Can I Register As Individual Seller And Be Taxed As S Corp On Amazon?

A mutual question I become asked from new sellers, is about what blazon of Amazon seller account they should setup. Specifically, they ask if they should setup an private seller account or a professional seller account.

Each blazon of selling account has its respective benefits, and information technology really depends on your specific needs. To effigy out what blazon of Amazon seller account you need, let's showtime by looking at how Amazon describes each account type:

The Amazon Individual Seller Account

Here's how Amazon describes the individual seller business relationship option:

"The Private selling plan is for sellers who don't need access to inventory tools and reports for volume selling. Under the Private selling plan, you don't pay a monthly subscription fee. You pay a per-item fee in addition to applicative fees."

The Amazon Professional Seller Account

Hither's how Amazon describes the professional seller account option:

"In the Professional selling plan, you pay a nonrefundable monthly subscription fee regardless of whether you list or sell anything. You lot don't pay a per-detail fee when an item sells. All other fees are charged every bit applicable. The Professional selling plan gives you lot 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."

Fundamental Differences betwixt the Amazon Private Seller Account and the Amazon Professional person Seller Account

Below is a chart that shows the primal differences betwixt the 2 account types:

The above chart is straight from Amazon, and does a nice job of comparing the two account types. That said, there's a lot here, and it'southward important to drill downward to the details that are about of import:

The Amazon professional seller fee rings in at $39.99 per month. However, that $39.99 monthly fee removes the private seller fee of $0.99 per item. So, if you are selling more than than 40 items it about always makes sense to get the professional person seller account.
Only Amazon professional sellers are eligible to have their items featured in the "buy box." The buy box is the featured seller on a listing within Amazon. For example, on this listing "Windy Castle Gift Shop" is the seller in the buy box:

This means that if the seller clicks the "add to cart" or "buy at present" buttons (red pointer), they volition be purchasing from Windy Castle Gift Store, as they are the seller in the buy box. If yous are selling this detail and are not in the purchase box, you lot will show up as ane of the sellers featured below the buy box, or in the list where it says used & new (37) past the blue pointer. As you can run across if you aren't in the buy box it's a flake more difficult for customers to purchase from you.

Only professional seller accounts have the power to have sales tax collected on items they sell. Sales tax for FBA sellers is a bit of a tricky issue, but if you desire to collect sales tax yous need the professional seller account.
Amazon requires an boosted level of approval to sell in sure categories on the platform. Below are examples of categories that crave you to take a professional person seller business relationship to seek approval:
- Automotive & Powersports
- Jewelry
- Watches
- Sports Collectibles
- Video, DVD, & Blu-ray
- Collectible Coins
- Entertainment Collectibles
- Fine Art
The final major divergence that I will betoken out is the ability to use product data feeds, and granting access to other users. These features are only available on the professional selling program. If you want to employ 3rd party apps and tools, and then you will need a professional person seller account. In my case, the tools that I employ to assistance run my business organisation require me to be signed up through a professional person seller account.

Which Amazon seller account blazon is best for you lot?

The private Amazon seller account is best for someone who:

Wants to get their feet wet selling on Amazon and keep costs as low as possible at the beginning
Is selling less than 40 items per month
Doesn't have the need for the additional features of the professional seller account.

The professional seller business relationship is best for:

Any sellers selling over twoscore items per month
Whatsoever seller wanting to collect sales tax on their items
Whatever sellers who want to apply 3rd political party apps and tools
Sellers who desire to exist displayed in the buy box
Sellers who want to sell in sure restricted categories

Can I starting time off as an private seller account and so switch to a professional person seller account later?

Yes you lot tin can switch at any fourth dimension you would like.

This is the route I took when I commencement started selling on Amazon. When I was doing it function-time as a hobby I used an individual seller account. And so, once I was selling over forty items per month, I upgraded to the professional person seller account.

Here's how to upgrade your Amazon seller account:

Login to your Amazon Seller Account
Scroll to the bottom of the page and click Account Info under Settings
In the Your Services section click Manage
Click Upgrade adjacent to the business relationship blazon

Note: If you want to switch from a professional person seller business relationship to an private seller account, steps 1 to 3 are the same, and in step 4 click downgrade.

Conclusion:

This post walks through the main decision factors that I would look at when determining which account type is correct for yous. If you are in dubiousness as to which selection is right for you, and you lot are selling less than twoscore items per month, I'd start off with the private seller account. So, once you are selling 40 items per month or need boosted features, upgrade to the professional seller account.

Want to learn more about getting started selling on Amazon? Here'southward a general overview of my recommendations for getting started selling on Amazon.

You can likewise take my free email grade where I share some of the tips I've learned from operating my own multi-million dollar business organization to assistance yous get your first sale on Amazon.