A common question I get asked from new sellers, is about what type of Amazon seller account they should setup. Specifically, they ask if they should setup an individual seller account or a professional seller account.
Each type of selling account has its respective benefits, and it really depends on your specific needs. To figure out what type of Amazon seller account you need, let’s start by looking at how Amazon describes each account type:
The Amazon Individual Seller Account
Here’s how Amazon describes the individual seller account option:
“The Individual selling plan is for sellers who don’t need access to inventory tools and reports for volume selling. Under the Individual selling plan, you don’t pay a monthly subscription fee. You pay a per-item fee in addition to applicable fees.”
The Amazon Professional Seller Account
Here’s how Amazon describes the professional seller account option:
“In the Professional selling plan, you pay a nonrefundable monthly subscription fee regardless of whether you list or sell anything. You don’t pay a per-item fee when an item sells. All other fees are charged as applicable. The Professional selling plan gives you access to inventory tools to upload batch files and manage your orders through feeds and reports. These tools are beneficial to most medium- to large-size businesses.”
Key Differences between the Amazon Individual Seller Account and the Amazon Professional Seller Account
Below is a chart that shows the key differences between the 2 account types:
The above chart is directly from Amazon, and does a nice job of comparing the two account types. That said, there’s a lot here, and it’s important to drill down to the details that are most important:
- The Amazon professional seller fee rings in at $39.99 per month. However, that $39.99 monthly fee removes the individual seller fee of $0.99 per item. So, if you are selling more than 40 items it almost always makes sense to get the professional seller account.
- Only Amazon professional sellers are eligible to have their items featured in the “buy box.” The buy box is the featured seller on a listing within Amazon. For example, on this listing “Windy Castle Gift Shop” is the seller in the buy box:
This means that if the seller clicks the “add to cart” or “buy now” buttons (red arrow), they will be purchasing from Windy Castle Gift Shop, as they are the seller in the buy box. If you are selling this item and are not in the buy box, you will show up as one of the sellers featured below the buy box, or in the list where it says used & new (37) by the blue arrow. As you can see if you aren’t in the buy box it’s a bit more difficult for customers to buy from you.
- Only professional seller accounts have the ability to have sales tax collected on items they sell. Sales tax for FBA sellers is a bit of a tricky issue, but if you want to collect sales tax you need the professional seller account.
- Amazon requires an additional level of approval to sell in certain categories on the platform. Below are examples of categories that require you to have a professional seller account to seek approval:
- Automotive & Powersports
- Sports Collectibles
- Video, DVD, & Blu-ray
- Collectible Coins
- Entertainment Collectibles
- Fine Art
- The final major difference that I will point out is the ability to use product data feeds, and granting access to other users. These features are only available on the professional selling plan. If you want to use 3rd party apps and tools, then you will need a professional seller account. In my case, the tools that I use to help run my business require me to be signed up through a professional seller account.
Which Amazon seller account type is best for you?
The individual Amazon seller account is best for someone who:
- Wants to get their feet wet selling on Amazon and keep costs as low as possible at the beginning
- Is selling less than 40 items per month
- Doesn’t have the need for the additional features of the professional seller account.
The professional seller account is best for:
- Any sellers selling over 40 items per month
- Any seller wanting to collect sales tax on their items
- Any sellers who want to use 3rd party apps and tools
- Sellers who want to be displayed in the buy box
- Sellers who want to sell in certain restricted categories
Can I start off as an individual seller account and then switch to a professional seller account later?
Yes you can switch at any time you would like.
This is the route I took when I first started selling on Amazon. When I was doing it part-time as a hobby I used an individual seller account. Then, once I was selling over 40 items per month, I upgraded to the professional seller account.
Here’s how to upgrade your Amazon seller account:
- Login to your Amazon Seller Account
- Scroll to the bottom of the page and click Account Info under Settings
- In the Your Services section click Manage
- Click Upgrade next to the account type
Note: If you want to switch from a professional seller account to an individual seller account, steps 1 to 3 are the same, and in step 4 click downgrade.
This post walks through the main decision factors that I would look at when determining which account type is right for you. If you are in doubt as to which option is right for you, and you are selling less than 40 items per month, I’d start off with the individual seller account. Then, once you are selling 40 items per month or need additional features, upgrade to the professional seller account.
Want to learn more about getting started selling on Amazon? Here’s a general overview of my recommendations for getting started selling on Amazon.
You can also take my free email course where I share some of the tips I’ve learned from operating my own multi-million dollar business to help you get your first sale on Amazon.