Selling on Amazon: Individual vs. Professional Selling Plans
- March 17, 2016 | Stephanie Faris
For businesses building a loyal following, Amazon can be a great resource. With a large built-in customer base, the site provides the perfect marketplace for new businesses. Sellers can get the customers they need to bring positive cash flow each month without spending a large amount of money on promotion and marketing.
While setting up a store on Amazon may be fairly easy, business owners will have a few decisions to make. Perhaps the biggest is whether to choose an individual or professional selling plan. As with most cloud-based business solutions, professional sellers pay a higher price for access to more extensive features, but not all new sellers will benefit from those features. This guide will help you decide on this important first step for business owners setting up an Amazon store.
Subscription vs. Pay as You Go
Individual sellers pay a $0.99 fee on every item that sells, while professional sellers pay a $39.99 monthly fee regardless of the number of items they sell. Basic math would tell most sellers that as long as they’re selling 40 items or more each month, $39.99 is the best plan. Unfortunately, many new sellers lack the experience to know exactly how many items they can expect to sell each month through the platform.
Moving from an individual to a professional plan is as simple as changing the plan under the seller’s account settings. Changes take effect immediately, with the seller charged $39.99 for the month and selling fees waived from that point forward. Since Amazon has made it so easy to switch, a new business might feel tempted to choose the pay-as-you-go plan to see how sales go in the first few months. However, there are a few features the individual plan is missing that might benefit a new business.
Professional plans come with the ability to upload multiple products at once using a spreadsheet. For new sellers, this feature can be a real time saver, allowing them to load all of their products onto the Amazon platform in minutes. An individual plan forces a seller to add each item individually, wait for those items to be matched against Amazon’s existing inventory, and create a listing for that item.
Amazon’s inventory feature may also help new businesses as they begin the fulfillment process. Whether they’re using Fulfillment by Amazon or filling orders on their own, businesses need to know how many products they have on hand at all times. While both plans provide this insight, professional plans include inventory-reporting features, which make inventory reconciliation easier. Professional plans also include general reporting, which can be essential to a new seller interested in learning how customers interact with their products.
Individual plans will be limited to certain selling categories. Only professional sellers can sell in these categories:
- Automotive parts, tools, equipment, and accessories
- Beauty products
- Clothing and accessories
- Collectible coins
- Collectibles (books, entertainment, historical and advertising, and sports)
- Fine art
- Gourmet and grocery food
- Health and personal care
- Luggage and travel accessories
- Shoes, handbags, and sunglasses
- Video, DVD, and Blu-Ray
Additionally, there are other restrictions that apply to all sellers. See a comprehensive list at Amazon's site.
The best way to get the most sales possible for a product is to win Amazon's Buy Box. When customers look up a product on Amazon, only one seller qualifies to have the "Add to Cart" button on the page, also known as the Buy Box. Other sellers go under the "25 new" section of the site. To even be eligible for the Buy Box, a business must have a professional plan. Beyond that, meeting a list of requirements can help a business's chances, including accurately describing the product and consistently shipping on time.
Aside from advanced features, Amazon’s individual and professional plans bring the same benefits to sellers. Businesses will still need to set up sales tax collection and fulfillment processes to make sure they can efficiently process incoming orders. Whether a business decides to pay a small fee on each incoming order or a monthly subscription, the process of selling through Amazon can be smooth and profitable.