As an Amazon seller, you can have different types of seller accounts, each with its own advantages and disadvantages. One of the most important decisions you'll make as an Amazon seller is choosing which type of account to set up. These different accounts come with specific features and limitations. So you might wanna know the difference between Amazon Individual and Professional Seller Account. Here's the answer!
If you're unsure which kind of account is right for you, read on to find out more. If you sell on Amazon often or plan on doing so in the future, it's a good idea to set up an Amazon seller account right away.
These two different types of seller accounts offer different features and limitations that may impact your selling success. Here's what you need to know about the differences between an Amazon Individual Vs. Professional Seller Account.
Key Differences Between Individual & Professional Amazon Seller Accounts
There are quite a few differences between an individual and a professional Amazon seller account. The major differences between an individual and professional account are the following:
Tax Status: Individual accounts are taxed as a “small business,” while professional accounts are taxed as a “medium or large business.” The amount of sales tax collected and paid varies based on the state in which you operate, in addition to the Amazon policies that one has to look after.
Payment Terms: The payment methods might differ to some extent if you get along with any of the accounts; you can take a closer look at that depending upon your country, policies and everything.
Seller Performance: Your account may be suspended or terminated at any time if you don't meet Amazon's seller performance standards with an individual account. You must meet Amazon's seller performance standards with a professional account.
What is an Individual Seller Account?
An individual Amazon seller account is an account set up by a private person for their own use. Individual accounts provide fewer features than professional accounts, and you must pay Amazon sales taxes (where applicable).
The main features of an individual seller account are:
- Multiple shipping addresses – You may ship to any address under your name, but you are responsible for taxes and customs fees if your items are shipped outside the U.S.
- Seller performance – Your account may be suspended or terminated at any time if you don't meet Amazon's seller performance standards.
- Amazon Charges – Well, if you are someone who has opted for the individual plan, you have to pay an item fee of $0.99 for every sale that you make. You can do the math and work accordingly on whether the plan is suitable for you or not?
What is a Professional Seller Account?
A professional seller account is an account set up by a third-party seller for the purpose of meeting Amazon's requirements for listing, managing, and fulfilling a seller's products. This type of seller account must be set up by a legal business entity. Professional accounts provide more features than individual accounts and allow you to collect sales tax on your own and manage it. The main features of a professional seller account are:
- Multiple shipping addresses – You may ship to any address under your name, but you are responsible for taxes and customs fees if your items are shipped outside the U.S.
- Payment terms – You may set your own payment terms for people who purchase goods from you.
- Seller performance – Your account may be suspended or terminated at any time if you don't meet Amazon's seller performance standards.
- Amazon Charges – Well, one of the things that play quite an important role is the charges that one has to pay for your Amazon sellers account; the professional Amazon sellers account costs around $39.99/month, which makes the cost $0.99/sale get excluded. This way, you can make better profits if you sell more than 40 items per month. You might be able to relate to the pricing depending upon your sales and everything.
There is one more interesting feature that the professional account offers based on a store’s performance. In the next section we will take a look at Buy Box
What is a Buy Box and what difference does it make?
The Buy Box is a most wanted feature that appears on listings. The Buy Box has ‘Buy Now’ and ‘Add to Cart’ buttons in it. The benefit of this is that it makes easier for customers to add or buy the product. Professional sellers may be eligible for Buy Box based on their performance and competitive pricing.
Individual sellers are not eligible for Buy Box because as per Amazon’s rules, a seller must have a professional seller account to be able to ship orders to customers quickly and reliably to maintain a high level of customer service and have good performance metrics like low cancellation rates and high rate of on-time delivery. Only sellers that can meet these conditions are given access to the Buy Box.
Is it Possible to Switch from an Individual Seller Account to a Professional Seller Account?
Many of you might have these questions, and the simple answer is YES! You can switch at any time as per your wish.
Many Sellers who are beginners or the ones who start it as a hobby use the individual seller account. And as they are selling over 40 items per month, they can upgrade to the professional seller account.
You can easily follow the below-mentioned steps to do it:
1.First, log in to your Amazon Seller Account.
2.Head right bottom to the page and click on “Account Info,” which you can find under the settings
3.In the Your Services section, click on “Manage.”
4.And there, you can “upgrade” next to the account type.
What if you want to switch from a professional seller account to an individual seller account?
Well, you can easily follow Steps 1 to 3, and in Step 4, Click on “Downgrade.”
Amazon Individual Vs. Professional Seller Account Pros and Cons
Pros of having an Individual Seller Account
Individual accounts are beneficial if you plan to sell a small number of items. You may also want to start off with an individual account as a way to test out selling on Amazon. Individual accounts are also helpful if you plan to sell items that you don't want Amazon to hold in their warehouse. So it can be said that you can get along with the individual seller account if you have limited sales, or we can say less than 40.
The reason why I'm going on with the number of 40 is due to the charge that one has to pay for every sale that is made, for every sale being made under the individual seller account, there is a flat fee of $0.99/sale.
Cons of having an Individual Seller Account
One of the major drawbacks that one has to encounter in the individual seller account is the fee per item sold. If you have an individual seller account on Amazon, you might have to pay an amount of $0.99/item sold. In addition to that, you might not get access to some of the professional tools/ features offered in the professional plan.
In addition to all this, as an individual seller, it can be said that you might get along with some restricted categories, and these categories include: personal and health care products (approval and certification needed), beauty products, gourmet and food products, automotive parts, tools and related accessories/equipment.
Individual accounts do not get access to major feature like the Buy Box that can add to the sales of the product (unless you use FBA). In addition to that with an individual account you cannot use third party apps and services,
Pros of having a Professional Seller Account
A professional seller account is ideal for people who plan to sell a large number of items. These accounts allow you to collect sales tax from your customers and manage it yourself. Professional accounts are also beneficial if you want your items to be held in Amazon's warehouse. In addition to all this, it is worth mentioning that you can get along with the Professional seller account if you have sales of more than 40 in a month. You can also get along with some extra tools such as Amazon advertising, bulk listing, and other major benefits.
Only Professional Seller Account holders have the chance to make their products feature in the “Buy Box.”
If you have to collect Sales Tax on the items you sell, you need a professional seller account. Though the Sales Tax for FBA sellers has always been a tricky concept, to move ahead with it, a professional seller account is a must!
Amazon has restricted sellers to sell in a few categories. And only professional seller accounts are eligible to sell in those. Below are the mentioned categories:
- Business to Business (B2B) products
- Jewelry
- Sports Collectibles
- Collectible Coins
- Grocery, Food & Gourmet
- Fine Art
- Entertainment Collectibles
- Automotive & Powersports
- Watches
- Video, DVD, & Blu-ray
If Sellers have to use product data feeds and grant access to other users, you do require a professional seller account. Also, if you want to use third-party apps and tools, you have to choose this type of account.
The professional account is cost effective. When you sell more with a professional account, your cost decreases. To break even you need to sell just 40 products each month and the rest is extra cash. In other businesses, as you sell more, you encounter more costs. It might seem hard to sell 40 items in a month but it can be done with comparative ease for FBA users. As a professional Amazon seller you also get access to third party services that can help you to launch multiple products like repricers, email autoresponders, PPC tools and more.
You can also print labels for your brand using on demand inventory service. This helps to save time when launching more products. With the professional account you even have access to review and feedback tools. For Professional sellers on Amazon there are amazing benefits like, you get access to restricted product categories. As a professional Amazon seller you can create new accounts for inventories.
Professional selling give you access to sponsored products that allows you to attract more potential consumers. Professional sellers get access to CPC sponsored products which means they can control the daily budget, keywords, and place ads automatically to increase the visibility of your product. With a professional seller account you get access to information to manage inventory and order information that can help you improve your sales.
Cons of having a Professional Seller Account
One of the major drawbacks that one has to encounter is the monthly subscription fee; as an Amazon seller with less than 40 sales a month, getting along with the professional seller account can be a matter of loss, as the charge in an individual plan is around $0.99/item sold. In addition to all that, as an Amazon seller with a professional seller account, you might be entitled to some tax rules and regulations depending upon the state tax laws and policies.
It can be said that if you sell less than 40 items per month, getting along with the professional seller account can be a downfall, not a major one, but it can be one.
How to Become a Seller on Amazon?
Now that you have seen the advantages and disadvantages of both individual and professional seller accounts on Amazon, let’s see how you can start your journey as a seller on Amazon in a few easy steps:
1.Create an Amazon account by selecting the account type, Creating the sellers account and creating a seller profile.
2.Create a list of items you wish to sell
3.Find the products you want to sell on Amazon
4.Add new items to sell on the website
5.Sell items on Amazon
6.Ship your items yourself by selecting Self-Shipping or choose Amazon Fulfillment.
7.Your account is now set up and you will get payment every time someone buys your product. You can also offer a gifting service where customers pay for gift wrapping separately
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How to Choose an Amazon Seller Account? – Easy Decision Maker!
We have made an easy guide for you that will remove all the confusion related to choosing an Amazon seller account.
Individual Seller Accounts: If you are new and just beginning your Amazon selling journey, of course, you are going to get this type of account. Also, if you are selling less than 40 products, you should choose this type of account. Also, if you don't require any additional features, blindly go ahead with this type of account. You get limited features with the individual sellers account. Additionally you pay $0.99 for each item you sell. Unlike the professional account you cannot provide gift or promotional features for your product. With an individual account you cannot set your own shipping costs for products.
Professional Seller Account: If you are selling more than 40 products and wish to collect sales tax, go for this type of selling account. For sellers to want to use third-party apps and want to get their products displayed in the “Buy Box” along with selling in restricted categories, you should choose Professional Seller Account.
Is it possible to have multiple Amazon seller Accounts?
Yes, it is possible to have multiple seller accounts. You can have multiple accounts if you have a legitimate reason like you have multiple brands, both accounts are for separate businesses, you sell different products on different accounts and if you have a product manufacturing facility in line. Amazon gives you authorization to open a separate account in all these cases.
Amazon Individual Vs. Professional Seller Account FAQs
What does it mean to be an Individual Seller on Amazon?
Amazon sellers can be divided into two categories, one is for the individual sellers, and the other one is for the professional sellers. Basically, the professional plan has a monthly subscription fee of $39.99, whereas the individual seller plan has a charge for an item sold which is around $0.99/item sold. So, getting along with the pro plan is much more recommended if you sell more than 40 items a month.
Do I need a business license to sell on Amazon?
No, basically, you don't require a business to sell products on Amazon; well, all this is possible since most of the products listed on Amazon are consumer products and do not require any government approval.
Can I switch from Individual to Professional Seller Accounts on Amazon?
Yes, you can switch from the individual to a professional seller's account. Still, it is worth mentioning that you must pay the subscription fee of $39.99/month if you opted for the professional seller's account. In addition to that, Amazon might require some additional information for taxes, etc. It is recommended to check out if any details are needed.
Can I have 2 Amazon seller accounts?
As per Amazon: The Selling Partners with legitimate business needs can operate multiple Selling Accounts and do not require Amazon's approval. However, opening too many accounts will eventually be looked at unfavorably by Amazon should they find out. Hence, it's best to keep this as an internal secret and a professional move if anyone chooses to expand their empire by opening additional accounts while managing existing ones effectively.
What is Amazon FBA?
Fulfillment by Amazon (FBA) is an Amazon-owned business that specializes in handling the order fulfillment process. They apply their expertise to your business, so you don't have to worry about all the tedious details! FBA pick, pack and ship the goods that your customers order.
What is the difference between Amazon FBA and Amazon Seller?
Let's make it simple, Amazon FBM sellers have to store their own products and have to handle customer service for their Amazon sales. At the same time, Sellers who use FBA choose Amazon in order to store and also ship their products and then Amazon handles the customer service on their behalf.
Conclusion: Amazon Individual Vs. Professional Seller Account
Amazon is the world's largest marketplace, with over 100 million customers. Because of this, it is the perfect place to sell your products or services. You can set up an Amazon seller account in a matter of minutes and begin selling right away. Individual and professional Amazon seller accounts offer different features and limitations that may impact your selling success. While there are some differences between these two types of accounts, they both provide a great opportunity to sell your products or services to millions of customers.
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As a bottom line, it can be said that getting along with the professional selling plan can be of more advantage for Amazon sellers. Where the individual selling plan does not take any subscription charges but takes only an item fee of $0.99/item sold, whereas the professional plan takes a monthly subscription fee of $39.99/month, so just in case you sell more than 40 items a month getting along with the professional plan can be a better choice to move with.
