When you are first starting an Amazon FBA business, you will be immediately confronted with a few choices that you must make. One of the first choices you need to make is whether or not to become an individual seller or a professional seller on Amazon.
There are advantages and disadvantages depending on which Amazon seller account type you choose so let’s go over the differences.
This information should enable you to do a cost-benefit analysis so that you can decide which account to use from the start. If you need help walking through the process of setting up your seller account, we cover that in our Amazon Starter Course.
What Does Individual Seller Versus Professional Seller Mean?
You have two choices of how you want to set up your Amazon Seller account; you can be an Individual Seller or a Professional Seller.
Amazon does give some benefits to professional sellers over individual sellers, which is why there is a monthly fee associated with the account.
One thing to remember is that no matter which account type you choose, you are still be starting a business.
In the Amazon Boot Camp, we go over a lot of the things you need to consider when starting a business. Without getting too off track, a couple of things to consider when starting a business is getting a separate checking account, saving all of your receipts & tracking mileage.
Individual Seller Account On Amazon
The individual seller account is best for someone who is just wanting to sell a few items on Amazon, or is just “testing the waters.”
Some of the things to note about the individual seller account are that although you will not have to pay a monthly subscription fee, you will have to pay an additional $.99 per item fee on every item sold. This is on top of the referral fees & variable closing fees that both account types get charged.
So, right off the bat, if you plan to sell more than 40 items per month, you would be better off to sign up for the professional seller account. Aside from the fees that you pay, there are some other significant factors to consider before signing up for an individual seller account.
- You can NOT use 3rd party services like Inventory Lab, Scoutify or Repricers
- You can NOT apply to sell in restricted categories on Amazon
- You are NOT eligible for the Buy Box (this is where the majority of sales happen) – The caveat here is that if you use FBA, you will still get the buy box!
For both types of accounts, listing products is free; you only pay fees when the items sell.
Professional Seller Account On Amazon
The Professional Seller account is the one that I recommend ALL new sellers sign up for. I feel like when you take the step of getting the professional account, you will take this business a lot more serious and will try to meet that 40 item per month threshold.
The cost to have a Professional Seller account is $39.99 per month and is charged at the time of creating your professional account.
Remember, on this account, the $.99/per item fee that is charged to individual sellers.
There are some major benefits to having the Professional Seller account. I’ll list some of them quickly below and then go into more detail further into the post about the positives of each of these things.
- You can use a spreadsheet to upload multiple items at one time through seller central
- You can use 3rd party services like Inventory Lab, Scoutify & Repricers
- You have access to more seller reports
- You are eligible for the Buy Box (this is where the majority of sales happen)
- You can apply to sell in restricted categories
- You can create new product listing pages
It’s important to keep in mind that you can upgrade your account whenever you want to. If you’re not sure how many items you’ll be listing when you first get started, there may be no way you are going to sell more than 40 products a month.
We don’t want you to feel pressured to upgrade right away, but you should make it your goal.
Here is a chart Amazon has created to show the differences side by side:
You can upgrade/downgrade your account at any time.
Being Professional Can Keep You Motivated
When you consider the savings involved, along with the extra features of the pro account, you’ll be super motivated to list as many products as you can. Why?
Because the more you sell, the more your incremental costs go down. You can sell 500 products and still be charged the same fee. It only takes selling 40 items a month to “break even” on the professional seller fee, and everything on top of that is like a bonus.
Is 40 Really THAT Many Items Per Month?
Selling 40 items each month isn’t hard to do on Amazon, especially when using the FBA program.
We like to teach new sellers that they should start small, always buying 2-3 of any items to test the water. If you stick with that theory, finding just 15-20 items in a given month will put you over the 40 items needed to make up your professional seller fee.
Digging Deeper Into The Professional Seller Account Benefits
I’m sure you can tell by the tone of this article that I think you should become a professional seller if you are serious about being in business for yourself. There are too many benefits not to. If you’re not convinced here are a few more reasons to become a professional seller on Amazon.
- Cost Savings — If you sell more than 40 items a month, you save money 99 cents per item that sells. That means that the more you sell each month, the lower your costs are. This is a rare gift in the business world where typically your fees go up the more you sell.
- Ability to Upload Listings Using 3rd Party Services — When you are listing multiple items it can become very tedious to have to do only one at a time which is how it works with the individual account. If you plan to list a lot of items, using a service like Inventory Lab you will be able to batch list your products and print your labels on demand. This alone will save you a ton of time and how much is your time worth?
- Ability to Apply for Restricted Categories – There are several sub-categories on Amazon that are restricted such as topicals, groceries and even toys during the holidays. So, if you want to apply to sell these items, it’s important to get a professional account. You can view the full list of restricted categories here.
- Ability to Win the Buy Box – One of the best ways to blow through your inventory is to win the buy box. You can’t do it if you aren’t a professional seller. If you’re selling an unusually hot item, you want to win the buy box so that you can sell out fast. *The exception is if you are an FBA seller!*
As you see, there are some serious differences between a professional seller and an individual seller on Amazon that you should consider when starting your FBA business.
But, the benefits of choosing to become a professional seller far outweigh the potential downsides.
What are your thoughts on having a professional amazon seller account versus an individual account? Do you feel like you take your business more serious if you have the professional account?