Last updated on June 13th, 2023 at 07:59 am
Are you planning to sell products on Amazon using their FBA (Fulfillment by Amazon) service, but unsure which selling plan to choose? Whether you’re an individual seller or a professional seller, selecting the right plan is crucial for your success on the platform. In this expert guide, we’ll walk you through the pros and cons of each plan, so you can make an informed decision and maximize your profits. From fees to features, we’ve got you covered!
Definition of Amazon FBA
Amazon FBA (Fulfillment by Amazon) is a service offered by Amazon that allows third-party sellers to store their products in Amazon’s fulfillment centers. When a customer places an order for a product, Amazon takes care of the shipping and handling, customer service, and returns on behalf of the seller. This can save sellers time and effort, and can also provide access to Amazon’s large customer base.
Importance of choosing the right selling plan
Choosing the right selling plan on Amazon is crucial for the success of your business. Depending on the volume of products you sell and your business goals, one plan may be more cost-effective and beneficial than the other. Selecting the wrong plan can result in unnecessary fees and limitations on your sales.
Overview of Individual vs Professional selling plan
The Individual selling plan is designed for sellers who plan to sell fewer than 40 items per month. This plan charges a per-item fee in addition to a referral fee on each sale. The Professional selling plan is for sellers who plan to sell more than 40 items per month. This plan charges a monthly subscription fee and a lower referral fee per sale. In addition, Professional sellers have access to more advanced tools and features, such as the ability to create promotions and use bulk listing and reporting tools.
Individual Selling Plan
Features and Limitations:
The Individual selling plan is an Amazon FBA selling plan designed for sellers who plan to sell fewer than 40 items per month. This plan has some limitations compared to the Professional selling plan, including the inability to use bulk listing and reporting tools, create promotions, or apply for permission to sell in certain categories. Additionally, individual sellers are charged a per-item fee in addition to a referral fee on each sale.
Pricing Structure:
The Individual selling plan charges a $0.99 fee per item sold, plus a referral fee that varies by category (typically around 15% of the item’s sale price).
Who is it Suitable for?
The Individual selling plan is suitable for sellers who are just starting out, or who plan to sell only a few items per month. It may also be suitable for sellers who want to test the waters before committing to the Professional selling plan.
How to Sign up for an Individual Selling Plan:
To sign up for an Individual selling plan, you’ll need to create an Amazon seller account, provide some basic information about your business, and select the Individual plan during the registration process.
Pros and Cons:
Pros of the Individual Selling Plan:
- Low Barrier to Entry: There is no monthly subscription fee, making it easy for sellers to start selling on Amazon without a significant upfront investment.
- Suitable for Low-Volume Sellers: If you plan to sell fewer than 40 items per month, the Individual selling plan can be a cost-effective option, as you’ll only be charged a per-item fee when you make a sale.
- Flexibility: The Individual selling plan is a good choice if you’re testing the waters or only plan to sell on Amazon sporadically. You can upgrade to the Professional selling plan later if your sales volume increases.
Cons of the Individual Selling Plan:
- Per-Item Fee: The $0.99 per-item fee can add up quickly if you sell a large volume of items. If you plan to sell more than 40 items per month, you may be better off with the Professional selling plan, which has a lower per-item fee.
- Limited Features: Individual sellers do not have access to some of the advanced tools and features that are available to Professional sellers, such as bulk listing and reporting tools, promotions, and permission to sell in certain categories.
- Limited Scalability: If your sales volume increases beyond 40 items per month, you may find that the Individual selling plan is no longer cost-effective. In this case, you’ll need to upgrade to the Professional selling plan to take advantage of the lower per-item fee and advanced features.
In summary, the Individual selling plan is a good choice for low-volume sellers who want to get started on Amazon without a significant upfront investment. However, if you plan to sell more than 40 items per month or want access to more advanced features, you’ll need to upgrade to the Professional selling plan.
Professional Selling Plan
Features and Benefits
The Professional Selling Plan is designed for high-volume sellers who plan to sell more than 40 items per month. This plan offers a range of benefits and features that are not available with the Individual selling plan, including the ability to use bulk listing and reporting tools, create promotions, and apply for permission to sell in certain categories.
Additionally, Professional sellers are not charged a per-item fee, and instead pay a flat monthly subscription fee of $39.99.
Pricing Structure
The Professional Selling Plan charges a flat monthly subscription fee of $39.99, which gives sellers access to advanced tools and features without being charged a per-item fee. However, Professional sellers are still subject to a referral fee that varies by category, typically around 15% of the item’s sale price.
Who is it Suitable For?
The Professional Selling Plan is suitable for high-volume sellers who plan to sell more than 40 items per month, as it offers a range of benefits and features that can help streamline the selling process and increase profitability. It is also a good choice for sellers who want to take advantage of Amazon’s platform to grow their business and reach a larger audience.
How to Sign Up for a Professional Selling Plan
To sign up for a Professional Selling Plan, you’ll need to create an Amazon seller account, provide some basic information about your business, and select the Professional plan during the registration process. You’ll also need to provide a credit card for billing purposes.
Pros and Cons
Pros of the Professional Selling Plan include the ability to use advanced tools and features to streamline the selling process, no per-item fee, and the ability to sell in certain categories that are not available to Individual sellers.
Cons include the monthly subscription fee of $39.99, which can be a barrier to entry for some sellers who are just starting out. Additionally, the referral fee can add up quickly if you sell high-value items.
Pros of the Professional Selling Plan
- Advanced tools and features: Professional sellers have access to a range of advanced tools and features that can help streamline the selling process, including bulk listing and reporting tools, promotions, and permission to sell in certain categories.
- No per-item fee: Professional sellers are not charged a per-item fee, which can be a significant cost savings if you sell a high volume of items.
- Access to exclusive categories: Professional sellers have the ability to sell in certain categories that are not available to Individual sellers, such as jewelry and watches, and can apply for permission to sell in additional categories.
Cons of the Professional Selling Plan
- Monthly subscription fee: The $39.99 monthly subscription fee can be a barrier to entry for some sellers who are just starting out, or who plan to sell a low volume of items.
- Referral fee: Professional sellers are still subject to a referral fee that varies by category, which can add up quickly if you sell high-value items or operate on thin margins.
- Limited scalability: While the Professional Selling Plan is a good choice for high-volume sellers, if your sales volume increases significantly, you may need to explore additional selling options or consider upgrading to a more advanced plan to take advantage of additional benefits and features.
In summary, the Professional Selling Plan is a good choice for high-volume sellers who want to take advantage of Amazon’s platform to grow their business and reach a larger audience. While the monthly subscription fee and referral fee can be a significant cost, the benefits and features that come with the Professional Selling Plan can help streamline the selling process and increase profitability.
Comparison between Individual and Professional Selling Plans
When selling on Amazon, there are two main selling plans available for sellers: Individual and Professional. Both plans have their own unique features and fee structures that may make one plan more suitable for certain types of businesses than the other.
Fee structure comparison
Under the Individual plan, there is no monthly subscription fee. Instead, there is a $0.99 per-item fee in addition to a referral fee on each sale. The referral fee varies based on the category of the product sold, but typically ranges from 6% to 45% of the item’s sale price.
Under the Professional plan, there is a $39.99 monthly subscription fee, but the per-item fee is waived. The referral fee is typically lower than the Individual plan, ranging from 6% to 25% of the item’s sale price depending on the category.
Key differences
In addition to the fee structure, there are several key differences between the Individual and Professional selling plans:
- Sales volume: The Individual plan is designed for sellers who plan to sell fewer than 40 items per month, while the Professional plan is for sellers who plan to sell more than 40 items per month.
- Access to advanced tools: Professional sellers have access to more advanced tools and features, such as the ability to create promotions and use bulk listing and reporting tools.
- Eligibility for certain categories: Some categories on Amazon require sellers to have a Professional plan in order to sell in them.
Which plan is more cost-effective?
Determining which plan is more cost-effective depends on your business’s sales volume and goals. If you plan to sell fewer than 40 items per month, the Individual plan may be more cost-effective due to the lack of a monthly subscription fee. However, if you plan to sell more than 40 items per month, the Professional plan may be more cost-effective due to the lower referral fees and access to advanced tools.
Which plan is better for small businesses?
For small businesses that plan to sell fewer than 40 items per month, the Individual plan may be the better choice due to the lack of a monthly subscription fee. However, if your small business plans to sell more than 40 items per month or needs access to advanced selling tools, the Professional plan may be a better fit.
Which plan is better for large businesses?
For larger businesses with higher sales volumes, the Professional plan may be the better choice due to the waived per-item fee and lower referral fees. Additionally, the access to advanced selling tools may be necessary for managing a larger inventory and optimizing sales.
Factors to Consider When Choosing a Selling Plan
When choosing a selling plan on Amazon, there are several factors to consider. Here are six important ones to keep in mind:
Sales volume
The first factor to consider is your sales volume. If you plan to sell fewer than 40 items per month, the Individual plan may be more cost-effective due to the lack of a monthly subscription fee. However, if you plan to sell more than 40 items per month, the Professional plan may be more cost-effective due to the lower referral fees and access to advanced tools.
Profit margins
Another important factor to consider is your profit margins. If your profit margins are tight, the Individual plan may be a better choice as it has a lower monthly fee. However, if you have higher profit margins, the Professional plan’s lower referral fees may help you maximize profits.
Number of products
If you plan to sell a large number of products, the Professional plan may be better suited to your needs as it offers bulk listing and reporting tools. However, if you only plan to sell a few products, the Individual plan may be sufficient.
Brand image
Your brand image is an important factor to consider when choosing a selling plan. If you are a larger, more established brand, the Professional plan’s access to advanced tools may be necessary to maintain your image. However, if you are a smaller brand, the Individual plan may suffice.
Time and effort required
The amount of time and effort you are willing to put into your selling efforts is also a factor to consider. The Professional plan’s access to advanced tools can save time and effort in managing larger inventories. However, if you have a smaller inventory and prefer a more hands-on approach, the Individual plan may be a better fit.
Customer service
Finally, consider the level of customer service you require. Professional sellers have access to Amazon’s dedicated seller support, which can be helpful in resolving issues quickly. However, if you are comfortable handling customer service on your own, the Individual plan may be sufficient.
By considering these six factors, you can make an informed decision about which selling plan on Amazon is right for your business.
Frequently Asked Questions
What is the minimum sales volume required for a Professional selling plan?
There is no minimum sales volume required for a Professional selling plan on Amazon.
Can I switch between Individual and Professional selling plans?
Yes, Amazon allows sellers to switch between Individual and Professional selling plans at any time.
What are the fees for Amazon FBA storage?
The fees for Amazon FBA storage vary based on the size and weight of the product being stored, as well as the time of year. You can find the current fee structure on Amazon’s FBA fee schedule.
How long does it take to get paid after a sale?
Amazon typically deposits payment into the seller’s account within 14 days after a sale. However, this time frame can vary based on the payment method chosen by the customer.
Do I need to have a registered business to sign up for a Professional selling plan?
No, a registered business is not required to sign up for a Professional selling plan. However, Amazon does require sellers to provide tax identification information in order to receive payments.
How do I know which plan is best for me?
The best selling plan for you depends on your sales volume, profit margins, number of products, brand image, time and effort required, and customer service needs. It’s important to consider all of these factors when choosing a plan.
What are the main differences between the Individual and Professional selling plans?
The main differences between the Individual and Professional selling plans are the fees, sales volume limits, and access to certain features such as bulk listing and order reports. Professional sellers also have the option to use Amazon’s fulfillment service (FBA) for an additional fee.
Is the Professional selling plan worth the additional fees?
Whether or not the Professional selling plan is worth the additional fees depends on your business needs and sales volume. If you plan to sell more than 40 items per month, the Professional selling plan may be more cost-effective.
Can I upgrade from an Individual to a Professional selling plan?
Yes, you can upgrade from an Individual to a Professional selling plan at any time.
What is the process for signing up for a Professional selling plan?
To sign up for a Professional selling plan on Amazon, you will need to provide your business information and tax identification information. You will also need to pay a monthly subscription fee.
Can I still use FBA with an Individual selling plan?
Yes, sellers on the Individual selling plan can still use Amazon’s fulfillment service (FBA), but they will be charged additional fees.
What happens if I exceed my monthly sales limit on an Individual selling plan?
If you exceed your monthly sales limit on an Individual selling plan, Amazon will automatically upgrade you to a Professional selling plan for the remainder of that month. You will be charged the monthly subscription fee for the Professional selling plan.
Do I need to pay for any additional services with a Professional selling plan?
Some additional services, such as Amazon’s fulfillment service (FBA), carry additional fees. However, many services are included in the monthly subscription fee for the Professional selling plan.
How does Amazon calculate the referral fees for both plans?
Amazon calculates referral fees as a percentage of the sale price of the item being sold. The percentage varies based on the category of the product.
Is there a trial period for the Professional selling plan?
No, Amazon does not offer a trial period for the Professional selling plan. However, you can switch back to the Individual selling plan at any time.
How do I track my sales and fees with both plans?
Amazon provides detailed reports on sales and fees for both Individual and Professional selling plans. These reports can be accessed through the seller dashboard.
Can I use Amazon FBA for international sales with both plans?
Yes, both Individual and Professional selling plans support international sales using Amazon FBA. However, it’s important to note that there may be additional fees for international shipping and customs, and sellers must comply with local regulations and taxes.
Can I offer free shipping with both plans?
Yes, sellers can offer free shipping with both Individual and Professional selling plans. However, it’s important to consider the cost of shipping when pricing products, and to ensure that the cost of shipping is factored into profit margins.
Can I use Amazon FBA for my own website sales?
Yes, sellers can use Amazon FBA for their own website sales. This is known as Multi-Channel Fulfillment (MCF). With MCF, Amazon will pick, pack, and ship orders from other sales channels, including a seller’s own website, using their FBA inventory. Additional fees may apply for MCF orders.
What kind of customer service support is available with both plans?
Both Individual and Professional selling plans offer access to Amazon’s customer service and support resources. This includes a Help Center with articles and tutorials, email support, and phone support for urgent issues. Professional sellers may also have access to an account manager for more personalized support.
I hope this information is helpful in answering your questions about Amazon selling plans. If you have any further questions or concerns, please don’t hesitate to ask.
