With more than 213 million visitors in the US alone, making a killing on Amazon is the ecommerce dream for many ambitious sellers.
But even when you’ve achieved some big wins as a seller on Amazon there’s sooo much to learn, whether it’s understanding the different Amazon seller accounts or mastering your inventory for increased ROI.
The real question is:
How can you make sure you stay within Amazon’s strict rules, while also getting the most out of your store?🤔
In this guide, we’ll reveal some essential details about Amazon seller accounts and the top must-know tips to get ahead.
The Scoop on Amazon Seller Accounts
- A deep dive into Amazon seller accounts
- Must-know facts about running a store on Amazon
- The blueprint for Amazon selling success
At SellersFunding, we help sellers build businesses they can be proud of. Discover how our ecommerce funding solutions can help you grow.
A deep dive into Amazon seller accounts
An Amazon seller’s account is every seller’s starting point on Amazon.
It’s the first step in setting up your Amazon store and carving out a niche for yourself on one of the world’s most powerful marketplaces. From this point onwards, the online shopping world is your oyster!
Let’s take a closer look at what Amazon seller accounts are all about:
The two types of Amazon seller accounts
If you’re hoping for some variety in your Amazon journey, you’re in luck.
Amazon seller accounts come in two forms. Let’s take a closer look at the options:
1. Third-party sellers’ account
Similar to most marketplace accounts, the third-party sellers account is made for both registered businesses and self-employed people ready to set up shop on Amazon.
As a seller, you’ll be responsible for your stock, listings, account health, advertising and more. With this type of account, you can also set your own product prices (as long as they aren’t so high they’d be considered price gouging by Amazon).
You’re also free to list products and get your brand in front of Amazon’s gigantic customer base. If you choose to self-fulfill orders, you can set your own shipping charges leaving more money in your pocket (more on this later).
As a third-party seller, you’ll operate from your Amazon Seller Central dashboard and will get access to two account types you can choose from:
- Individual selling account: Under the individual sellers account you can list 20 items and will pay £0.75 fee (excluding VAT) on each item. You’ll also have a 10 cubic metre inventory space limit.
- Professional selling account: With a professional account you’ll gain access to Amazon’s tools, reports, and promotional features, plus 25 cubic metre inventory space to start with. For these perks, you’ll pay £25 before VAT per month, making the account cost-effective if you sell 35 items per month or more.
(For more information on third-party Amazon seller accounts check out Amazon’s handy post).
No matter which account you opt for, your selling privileges on Amazon will come with fees, including:
- Referral fees – Amazon’s cut for giving you access to their customers.
- Fulfilment fees – A charge for Amazon to store and ship your orders if you use their fulfillment services.
- Ad-hoc fees – For example, long term storage fees when using Fulfilled By Amazon (FBA).
Vendor account
With an invite-only set up, the Vendor account is exclusively made for manufacturers and distributors. Amazon takes on ownership rights over your inventory, including managing your product portfolio, marketing and selling your items on their platform.
The vendor account program makes selling a little more hands-free than the third-party sellers accounts, but the reduced workload comes at a price.
Amazon charges three core fees for its vendor accounts:
- Market development fund (MDF): This fund is used to cover portfolio management costs to marketing and everything in between. The MDF rate hovers at around 5-15%.
- Freight allowance: Created to cover the goods pickup Amazon conducts in order to transport vendor goods to its warehouse. The freight allowance fee sits between 2-3%.
- Damage allowance: Designed to account for irreparable goods that can’t be put back on the shelves. Instead of sending the damaged stock back to the vendor, Amazon charges between 2-3% for disposal related costs.
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Must-know facts about running an Amazon store
When it comes to policing seller accounts, Amazon is quite the disciplinarian. Fail to colour within the lines and you’ll soon find yourself in hot water.
Let’s break down some of the answers to your top questions for staying on the right side of Amazon.
When does Amazon pay seller accounts?
The short answer is every two weeks. But the long answer is far more complicated. Amazon is notorious for delaying payouts due to its extensive returns policy and strict rules on changing bank accounts which can hold up disbursements.
To protect your store, have an ecommerce funding provider you can rely on in case you don’t receive funds from Amazon on your predicted payout day.
Can I have multiple Amazon seller accounts?
If you’re looking to set up more than one Amazon seller account, we’ve got good news. It is possible to get approval for a second account or more. However, it’s vital you get approval from the big boss, Amazon.
Signing up for multiple accounts without Amazon’s consent is a HUGE no-no, even if done accidentally. It can get your account suspended or even banned with your selling rights terminated for good. In other words, no more Amazon love ‘til the end of time. 😬
How many Amazon sellers accounts can I have? And when is the right time to get another account?
Amazon will assess requests for multiple accounts on a case-by-case basis. You’ll be required to have a genuine business need and healthy existing account.
Note, managing multiple amazon seller accounts can be tricky. You’ll create more work in your business and increase your financial obligations, which can quickly complicate your Amazon business if you’re not on top of your game.
It’s not about how many Amazon seller accounts you can have, but how many your business needs and can handle. To be safe, develop a strategy for how to have multiple Amazon seller accounts, while maintaining progress in your existing store.
To make your own assessment on whether you should go down the multiple account route, here are some scenarios in which taking on another store might make sense:
- You’ve scaled your current product portfolio to the max.
- You’re financially and mentally ready to launch a new store.
- You found a new opportunity in another niche you can’t serve with your existing store.
- You’re preparing to outsource the bulk of the work in your existing store.
- The products you want to launch will have different sales tax obligations.
How to open multiple amazon seller accounts
Once you meet the requirements, applying for another seller account is simple. Here are the steps to take:
- Get a separate bank account, credit card, and email address together. You can keep the same business entity.
- Open a case via Sellers Central to inform Amazon of your intention to open a new account with a different bank account credit card and email address under your existing business entity. Then request their approval. Keep your email short, focused on the purpose of your second account e.g., for tax purposes, and of course, keep it polite.
- Wait for the go-ahead from Amazon.
Fulfilling orders: Amazon FBA or FBM?
One of Amazon’s greatest differentiating features is its fulfillment options.
Amazon allows professional and individual sellers to choose how they would like items to get to customers, using these two options:
- Fulfilled by Amazon (FBA): Amazon’s FBA service spans the globe, thanks to the Global Selling programme which allows sellers to complete orders internationally by shipping goods through Amazon’s expansive fulfilment network.
With this option, sellers ship their goods into a warehouse assigned by Amazon. As orders roll in, Amazon will take care of the picking, packing, shipping, and returns for a fee which depends on the item’s size, height, and category.
The hands-free nature of Amazon FBA frees up sellers’ time to focus on other important tasks, like marketing and product development.
Many sellers speculate that FBA products also get a boost in ranking. However, Amazon is keeping quiet on the matter, so there’s no concrete evidence for this claim.
- Fulfilled by Merchant (FBM): FBM puts sellers in the driving seat of their store. You get more control over shipping times and products — e.g., you can conduct a final inspection before sending goods out, and can use custom packaging instead of the classic Amazon box.
Since Amazon won’t be involved in your fulfillment process, you’ll have one less fee to pay to them. If you secure good deals with shipping carriers or a 3PL you can increase your profits and pass the savings on to customers to make your items more appealing.
Amazon Inventory Performance Index (IPI)
The IPI score is a metric Amazon uses to keep standards high on their platform, assessing four key areas:
- FBA in-stock rate
- FBA sell-through rate
- Excess inventory percentage
- Stranded inventory percentage
Amazon zooms in on how you’re managing your FBA inventory and uses its findings in your IPI score. The highest IPI attainable is 1,000 and the lowest is 500 (up from 450 since 1st July, 2021).
A high IPI score will get you better rankings and more inventory space. However, if your IPI score slips below the 450 cut-off point, you could end up with slashed inventory limits, suspended listings, and dropped rankings. Long story short, the higher your IPI, the better.
Just a heads up, Amazon regularly changes its IPI threshold, so always check the latest threshold to ensure your store stays within Amazon’s requirements.
What about Amazon’s Brand Registry?
With customer experience and brand building becoming increasingly important for Amazon sellers, Brand Registry is an Amazon brand’s saving grace.
You can rise above the noise generated by hoards of single listings with branded content, get access to brand analytics tools to guide your business decisions, and much more.
Brand Registry is vital for long-term success and sustainability in today’s hyper-competitive ecommerce market. Not only does Brand Registry allow you to create a store that showcases your brand’s unique personality and company experience, it offers you protection from unruly, counterfeit sellers. And trust, Amazon’s investigators will weed out sellers who apply black hat tactics. 🕵️
For example, some sellers may partake in listing hijacking, undercutting your product listings with a cheaper price to win the Buy Box and steal your sales. As a registered Amazon brand, you can report these sellers, get them booted off your listing and restore your rightful place with the Buy Box.
To qualify for Brand Registry you must have a:
- Pending or registered active image or text trademark
- Trademark from a qualifying country (check out the official list here)
- Trademark on your goods or packaging
A+ Content, Amazon Store, and Enhanced Brand Content
Once you’ve attained the coveted registered brand status, the Amazon world opens up. You’ll have options on how to present your store through images, videos, and text.
Amazon offers three main ways to present your store:
- A+ Content: Made for professional Amazon seller accounts, the A+ Content feature facilitates the use of premium multimedia content to promote your store. For example, you can use top quality images, high-definition video, and enhanced product descriptions. The content-rich setup is designed to convey your product’s value and boost conversions.
- Enhanced Brand Content (EBC): Designed to grab attention, drive traffic, and increase sales through text and images, EBC is the ultimate spokesperson for your brand. When used correctly, you can elevate your brand’s value and highlight your products’ quality to win over more customers.
- Amazon Stores: Built to resemble an online store, the Amazon Stores feature enables you to craft a similar experience to what shoppers would receive on their favourite websites. From splitting items into categories to eye-catching banners and videos, your brand will have the ultimate opportunity to display its mission and values to attract your dream customers.
The blueprint for Amazon selling success
Amazon is the golden child of the ecommerce world, with a loyal customer base and high sales to match.
And the best part is, you can piggyback off Amazon’s success to drive enviable results for your own ecommerce business. Whether you choose to make Amazon your main selling platform or simply one channel in your ecommerce business, you can make your goals a reality.
But to win long-term and maximise every opportunity on Amazon, it’s going to take some trial and error. Commit time from your schedule to get to know Amazon’s terms of service updates, changes in Amazon seller accounts policies, and program developments to keep your store compliant and profitable.
Ready to level up your Amazon business? Learn more about fast, flexible funding with SellersFunding.
