How to Sell on Amazon as an Individual Seller

Many people have the same question about selling online: Can any individual sell on Amazon? There’s only one answer to that question – an emphatic YES! Amazon is not just for big brands. Anyone can sell on Amazon.
However, starting to sell on Amazon can be daunting. That is why many people who are unsure about the viability of selling on the platform begin as individual sellers. It has no upfront cost and allows sellers to test the waters before diving into the deep end of the Amazon Marketplace. The only thing you need to get started is a great product to sell.
Recommended: How to do Profitable Amazon Product Research.
So, let’s look at how you can create an Amazon individual seller account and how you can use it to sell on Amazon.

Amazon individual seller account: An introduction

Before we go into how you can create an Amazon individual seller account, let’s take a look at what it has to offer. When creating a new seller account, you’ll be prompted to pick one of two available options – create an individual seller account or create a professional seller account.

Individual seller account

An individual account is free to create, but you need to pay a commission of $0.99 for every sale that you make on Amazon. There are also additional referral fees and variable closing fees that are part of every Amazon sale. Individual sellers do not have access to or cannot do the following:

Get in-depth inventory reports
Sell restricted products or products in restricted categories
Use Amazon’s advertising services
Run promotions
Create listings in bulk
Add multiple users to your account
Create new product detail pages or change existing ones
Set shipping rates

While this looks like an exhaustive list of restrictions, the selling point of an individual account is that there is no upfront cost.

As an individual seller, you have a few options when it comes to business structures. You can be a sole proprietor, the simplest and most common design, or you can form a partnership or corporation. You can also explore the benefits of having a multi-member vs single-member LLC for your online business.

Professional seller account

A professional account will set you back $39.99 every month, along with some additional referral fees and variable closing fees for every sale. Unlike the individual Amazon seller account, ‘professional’ sellers are not charged an extra $0.99 per item sold. Professional seller accounts also have access to some advertising features, receive in-depth inventory reports, and can run promotions, among a host of other benefits.

Note: Whether you have an individual seller account or a professional one, Amazon collects a referral fee on each sale. It is a percentage of the total transaction, and it varies by product category.

The Amazon individual seller account is the basic seller plan. It is cost-effective if you’re selling less than 40 products a month, and the pay-as-you-go model ensures that you’re not spending any extra money. Once you do start selling more than 40 products regularly, you can always switch to a professional selling plan.

This is what many sellers do when starting on Amazon. They start as an individual seller on Amazon to test the waters and gauge the demand for their product. Once sales pick up, sellers switch to a professional selling plan that gives them more tools, information, and the opportunity to win the Buy Box.

Note: Sellers can switch between professional and individual selling plans whenever they want to. The monthly $39.99 fee for a professional selling plan is non-refundable and will not be returned if you switch to an individual selling plan.

How to create an Amazon individual seller account

Registering to sell on Amazon is a straightforward process. It should not take you more than an hour, and you can streamline the process by keeping the following information and documents handy:

Your legal name, business name, and address: Your ‘legal name’ will not be made public while your business name is the one that customers will see when buying your product.
Government-issued ID: Any proof of identity issued by your government.
Contact information: We recommend setting up a separate email address for your Amazon business. This contact information will be used by Amazon and customers to get in touch with you directly. Have a working phone number ready as well. Amazon will verify your contact information during the registration process.
A ‘ship from’ address: In case you are shipping your products from an address that is not your business address.
Bank Account Information: This account is where Amazon will send you the proceeds of your sales. You will usually get your money every 14 days.
Tax identity information: In the United States, you can provide your Social Security number or your company’s Federal Tax ID number. You have to submit your tax information and have it verified. Keep in mind that Amazon does not file your taxes. The retail giant is required by law to collect your tax ID information so that relevant authorities can be notified of taxable earnings you make as a seller. The responsibility of paying your taxes is yours.
You can set your business entity to sole proprietorship, Private Limited, or LLC (Limited Liability Company) and register your account. However, certain entities like LLCs would have financial and legal benefits over others. So plan and choose your entity wisely.

Note: You can stop the registration process at any point and return where you left off.

Once you have all this information ready to go, you can start creating your account. To create an Amazon individual seller account, navigate to sell.amazon.com and check underselling plans. Click on the ‘Sign up for individual’ option to proceed. You will be redirected to your seller central account. If you don’t already have a seller central account, just click Sign up and enter the relevant details.

Once you are logged in, you will be redirected to a page where you can complete the registration process.

For a detailed breakdown of the registration process, you can watch this video. Ankita Nagaraj, Head of Customer Success at SellerApp, takes you through everything you need to do to become a registered seller on Amazon!

Created your Amazon individual seller account? Let’s look at how you can upgrade your seller account to a professional one.

Log in to your Amazon seller central account
Look for ‘Settings’ by scrolling down to the bottom of the page
Under ‘Settings,’ click on ‘Account info’
Navigate to the ‘Your services’ section and click ‘Manage’
Next to your account type, you’ll notice an option that reads ‘Upgrade’. Click on ‘Upgrade’ to change your seller account to the professional selling plan.

If you want to switch from a professional selling plan to an individual selling plan, you can follow the same steps. The only difference, in this case, is that instead of the ‘Upgrade’ option, you will be given a ‘Downgrade’ option.

List your first product as an Amazon individual seller

Once you’ve set up your account, you can start listing products on Amazon. As an Amazon individual seller, you cannot create listings for products that aren’t already on the platform. So, the easiest way to put your products on the market is to find them on Amazon.

Search for your product on Amazon, and open its product page. On the right side of the listing, you can find the Buy Box. Scroll down until you find the ‘Sell on Amazon’ option, as seen in the image below.

Once you’ve clicked the button, you will be redirected to a page where you will have to add the following information.

SKU: You can enter a code yourself or leave it blank. If you don’t populate this field, Amazon will randomly generate an SKU for your inventory.
Price: Set the selling price of your product. Amazon has a handy button that lets you match the lowest price.
Quantity: The default quantity is one unit. You can change the number depending on the number of products you have to sell.
Condition: For most products, you only have two options – ‘Used’ or New’.
Fulfillment method: Here, you enter your preferred fulfillment method. You have the option to fulfill the order yourself through FBM (fulfillment by merchant) or SFP (seller fulfilled Prime), or you can let Amazon take care of fulfillment using FBA (fulfillment by Amazon).

Once you have listed your product for sale, it is all about waiting for the sales to roll in. Amazon sellers on the individual selling plan are not eligible to win the Buy Box, so that does reduce your chances of making a sale, but if you price competitively, it is a matter of time. The cheaper the prices, the more likely customers are going to buy your product.

You need to consider multiple factors when deciding on your product price. The final price has to factor in referral, closing, shipping, and FBA fees if you are fulfilling orders via FBA. Referral fees depend on the product category, closing fees, on the other hand, depending on the product’s price range, and finally, the shipping fee is proportionate to the volume of the package, and the distance of the delivery.
If you’re using the FBA service (more on that in a bit), you also have to factor in additional costs like pick and pack fees, and storage fees. While all this sounds incredibly complicated, if you’re an FBA seller, you can easily find the profitability and total cost of your product using SellerApp’s free FBA calculator.

A note on fulfillment methods

Amazon individual sellers have three options when it comes to fulfillment. They can choose to pack and ship the product themselves (Fulfillment-by-Merchant), or they can choose to outsource storage, packaging, and shipping to Amazon using FBA.

All sellers have to decide their fulfillment strategy when putting up a product for sale on Amazon. Just like the type of seller account, you can switch between fulfillment methods when you want to. When you start selling on Amazon, you must understand your options.

Fulfillment by Amazon

FBA is the more popular option among sellers. It exponentially simplifies the selling process, but at a cost. Here’s a summary of the FBA process:

Sellers procure products and ship them to an Amazon warehouse.
The products are stored at Amazon’s fulfillment center until an order is placed. Sellers are charged a storage fee, which usually depends on the size/volume of the product.
After an order is placed, Amazon completes the transaction and updates your inventory.
The order is packed and shipped by Amazon.
Amazon handles customer service and follows up on the order. Returns and refunds are also handled by the retail giant.
You get your profits credited directly to your account every 14 days.

It is evident from the description that Amazon takes care of most of the logistics. An Amazon individual seller only has to care about choosing the product, maintaining inventory, and marketing. This is a great way to quickly scale your business, but storage fees can spoil the party if you’re not careful.

Note: Products fulfilled through FBA qualify for Amazon Prime. This can significantly boost sales.

If you’re an Amazon individual seller who is testing the waters, you don’t want to be stuck paying Amazon every month for storage. If you want to continue with a pay-as-you-go model, FBA might not be the fulfillment method for you.

Fulfillment by Merchant

Let’s take a look at the other option – packing and shipping the product yourself as an Amazon individual seller. In this case, you will have to manage and store your inventory and send it yourself when you receive an order. Individual sellers will also have to handle customer service and product returns if they are fulfilling orders through FBM. This is a lot of work, and shipping costs tend to be higher than FBA. However, there is a silver lining – there are no storage fees.

So, which fulfillment method is better for Amazon Individual sellers? The fact of the matter is, that there is no conclusive answer to that question. If an Amazon individual seller is confident that they will have consistent sales, then it is worthwhile to consider FBA. If you’re just starting and are unsure about selling on Amazon, it might be better to avoid FBA and storage fees and fulfill the orders yourself.

Final thoughts

With an Amazon individual seller account, your options are limited when it comes to listing optimization and advertising. However, the first step to creating a successful Amazon business is finding the perfect product. Whether you have a basic or professional account, as an individual seller on Amazon, you have to carve out your niche and sell products that are in high demand.

Wondering how you can find the best products?

This is where SellerApp makes a difference. The platform’s self-learning machine algorithms track Amazon data to give you real-time insights on what is selling and what isn’t. You’ll get actionable insights like estimated orders, estimated revenue, number of sellers, and even seller type, among others.

Reference.

Sellerapp

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