Different Types of Seller Accounts
If you plan to sell products on Amazon, you should know the different types of seller accounts available. Signing up for a seller account is beneficial for qualifying for specific products, including the Amazon seller loan offered via the lending program. The marketplace has two main seller accounts: individual and professional. You may find other frameworks like FBA (fulfilled by Amazon), SFP (seller fulfilled prime), and FBM (fulfilled by merchant).
Individual Seller Account
An individual Amazon seller account is the most popular option for new sellers. The account is free to register and allows sellers to add an unlimited number of products. If you’re new to e-commerce and not expecting to sell more than 40 products per month, the individual seller account is the best option. Amazon won’t charge a monthly fee as it does with the professional seller account. You’ll pay a fixed fee of $0.99 per sale.
If you sell 40 or fewer products per month, the fee adds up to $39.60 or less ($0.99 x 40). The price for professional seller accounts is $39.99 per month, whether or not you exceed 40 sales per month. Using a professional seller account when you make less than 40 sales will result in paying more. If you sell more than 40 products, using the individual seller account will result in higher fees because Amazon charges $0.99 per sale.
Professional Seller Account
Sellers with a fully-fledged business or expecting more than 40 sales a month can choose the professional seller account. The account is available for a fixed monthly fee of $39.99, regardless of the number of sales. Unlike the individual seller account, the professional account doesn’t involve the $0.99 cost per sale. Whether you sell 1,000 or 10 products monthly, you’ll pay the fixed monthly fee. Professional seller accounts feature various benefits.
Sellers have more control over their inventory management and can generate reports. Individual seller accounts don’t feature reports, so determining which products are selling or not selling can be tedious. Professional seller accounts make creating a focused business strategy easier, and sellers can collect sales tax. Other benefits of the professional seller account include access to all categories, Manufacturer Part Number, and the buy box.
Individual Vs. Professional Seller Accounts
Individual and professional seller accounts have one main similarity. Both accounts allow sellers to create unlimited product pages within the Amazon catalog. Other than that, the two Amazon accounts are different, come with unique privileges, and suit different e-commerce sellers.
The payment structure is an obvious distinction. Individual accounts are charged per sale ($0.99), while professional accounts are charged monthly ($39.99). Pricing only affects your business if you sell below or above 40 units. Stores that sell more than 50 units per month will save more with a professional account. Here are other differences:
a) Inventory & Order Management: Professional seller accounts manage inventory using feeds, spreadsheets, and reports, while individual seller accounts don’t. You can manage orders using reports and related feeds only in the professional account.
b) API Functions: Professional account holders can use the Amazon marketplace web service to perform various API functions, including uploading feeds and receiving reports. API functions aren’t available for individual seller accounts.
c) Shipping Rates: Individual seller account holders use Amazon-set shipping rates for all products. Professional seller account holders have the freedom to set their custom shipping rates for non-media products.
d) Promotions & Gifts: Sellers with a professional account can leverage promotions, gift services, special listings, and listing placement in the Featured Offer section. Individual seller account doesn’t come with such privileges. You can’t use Amazon Business features for unique offers and pricing unless you have a professional seller account.
e) Other Differences: Professional seller accounts offer all categories and access to the Manufacturer Part Number and the Buy Box. Individual seller accounts may limit some categories, and sellers don’t have access to the Manufacturer Part Number or Buy Box.
FBA, SFP & FBM
FBA (fulfilled by Amazon), SFP (seller fulfilled Prime), and FBM (fulfilled by merchant) are not Amazon accounts per se. You can use the FBA model with an individual or professional Amazon seller account. FBA means entrusting Amazon with the entire inventory and logistics, including storing, picking, packaging, and shipping the products. Amazon will handle customer support, returns, and other engagements with the customers. The seller sends a portion of their inventory to Amazon warehouses and pays a storage fee. Amazon handles the rest, from picking orders to shipping the products.
SFP and FBM are synonymous and involve the seller taking complete control of their inventory. Instead of sending products to Amazon warehouses, the seller keeps them within their businesses or via third-party solutions. The seller handles picking, packaging, shipping, and customer service.
What About the Amazon Seller Loan?
Amazon unleashed its lending program in 2011 and awards sellers with loans from $1,000 to $75,000. The lending program is invitational only and restricts funds to stocking your Amazon inventory. E-commerce sellers that don’t qualify for the ALP can find other Amazon seller loan products through lenders. Popular options include Merchant Cash Advance, business term loans, personal loans, credit card loans, working capital, and more.