So you have decided that it is now time to start selling on Amazon, Great! you are now on your way to becoming an Amazon Entrepreneur. This is not going to be an easy get rich quick scheme. Trust me it’s not, but if you are determined to take the right steps. Put in the right amount of effort, you can become successful. Having a rewarding eCommerce business with the ease of having inventory stored at other locations. With a huge pool of potential customers right at your fingertips. Makes Amazon the best website to sell pretty much anything on. In this article, I am going to show you how to first set up your Amazon seller account. While highlighting some crucial information to help you get started.
Things you need before you get started
Before you create your sellers account there are a few things that you will need or should have already prepared.
- Your legal business name (You will need to have a DBA or registered business in your state) and Contact information.
- An email that you want to be linked to your seller central account. this can be a personal email. I do recommend setting up a branded or business email to keep everything separate.
- Credit card with a valid billing address This will be used to charge your account for billing purposes.
- A phone number that is easily reachable. This is used during the registration process. The phone number will also be used for 2 step verification [so use a phone that can receive text messages and is always on you.]
- Your tax identity information.
Legal Business Name
Amazon is going to require a registered business name for you to set up the account. Remember to register this name and also obtain your EIN from the IRS. This tax information is going to be needed before you can create your amazon sellers account. You can register as a sole proprietorship or LLC. Choosing a business structure can be confusing. So make sure you know the tax implications and fees for the structure that you want to choose. Also, depending on the type of business structure that you will be using. It will dictate the type of tax information needed.
This is important how else are you going to be able to receive and make payments for your products and other fees associated with selling on Amazon. When creating an account, Amazon will ask you for a card number to keep on file along with the business address and bank account/routing number so be prepared to have this information available when you go and create an account.
(If you created a new bank account some banks will take a few weeks before they issue your debit or credit card, so keep that in mind because you are going to need the card information)
If you are just starting your own business I would advise setting up a business bank account. This will make it easier keeping track of all the incoming and outgoing of your payments. You can use your personal account if you plan on only selling a few items. But it will make things easier, in the long run, to already have an separate account.
Well, this is obvious but Amazon will want to know who you are before they allow you to sell. You should have an email account that you are going to use for your business. Make sure that your address matches up with what you have registered.
Amazon now requires you to set up two-step verification, so it is important to set this up on your mobile phone. It will make it easier when you try to log in on a new device like when working from home or checking sales on someone else’s computer. Amazon will send you a code to verify that it is you trying to log into your account and if you didn’t set it up on your mobile phone it will make it harder for you to access that account.
Yes, you or your business will have to submit your tax information to Amazon in order for them to create your account. You are going to need a W-9 or W-8BEN, Social Security Number (if you are filing as a Sole Proprietorship) or your copies EIN ( Federal Tax ID number)
Amazon reports tax information to the IRS. They are required by law to do so. But it is your responsibility to pay and submit your tax information.
Choosing Between Individual and Professional Sellers Account
I previously wrote an article on the difference between individual and professional seller account. I would have a look at that article to help you decide on which account type to use.
Here is a Quick overview to help with you decision:P
Professional Seller account
- Monthly Fee of $39.99 a Month
- Create New Product Pages
- Manage inventory feeds through bulk uploads (spreadsheets)
- Ability to set your own shipping rates
- Make listing inactive go on vacation mode
- Buy Box Eligible
- Grant access to other users
Individual Seller Account
- $0.99 Fee per Item Sold
- Create New Product Pages
- Amazon sets shipping rates
- NO Buy Box eligibility
- Can’t grant access to other users
- Can go on Vacation mode
Individual sellers accounts are good if you are just starting out and not sure if you are going to be doing this in the long term. There is a 0.99 fee for each transaction so if you are selling less then 40 units a month then this option makes sense. But if you are selling more then 40 units per month then upgrade to the professional account.
The two most common business structures are LLC and Sole Proprietorship. I am not going to go into everything in this tutorial but will give a quick overview to help you decided on your business structure.
Read here if you want more information on choosing a business structure.
Due to the lower cost of setting up a sole proprietorship makes it perfect for starting out. Most entrepreneurs will start with a sole proprietorship until they make enough money to set up an LLC.
Basically sole proprietors are taxed as a self-employed individual. The income of the business is considered your personal income for tax purposes. All Liability of the company falls onto you.
The only thing you will need to set up is a DBA (Doing Business As) with your local clerk’s office. Fee’s to set up a DBA vary depending on where you live. For the most part, you can register your DBA with the local clerk’s office for under $30.00. Which is less than the monthly fee to set up an Amazon account. Setting up a DBA will also allow you to open a business account at most banks. Which I recommend doing to keep all of your money for your business separate from your personal finances.
Limited Liability Company (LLC)
A Limited Liability company works as its own tax identity. So all income and expenditures are base on what the company makes. Also, the Liability of the company falls onto the company. This keeps your personal finances safe.
There are fees and to set up and you are expected to pay the IRS around $800 dollars (in California) in tax’s even if you don’t make a sale. The amount of taxes depends on the states that you are in. So check with your local clerk’s office. This is why most people start out as a sole proprietor until they have enough cash floor to cover those charges and more.
There are other forms of business structures such as partnership and corporation. But most companies selling on Amazon will be set up using one of the two business structures listed above.
How to Set up your Amazon Seller Account
The first step in creating a Amazon seller account is to go to www.amazon.com, from there you need to scroll to the bottom of the page. In the footer section there is going to be 4 columns get to know us, make money with us, Amazon payment products and let us help you. Underneath make money with us you will find Sell on Amazon, click that and it will take you to the sellers page where you will be able to create your sellers account from there.
Here is where you enter you legal business name, think of it as who will be paying the taxes. ( Please note this won’t be the name of your store. That is in the next section. Legal business name will be used for tax purposes only.) If you’re setting up your Seller account as an individual, use your name and tax identification information or if you set up a DBA use that. Otherwise, stick with your business’s name and information.
Amazon will be giving you a w-9 on the tax information section and verify with the IRS. If you give any wrong information you won’t be able to open a seller central account.
Your address will by default be used for billing information and returns will be sent to this address. if these addresses are different I recommend just entering your billing address. you can change your return address later in the settings tab.
Business Display Name:
This is what the customer is going to sees. So make sure to display the business name / Brand you want to display to your customers.
You do not need a website to sell on Amazon especially if you are doing retail arbitrage. If you are doing a private label, it might be a good idea to have an eCommerce site running along with your Amazon store. If you don’t have the funds now to host a website you can buy a domain name for cheap with Namecheap.
I would enter your personal mobile phone number and not your companies phone number. Amazon has two-step verification when logging into the account from an unknown computer. Which they send a text or call with a PIN number. You need this PIN number in order to access your account. So if you aren’t at work and checking your daily sales it’s best to use a phone number that you always have on you.
Even if you pick a sole proprietor it is recommended to create a whole new business bank account( Don’t put funds into personal account). This helps keep all of your funds for the business in a single location making taxes a little easier to file.
You can always update at a later date, but changing bank account information takes a little time for Amazon to verify. So it is much easier to enter your bank account information the first time.
Depending on the type of business you will be running dictates what you will be entering here. Sole proprietors/individuals will use their Social Security Number instead of an Employer Identification Number (EIN) as their tax identification number.
Enter the need information. Amazon will then produce a W-9 form for you. This process is generally quick and Amazon will validate your information with the IRS in minutes.
The last step is some general questions about product information. You are able to skip this step and just jump straight into your new seller central account.
That’s it you are in. Now I would take some time now to get familiar with seller central look at the different tabs and sections. the next step will be to create your first product listing.