Registering a seller on Amazon: for an individual or a company? What are the pros and cons?
Before you start selling on Amazon, every entrepreneur faces a key question: should you register an account for an individual or open it for a company?
My name is Vyacheslav Molodetsky, I’m a marketer at TimePro Global, a company specializing in providing services for Amazon sellers worldwide. In this article, we’ll take a detailed look at the pros and cons of both options to help you make the right choice for your business.
Let’s take a look at the first registration option – “Individual”
Let’s start by registering with Amazon as an individual or sole proprietor. This is the easiest and fastest way to start your business. You won’t have to incur significant costs and there is no need to register a legal entity. All you need is a passport and a few completed documents. Sounds pretty appealing, doesn’t it? Let’s get to the bottom of it!
Pros:
- Quick Startup. Registering as an individual allows you to quickly start selling on Amazon without too much bureaucracy.
- Minimal costs. No need for significant expenses to set up and maintain a company.
- Ease of maintenance. No requirements for filing annual reports, bookkeeping, or additional legal fees.
Cons:
- Personal liability. All the risks and liabilities of the business fall on you personally. In case of problems or debts, you are responsible with your property.
- Lack of loyalty. Amazon and customers perceive you as an individual, which can diminish trust and professional image.
- Tax issues. Maintaining tax records for an individual can be complicated and cause errors or overpayments.
- Limited opportunities to attract investment. Your business may be taken less seriously, making it difficult to sell an account or attract investors.
- Difficulties scaling. As your business grows, you may need to convert to a legal entity, which can require additional cost and time.
- Fewer opportunities for business partnerships. Some vendors and partners may prefer to partner with companies rather than individuals, which can limit your options.
Consider the second registration option – “Company”
Now let’s consider registration through a company, whether it is an LLC, Corporation or Partnership. It is worth noting right away that the advantages of this option are much greater!
Pros:
- Company image. Your business is perceived in a more professional manner, inspiring more trust from customers, partners and investors.
- Tax flexibility. The tax system for companies is more transparent and it will be easier for you to optimize your tax liabilities.
- Lack of personal liability. A company protects your personal assets. In case of business problems, your personal finances will remain untouched.
- Ability to operate under an FBA. Registering through the company gives you access to the Fulfillment by Amazon (FBA) program, making it easier to store and ship items.
- Attracting investment and selling the business. A company can be viewed as an asset, making your business more attractive to potential investors and buyers.
- Visas and Opportunities. Incorporating a company can help you obtain work and investment visas, expanding your opportunities in international markets.
- Long-term outlook. It’s easier for a company to scale and grow, which is ideal for long-term goals.
- Intellectual property protection. A company can register trademarks, patents and protect the intellectual rights to its products or technology.
Cons:
- Expenses. There are additional costs to maintaining a company: taxes, accounting, registration fees, etc.
- Administrative duties. Doing business through a company requires more complex documentation and bookkeeping, which may require either time or hiring specialists.
To summarize:
To conclude, both registration options have their advantages and disadvantages. Registering as an individual is an excellent choice for a quick start with minimal costs, but it limits scalability and carries personal liability risks. Incorporating through a company, on the other hand, requires a large investment and complex administrative work, but offers far more opportunities for long-term growth, protects personal assets, creates a professional image and makes it easier to attract investment.
If you are aiming for serious growth on Amazon, company registration will be a more reliable and promising solution. It will open new horizons for you, help you avoid many risks and build trust from customers and partners.
Don’t want to dive into the details of company registration? TimePro Global specialists are always ready to help you in this matter!
Want to register a company in the USA to work with Amazon, but don’t want to understand all the details yourself? Contact TimePro Global, we will be happy to help you!
