Quick Tip for New Sellers: Selling Plans and Business Types


Hi Sellers!

Maybe you are thinking about changing your account on Amazon, you will need to know the difference between selling plans and business type selection.

When you register to sell on Amazon you will have to select the appropriate Business type for your business. We recommend that you speak with professional advisors such as an accountant to understand your legal requirements and the correct business type you need to select to sell on Amazon.
If you are registering as a Private Person, you are doing so in the context of a private activity. Registering as a Business seller means that you are acting in the context of a commercial or professional activity. Most of the time, Business sellers are registered legal entities. However, you may also act as sole proprietor without being registered as a company depending on the local requirements that apply to your activity.
Check out this help page for additional information: Information required to sell on Amazon.

The Selling plan you select does not determine your Business type.
To sell on Amazon you can choose either an Individual selling plan or a Professional Selling plan.
The Individual selling plan is for sellers who do not need access to inventory tools and reports for volume selling. Under the Individual selling plan, you do not pay a monthly subscription fee. You pay a per-item fee in addition to applicable fees. Learn more about the Individual selling plan.
With the Professional selling plan, you pay a non-refundable monthly subscription fee regardless of whether you list or sell anything. You do not pay a per-item fee when an item sells. All other fees are charged as applicable.
The Professional selling plan gives you access to inventory tools to upload batch files and manage your orders through feeds and reports. These tools are beneficial to most medium- to large-size businesses. For answers to common questions about this fee, go to Monthly subscription fee FAQ.

For a side by side comparison please see this page.

Are you a current seller who is currently using one plan but would like to switch to the other? Please go to Switch to a Professional selling plan or Switch to an Individual selling plan for more details.

Where do you find the best information about which business type to select when selling on Amazon?

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I would always advise sellers to speak with an accountant as that would depends on their current individual financial and employment status

Unfortunately though, the sign up process on amazon doesn’t really make it clear , with many new sellers believing sole traders are individuals


Usually on this forum when you’ve got confused between Individual account and Individual plan and entered the wrong legal entity


The amazon sign up process is about as clear as mud. @Jessica A thread with input from seasoned sellers and forum users to bash out a clear sign up procedure with obvious titles to the different optios would be extremely useful to new sellers and save a lot of pain on these forums trying to explain to new sellers where they have gone wrong.


Thanks for your advice and suggestion!


I’m glad to hear that! I learn from these forums everyday and I love seeing people share their knowledge :slight_smile:


Thank you for your feedback! It will go towards helping us to create more content to support sellers!


when the account health team send emails to sellers incorrectly registered as individuals, they include this section

Use the following information to select the correct legal entity:
Individual: You must only choose this legal entity if you do not sell for profit. Individual sellers may list unwanted personal items, such as old DVDs or books.
– UK Sole Proprietor: This legal entity is for any commercial individual who sells for profit. A Sole Proprietorship is registered with Her Majesty’s Revenue and Customs (HMRC). There is no legal distinction between the owner and the business.
– State-owned: A business that is either wholly or partially owned and operated by a government.
– Publicly-listed: A business with shares listed on a stock exchange for public trading.
– Privately-owned (such as Limited, Partnership, International Sole Proprietor): A business controlled and operated by private individuals.
– Charity: Incorporated or non-incorporated tax exempt body

and whilst i understand it is there in the help pages, they are often not accessed until after someone has signed up incorrectly therefore, maybe that statement can be added to the sign up page where sellers choose their legal entity


Hi @The_Little_Shop!

Thanks for sharing this! It is useful to have it in this particular thread so that others can share and it expands the information in the short opening post!



do you know what would be really great to support sellers would be access to a working seller support that could actually provide us with support instead of endless cut and paste e-mails full of fake apologies telling us that they cannot help does not matter what the case is about the response is always the same. basic business tools an ability to add information or edit information *ie currenlty we get daily threats from Amazon to make edits to products ie add colour add size etc then when we try to add the information that Amazon demands Amazon block us from adding the information.
Amazon is the most frustrating site that I sell on I get new products in weekly it is now 18 months since I have been able to add a new product that is not on the Amazon site yet I can only get products listed that other seller has listed before.


I feel it would be helpful if this was a bit clearer - spelling out unambiguously that you are only selling off you own property, not anything that you have bought to sell on. From comments on the forum, this is where a lot of people get confused.


I always check if it’s already listed on amazon and I am approved to sell the item before I buy from supplier - as I know if it isn’t already listed (or I am not approved) I may as well throw the money in the toilet (as far as selling it on amzn is concerned).


Agree 100%


Which they are.

The problem is, Amazon decided to give the same definition for the selling plan.

Going by the many threads on the forum, there is an influx of new sellers right now and most of them have no idea of the implications of running a business so it’s a very easy ( and sometimes costly) mistake.


They aren’t though
An individual or amazon is a private seller
A single person run business is a sole trader


I know that but I can see how easy is for a new seller to get confused when the name of the selling plan and legal entity is the same.
Nothing about Amazon is clearly defined and it can be completely overwhelming for some.


What would be even better is if the sign up process explained things clearly and made it easy for potential sellers to know exactly what the options are BEFORE they sign up.

Why doesn’t the sign up process have some simple questions which ask them about their intentions to sell and guides them to the right plan.

Eg. Question 1
Are you buying items with the intention of selling them on for a profit? Yes / No

Each question could include a brief description with an example. From there, depending on their answer, it guides them on to the next question, and so on until they get to the right plan for them. To say Amazon has so much online experience, they don’t seem to have a clue about even very basic things like this. It’s not rocket science.

Heck, if they want to pay me, I’ll be happy to give them advice about how to make the seller experience much better and reduce the amount of seller support time required after the event.

Why does Amazon always do things the wrong way round by failing to see issues and then (if they can be bothered) trying to fix it after the event?

Prevention is better than cure.

Why does Amazon fail to comprehend simple concept?


The problem is, these ‘quick tips’ are far too late, as by this time new sellers coming here to the forum have already signed up, and more often than not as the wrong legal entity.
There should be far more explanation on the first page, but all new sellers see is the huge orange ‘Sign Up’ button, which is obviously the first thing they do, and then they have also already signed up for the Pro selling plan, often without realising.

On a thread a while ago, someone even posted an idea for a flow chart, which I think is a great idea, much along the lines of the idea of basic yes/no questions suggested by Blackadder above, so new sellers cannot make mistakes.


The trouble is, as I said in my above post, a new thread is too late, as by the time they come to the forum they have already signed up, and usually incorrectly.
It is the sign up / registration page that needs to be clearer and more straight forward before even clicking a sign up button.