We’ve covered the beginner essentials of being a Fulfilment-by-Amazon (FBA) seller, but one critical element remains: what type of Amazon seller are you? There are two different FBA seller plans available: individual and professional. Choosing the right plan is important, as this will help determine your ROI. We’ll break down the definition of each to help you make an informed decision, and cover the costs and benefits associated with them.
Three Reasons to Choose an Individual Plan
Individual seller plans are designed for smaller operations with less sales volume than that of the “bigger guys.” Mom-and-pop stores and startup businesses often choose this option for a few reasons:
1: No Monthly Fee
You won’t need to pay a base monthly fee – only a smaller charge for each sale (we’ll cover this in more detail further down when comparing against professional FBA accounts).
2: Basic Analytics at a Lower Cost (if Fewer Sales)
You won’t have the ability to create Amazon sponsored ads but, if you only make a handful of sales each month and don’t want access to more detailed reporting, it’s still feasible to stick with the individual plan as it will cost less to keep active. This is especially true if you sell more niche, expensive items that can help cover your operating expenses and Amazon-related fees.
3: You Can Sell Items in Ungated Categories
You’re able to create product pages and sell items in ungated categories, the latter of which refers to those that don’t require a professional plan (more on this further down).
Three Reasons to Go Professional
Professional plans are available to those who require more data to work with and tend to move many products each month. Key benefits of this option include the following:
1: Access to Sponsored Ads
As noted earlier, individual FBA accounts cannot create Amazon sponsored ads, and they miss out on the enormous cost-saving, profit-boosting benefits of having well-optimized PPC campaigns. Calculating your ACoS and profit margin can help reduce your campaign spend while increasing ad engagement by targeting the right shoppers. Using an automated, self-driving PPC tool such as Trellis does much of the work in a single click including automatic keyword generation and data-driven bid and budget optimizations. This is key to helping further improve the potential of every advertised product. However, without a professional plan, you’ll miss out on these opportunities.
2: Advanced Reporting
Paying more means being able to do more when it comes to the FBA professional plan. Sellers who choose this option can still create new product pages like with the individual plan, but they can also actively monitor and manage inventory, consult order reports and feeds, use the Amazon Marketplace Web Service to perform critical API functions and more, set their own shipping rates for select products, create promotions and incentives such as coupons, and more. Critically, professional sellers can implement taxes with orders, create those aforementioned sponsored ads, manage user permissions and grant access rights, and more.
3: Buying the Buy Box
Long story short, the Buy Box is just what it sounds like: a quick-action box for users to click that allows them to immediately purchase an item. This is located directly under the Add to Cart box in a listing, and it drastically streamlines the purchase process as long as a buyer has a valid, active credit card pre-linked to their account. The Buy Box is only available to professional brand/private-label merchants and professional resellers and is a feature that is either granted or revoked by Amazon. This means that sellers can’t simply “opt-in” to this feature.
How Niche are Your Products?
Do you plan on selling something a little more out-of-the-ordinary such as collectible items or even auto parts? While both individual and professional plans allow sellers to list under the same standard 20 product categories, professional plans grant you access to even more. Therefore, if you sell in any of the following gated categories, you’ll need a professional account set up:
- Collectibles & Coins
- Fashion Jewelry
- Fine Jewelry
- Fine Art
- Food & Gourmet
- Industrial & Scientific
- Professional Services
- Sports Collectibles
- Video, DVD & Blu-Ray
Comparing Individual and Professional Fees
Professional plans cost $39.99/month for a base subscription fee, which individual plans don’t require. However, the latter charges you 99 cents for every product sold. In that sense, if you move more than 40 units a month, it’s worth signing up for the professional plan. You only pay one flat subscription fee, so there’s no guesswork or sticker shock to worry about – as long as you factor in additional fees such as those for fulfillment, referrals, unsold products, or otherwise.
So, Which Plan is Right for You?
We recommend an individual plan if you’re just starting out and want to get your toes wet but, if you sell more than 40 items a month and want to take your selling strategy to the next level, the professional account is much more worthwhile. Do your research and plan accordingly, for selecting the most appropriate path can help maximize the potential of your business.
Running a successful e-commerce business of any size takes plenty of work and dedication. Manually optimizing Amazon sponsored ads only adds to the challenge, which is why automated, self-driving PPC tools such as Trellis are significant time and cost savers. We’ve helped many brands since our launch including Petpeppy, whose advertising sales increased by 88% while driving down their ACoS by 14%. That’s a huge win for any seller, and we’d love to help your business improve in a similar fashion! Sign up for a free trial of Trellis today.