customer base, you can expect to pay a little for that access.
When you decide to sell on Amazon, one of the first choices you will need to make if you are just starting out is choosing to be an Amazon individual seller vs professional seller.
We will break down all the details so you can get to making money & selling on Amazon.
Major Differences Between Amazon Individual Vs. Professional Seller Accounts
To be honest, the difference between the two accounts is simple:
Individual accounts cost nothing to open, but charge $0.99 for every item sold.
Professional accounts cost $39.99 up front, but do not charge the $0.99 fee every time an item is sold. (Read on to see how you win the buy box)
When you sell on Amazon, there are some other expenses which include Amazon referral fees and other extra charges.
These charges depend on the product category and are applicable to either an individual seller account or professional Amazon seller account.
Simple math tells us to choose the professional account if you plan on selling over 40 items per month. But it’s not always that easy.
Even if you sell less than 40 items per month, a professional account might be worth getting if you plan on using a tool like Tactical Arbitrage (which requires a professional plan to be able to access the data provided by Amazon).
Amazon Individual Seller Account
An Amazon Individual Seller Account can be opened by any person who wants to sell on Amazon. Whether for business, fun, or any other reason, you can open an individual account free of charge without any monthly fees.
However, there are also no special marketing tools on the plan and you may have to do a ton of manual product listing tasks, inventory management, and miss out on some important reporting features.
Basically – It’s the bare bones way to get your product on Amazon.
With this plan, Amazon mandates individual sellers to pay a $0.99 fee on every sale. This is to compensate the platform for not charging any monthly expenses for your seller account.
Amazon Professional Seller Account
Amazon Professional Seller Account can be opened by an individual or organization, but it is accompanied by a monthly fee of $39.99.
Users of this professional selling plan will benefit from the fact that they won’t have to pay the extra charges of $0.99 per item fee. The takeaway from this is if you plan on selling at least 40 items each month, then it makes sense to upgrade to the professional selling plan.
In addition to not paying charges on unit sales, professional sellers also have access to various marketing and management tools.
Amazon provides them with tools to enlist multiple products easily, manage stock, oversee orders, and get reports more conveniently and efficiently.
Plus, there are some item categories on Amazon that only professional sellers are granted authorization to sell.
Amazon Individual Vs. Professional Selling Account (Tools and Features Comparison)
If you register a professional seller account, you will have access to various marketing tools that can assist you in managing your business, launch advertising campaigns, list products faster, and have access to some amazing data through Amazon’s API.
This includes API functions that Tactical Arbitrage uses to give you all the juicy online arbitrage items to source.
These tools are not accessible to individual seller account holders. This is due to the fact that the API is not open for individual sellers. That’s why some low volume sellers still choose to pay for the professional plan.
The professional sellers can also advertise through the PPC (pay-per-click) model on Amazon while individual sellers must change to the professional seller plan before they can advertise their items on the platform.
Professional account users can also grant access to other users to use their accounts, but only one user is allowed in an individual seller account plan.
Amazon Individual Seller Vs. Professional Selling Plans (Shipping and Tax Comparison)
Amazon professional sellers are permitted to manage their shipping themselves and set shipping rates, except for some selected products called BMVD (Books, Music, Video, DVD).
Amazon usually set the shipping rate for individual seller account holders in all categories of products.
Also, professional sellers can figure out US sales tax on their orders while individual sellers are not offered access to this feature.
Amazon Individual Vs. Professional Selling Plans (Category Eligibility Comparison)
There are about 30 product categories on Amazon. While 20 of these categories are open for all sellers to enlist their items, you will need permission from Amazon before you can sell in the remaining 10 categories.
These sections include Automobile Parts and Accessories, Video, DVD, Watches, Fine Art, Groceries, and Collectible coins.
Not surprisingly, only professional sellers are allowed to request permission and sell in these segments. Individual sellers miss out on the opportunity to sell these products.
Can I Switch From One Plan to the Other?
Yes, you can always switch to either plan on Amazon. It is quite simple and it will take effect immediately. If your business is growing and you realize that you make more than 40 sales per month, you should change from an individual seller plan to a professional seller plan.
I recommend starting with the individual plan to get started and then switching over once you start to see sales.
Also, if you need to take a break for quite a while and you don’t wish to close your account yet, you should simply change back to an individual account to avoid monthly charges.
I have done this before and it saved me the $39.99 per month charge.
You can switch from a professional seller account to an individual account if you realize that you are not making as many sales as you expect and you don’t necessarily need the tools and other features of the professional account.
If you are switching from an individual seller account to a professional seller account, there is no issue. You just need to pay $39.99 for your new plan and it will become effective.
However, if you are switching from a professional seller plan to an individual seller plan, ensure you do so on the day your plan payment will expire.
This will allow you to maximize your benefit from the professional plan as long as you can. I suggest setting a calendar appointment to help you remember when you get billed.
Basically, you have already paid for a 30-day plan and switching before your 30-day subscription elapses would mean you will be charged for all sales you make as an individual seller while you actually have a plan that would have saved you those charges.
So keep it until the last minute. Like your free trial of Netflix.
Why Being An Amazon Professional Seller Worth it?
If you realize you cannot make more than 40 product sales in a month, the only reason you may go for a professional account will be as a result of the tools and other special features attached to the professional seller plan.
Nonetheless, if you are sure of selling more than 40 products in a month, then a professional seller account is your most ideal alternative. It literally saves you money.
Otherwise, you will be paying more than $39.99 monthly and will still not benefit from the special features in the other plan nor make enough return on your investment.
Sellers with a Professional account are eligible to win the buy box. Individual or Basic Seller accounts are not eligible to win the buy box. You want to make more sales as an Amazon seller. Right?
A common question I get is: Is it easy to make 40 sales in a month?
Honestly – Yes. But it might take you a few months to get to the level. It also depends on the particular product you are selling and the number of competitors on a given listing.
If this sounds a little confusing, check out this article here if you need to find some info about Amazon sales velocity.
A few extra perks from being a professional seller:
- Amazon’s professional account plan will give you access to many tools that will make your marketing campaign easier.
- Being a professional seller will also enable you to easily use resourceful software like Tactical Arbitrage to increase your sales. This will help you find even more products to list and sell. More on this next.
What is Tactical Arbitrage and How Can it Help You?
Tactical Arbitrage is a software created to help Amazon sellers source items via online arbitrage. It also helps you sort through profitable products from your wholesale vendors.
Tactical Arbitrage will compare prices and help you make better selections by giving you the important data at your fingertips.
You can also customize the software for your specific information you need to make a purchasing decision.
You need an Amazon professional seller account in order to fully utilize Tactical Arbitrage. The reason is that it utilizes an API from Amazon to help give you the data you need.
Most of our users easily find enough items to sell 40 items a month to make it worth the small investment. Just make sure you have the professional account before you start your free trial.
Amazon offers two basic plans on its FBA seller program: Professional Seller Accounts and Individual Seller Accounts.
While professional sellers account users pay a monthly fee of $39.99, they do not pay extra charges on each sale. For most sellers, the professional account is a no-brainer.
Professional sellers have access to several tools that can be used to manage sales, manage inventory, upload products on the platform among many other offered services.
Professional sellers are also allowed to set the shipping rates of their products, calculate US sales, and apply tax on products. They are offered promotions for product sales and can also advertise on pay per click (PPC) model on Amazon.
While individual sellers are not charged any monthly fees, they are charged an extra $0.99 on every sale. They are denied access to many special tools that the professional sellers enjoy, and they are not allowed to set their shipping rates.
There are few reasons to not sign up for a professional plan on Amazon. I personally recommend all sellers start with an individual plan and quickly upgrade their account once items start selling.
If you are having trouble finding products, you might want to consider upgrading to a professional plan just for access to the API along.
Having a tool like Tactical Arbitrage will help you find more products than you can imagine and can get you above the 40 item threshold quickly.
Grab your free trial here.
Is Amazon Individual Seller Account Free?
Yes, you don’t pay any monthly fee for an individual account plan. However, Amazon will charge a fee of $0.99 for every sale on the individual seller plan.
In addition, you will still pay other general expenses like referral fees that Amazon charges on all sales on its platform irrespective of the seller plan.
Do I need to have a company to sell on Amazon?
No, you only need an email address to register a seller account with Amazon. You are good to go as long as you follow the Amazon seller guide and regulations.
Can I sell products on Amazon from home?
Absolutely yes. Amazon is an online platform that allows you to list your product on its platform from anywhere and sell.
This is made easier with the FBA fulfillment option where Amazon fulfills all orders on your behalf.