Amazon has become one of the largest online marketplaces in the world, providing opportunities for individuals and businesses to sell their products to millions of customers. “Can anyone sell on Amazon?” The answer is yes, but the process varies depending on whether you opt for an individual seller account or a professional one.
Amazon continues to dominate the global e-commerce landscape, with projections indicating that Amazon's annual net sales will surpass $540.29 billion by 2025. This growth presents significant opportunities for individuals looking to tap into the world’s largest online marketplace. In fact, projections show that by 2025, more than 2.5 million sellers will be actively listing products on Amazon, contributing to a growing trend of small-scale entrepreneurs and hobbyists becoming part of the E-commerce revolution. The Individual Seller account on Amazon is expected to remain a popular choice for those new to selling, offering a low-risk entry point for testing the waters with minimal upfront costs. With over 60% of all Amazon sales coming from third-party sellers, the platform's accessibility for individuals is more significant than ever, paving the way for a new generation of online entrepreneurs.
In this blog, we'll focus on the steps to becoming an individual seller on Amazon, what it entails, its benefits and limitations, and when it might make sense to transition to a professional account.
What is an Individual Seller Account?
An Individual Seller Account on Amazon is one of the most accessible options for new sellers, hobbyists, or anyone looking to test the waters by selling products online. It comes with a range of features and limitations that make it ideal for specific selling scenarios. Let's break it down:
No monthly fee
One of the most attractive features of an Individual Seller Account is the cost structure. Unlike the Professional Seller Account, which requires a monthly subscription fee, an Individual account does not have a recurring monthly charge. Instead, sellers are charged a $0.99 fee for each item sold.
This model is ideal for those who expect to sell a low volume of products and want to avoid committing to a fixed cost. The per-item fee makes it easier for new sellers to get started without the upfront investment, which is an essential factor to consider when deciding, "Can anyone sell on Amazon?"
Ideal for sellers with limited inventory
The Individual Seller Account is a perfect choice for those with limited inventory who plan to wait to scale. Whether you're testing the market with a few products or selling seasonal items. In that case, the Individual account allows you to pay only for what you sell without incurring the overhead of a subscription.
For example, if you're an artist creating custom jewelry or a small business owner looking to sell excess stock, this account will meet your needs without additional fees.
Restricts access to advanced selling tools
While the Individual account is simple and affordable, it does come with limitations on the tools available. Individual sellers are restricted from accessing advanced selling features, such as:
Amazon's Advertising Services (PPC campaigns)
Detailed Sales Analytics
The Buy Box competition (unless under certain conditions)
For sellers looking to take full advantage of these features, a Professional Seller Account would be more appropriate.
Why Choose an Individual Seller Account?
The Individual Seller Account is often the first choice for people trying to build a business on Amazon. But why exactly should you choose it? Let’s explore some of the benefits:
Suitable for occasional selling and market testing
An Individual Seller Account is ideal for people who want to sell occasionally or test the market with a small range of products. Whether you're looking to sell your homemade crafts, old textbooks, or items you no longer use, this account is perfect for limited-scale operations.
Market testing is one of the main reasons people choose this route. You can list a small number of items and gauge customer interest before committing to a more extensive inventory or more significant investments. It’s a low-risk way to enter the marketplace and evaluate your potential.
Cost-effective for low-volume sales
If you're wondering, “Can anyone sell on Amazon without paying a monthly fee?” the answer is yes, especially if you're planning on selling a small number of items. With no fixed monthly fee and a modest per-item charge, an Individual account is a cost-effective choice for low-volume sellers.
Selling at most 40 items per month ensures that the $0.99-per-item fee will not significantly reduce your profits. This setup allows you to keep things simple and pay only for what you sell.
Simplified setup process
Setting up an Individual Seller Account is fast and straightforward. You don't need to navigate complex settings or provide extensive business documentation. For many new sellers, this makes the process of becoming an Amazon seller accessible and easy to manage without much hassle.
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When is an Individual Seller Account Not Suitable?
While an Individual Seller Account offers great benefits, it’s not for everyone. There are situations where the limitations of this account might make it less than ideal for certain types of sellers. Here are some considerations to identify whether Individual Seller Account is suitable for you or not:
Selling large volumes
If you plan to sell more than 40 items per month, there may be better options than an Individual Seller Account. Since you’re charged a fee per item, this can significantly impact your profitability as you scale. Sellers who want to increase their sales volume or sell large quantities of the same product should consider the Professional Seller Account, which doesn’t include the per-item fee.
Need for advanced selling tools
As mentioned, an Individual Seller Account lacks access to advanced features like advertising tools and detailed sales analytics. If you're looking to optimize your product listings, promote your products through Amazon Ads, or use tools like the Buy Box, you’ll need to switch to a Professional Seller Account.
Desire to use Amazon advertising
If you're considering using Amazon's advertising services to increase product visibility and sales, an Individual Seller Account won’t be sufficient. Since Amazon’s advertising platform is only available to Professional sellers, it’s not a viable option for individuals who want to run ads to boost their listings.
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How to Create an Amazon Individual Seller Account?
If you’re ready to start selling on Amazon with an Individual Seller Account, follow these steps:
1. Gather necessary information
Before diving into the registration process, make sure you have the required information ready. It typically includes:
A valid government-issued ID (e.g., passport, driver's license)
Bank account information (for payment deposits)
Credit card details (for Amazon to charge any fees)
Tax identification information (for tax purposes, usually required for non-US sellers)
2. Visit Amazon Seller Central and choose the individual account type
Once you have everything ready, go to Amazon Seller Central and begin the registration process. Select the option for an Individual account during the sign-up process.
3. Enter business and personal details
Amazon will ask for both your personal and business details (if applicable). Be honest and thorough when providing this information, as it will be used to verify your account and process payments.
4. Submit product details and wait for account approval
Once you’ve completed your profile, you can begin adding your product listings. Amazon may ask you to submit your product details, including the product name, description, and pricing information.
After submitting, Amazon will typically approve your account within a few hours to a couple of days, depending on the information you provided.
Understanding Amazon Individual Seller Account Fees
The cost of selling as an Individual Seller on Amazon is relatively straightforward but can add up, depending on your sales volume. Let’s discuss the Individual Seller Account fees:
Per-item fee of $0.99
Amazon charges a $0.99 fee for each product you sell. This fee can quickly add up if you sell many items, so it’s crucial to ensure that your product prices are high enough to absorb this cost.
Referral fees range from 8% to 15% based on product category
In addition to the per-item fee, Amazon charges a referral fee for each sale. This fee varies depending on the product category and typically ranges from 8% to 15%. For example, the fee for selling electronics might be 8%, while clothing could be 15%. You’ll need to factor this cost into your pricing strategy.
Additional fees for certain services
Services such as Fulfillment by Amazon (FBA) or Amazon’s premium shipping options incur additional fees. If you plan to use these services, research the associated costs beforehand.
Best Practices for Product Listing and Sales
Here are some key tips to help you get the most out of your Amazon Individual Seller Account:
Use high-demand products and existing listings
To maximize your chances of success, start by selling high-demand products. Research your market to find popular items, and try to list products that already have existing listings on Amazon. This can save you time and make it easier for customers to find your products.
Focus on obtaining the Buy Box
The Buy Box is the section on a product’s page where customers can click to buy it. If you want to maximize sales, try to get your products listed in the Buy Box. While it’s easier for Professional sellers to win the Buy Box, Individual sellers can still be successful by offering competitive prices and good customer service.
Calculate profit margins carefully
Before you list products, calculate your profit margins carefully. Factor in the $0.99 per-item fee, referral fees, and shipping costs to ensure you're making a reasonable profit on each sale. Don’t forget to account for Amazon’s cut of the sale.
What Are The Best Options For Order Fulfillment?
When it comes to order fulfillment, Amazon's individual sellers have two main options: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Understanding these choices is crucial as you begin selling on Amazon, similar to deciding which seller account type to choose.
Fulfillment by Amazon (FBA)- It is a popular option for many sellers due to its convenience. With FBA, you ship your products to Amazon’s warehouses, where they are stored until they are sold. Once a customer makes a purchase, Amazon takes care of the entire fulfillment process, including packaging, shipping, customer service, and returns. However, you will incur storage fees, which are based on the size and volume of your inventory. While FBA makes logistics easier, the storage costs can affect your profitability.
Fulfillment by Merchant (FBM)- It requires you to handle inventory management, packaging, and shipping yourself. This option avoids storage fees, but it also means you’re responsible for the entire fulfillment process, including customer service. While FBM might result in higher shipping costs and more work on your part, it can be a good choice for sellers who want to avoid ongoing storage fees or are testing the market with a smaller inventory.
Ultimately, the decision between FBA and FBM depends on several factors, such as your sales volume, growth plans, and financial considerations. If you're confident about steady sales and looking for scalability, the convenience of FBA may outweigh the costs. However, if you need more clarification about sales or prefer a more flexible, pay-as-you-go model, FBM might be the better choice to avoid storage fees.
Transitioning to a Professional Seller Account
If your business grows or you need to access advanced features, it might be time to switch to a Professional Seller Account. Here are a few considerations to keep in mind while transitioning to a Professional Seller Account:
Consider switching when selling over 40 items/month
If you start selling more than 40 items per month, it may be time to upgrade to a Professional account. The monthly subscription fee for a Professional account is typically $39.99, which becomes more cost-effective than paying $0.99 for each item sold if you sell in high volumes.
Offers access to advanced tools and services
Upgrading to a Professional Seller Account opens the door to Amazon’s advanced tools, such as advertising services, buy box eligibility and sales analytics. These tools are invaluable for scaling your business and boosting profitability.
Summing Up
Becoming an Individual Seller on Amazon is a great way to start selling online. The cost-effective pricing, simple setup process, and no monthly fees make it ideal for small-scale sellers and those who are testing the waters. However, as your business grows, you'll likely need to consider a Professional Seller Account to access more powerful tools and scale your operations.
When considering whether to start as an individual seller, ask yourself, "Can anyone sell on Amazon?" If the answer is yes, then ensure that your approach will depend on your sales volume, the need for advanced tools, and your long-term business goals. Take the time to evaluate your options and choose the account type that best fits your needs.
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FAQs
Q1. Can I sell internationally with an Individual Seller Account?
Ans- Yes, you can sell internationally through Amazon’s global marketplaces. Amazon allows sellers with an Individual Seller Account to list products on Amazon's international marketplaces (such as Amazon UK, Canada, or Germany). You might have to account for additional shipping, import duties, and taxes when selling internationally.
Q2. What happens if I don't sell anything as an individual seller?
Ans: If you don't make any sales, you will not incur the $0.99 per item fee, and your account will remain open so you can continue adding products and marketing them. However, you should regularly check your listings to ensure they’re optimized for visibility to potential buyers.
Q3. Can I list products without having a business entity?
Ans- Yes, you can sell on Amazon as an individual without a formal business entity. Amazon allows you to register as a sole proprietor using your name for the account. However, if you later decide to scale and formalize your business, you can update your account information to reflect your business name and tax details.
Q4. Do I need an EIN (Employer Identification Number) to sell as an Individual Seller?
Ans- No, an EIN is not required to open an Individual Seller account. You can use your Social Security Number (SSN) when registering your account. However, if you plan to operate a business and file taxes as a company, you may need to obtain an EIN, which is useful for tax reporting purposes.
Q5. Can I use Amazon’s advertising tools as an Individual Seller?
Ans- Individual Sellers have limited access to Amazon’s advertising tools. While you can still run basic ads like Sponsored Products to promote your listings, you won’t have access to advanced features such as Amazon DSP (Demand-Side Platform) or video ads. These tools are available to Professional Sellers with higher-volume sales.
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