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How to reduce your Amazon shipping costs

Shipping costs play a significant role in attracting and retaining eCommerce customers. By cutting your logistical expenses, you can increase your profits and differentiate your products from your competitors, which helps you stand out in a crowded market.

Read on to learn some top tips to reduce your Amazon shipping costs, from leveraging Amazon’s programs and services to negotiating with carriers and passing on costs to customers.

Mitigating Amazon FBA fee increases

Amazon recently introduced fee increases for FBA storage utilization ratios and inventory aging. These aim to address the inefficient use of Amazon’s warehousing for unsellable goods, which monopolize space and eat into working capital via holding costs. The most notable changes are summarized as follows:

  • Sellers with a high inventory cube (which is the total available space they use expressed as a percent) relative to their recent weekly sales face a new storage utilization surcharge.
  • Amazon has increased the surcharges applied to inventory stored for 271 to 365 days.
  • Amazon introduced inventory surcharges for goods stored for 180 to 270 days, except for products in the apparel, shoes, bags, jewelry, and watches categories.

To minimize the impact of these fee increases, it’s essential to reduce your shipping costs. Review and incorporate the following strategies to lower your logistical expenses and stay ahead of Amazon’s wide-reaching changes.

To learn more about Amazon seller fees, check out MyFBAPrep’s Guide to Amazon Seller Fees.

1. Sign up for Amazon’s Seller Fulfilled Prime program

Amazon’s Seller Fulfilled Prime program enables you to fulfill orders and deliver them directly to domestic Prime customers from your own warehouse. Showcasing the Prime badge on your Amazon listings guarantees two-day delivery at no extra cost for Prime customers. This saves money on shipping costs and increases your sales by offering fast and free shipping. Additionally, Amazon provides the necessary transportation solutions to meet the high standards of Prime members.

This perk is exclusive to the Prime program though, so, if you aren’t already, consider signing up. To enroll, you must meet specific requirements, such as providing accurate tracking information and storing your products in a secure facility.

2. Enroll in Subscribe & Save

Amazon offers a shipping subscription program designed for eCommerce retailers who ship a high volume of packages. Sellers can enjoy several benefits through the program, including:

  • Consistent sales: Regular purchases and 20% of annual revenue
  • Customer loyalty: Repeat customers and increased consumer loyalty with minimal investment
  • Engaged customers: Subscribers are more likely to purchase additional items
  • Increased visibility and reach: Priority placement and enhanced custom search filters in a dedicated storefront

To participate in the Subscribe & Save program, sellers must meet the following eligibility requirements:

  • Seller feedback rating of 4.7 or higher
  • Well-performing FBA account with strong sales
  • Active FBA account for at least three months

The discount you receive from participating in Subscribe & Sale will depend on the number of packages you ship, so be sure to research the program and compare its rates to those of other carriers.

3. Leverage Amazon’s Multi-Channel Fulfillment program

If you sell your products on multiple sales channels like Amazon, eBay, and your own website, Amazon’s Multi-Channel Fulfillment (MCF) program can help you save on shipping expenses and increase efficiency. It allows you to fulfill orders from various platforms through Amazon’s fulfillment centers.

Obviously, you’ll need a seller account on Amazon to participate in the program. However, you also have to meet certain criteria similar to those of Seller Fulfilled Prime, including providing accurate tracking information and ensuring your products are stored in a secure facility.

4. Ship your products in bulk

Shipping products in bulk enables you to take advantage of carrier volume discounts when you ship a large volume of products simultaneously. So, consider sending your products in large batches rather than individual ones.

When shipping in bulk, use sturdy packaging materials to ensure your products arrive at their destination in good condition.

5. Send larger packages

Larger packages let you leverage dimensional weight pricing, which slashes your fulfillment expenses because you pay based on the package size, not only its weight.

You should use larger boxes or pack your products to maximize the package’s size. Like with bulk shipments, use sturdy packaging materials to ensure your products arrive at their destination in optimal condition.

6. Capitalize on Amazon’s Buy Shipping discounts

Amazon introduced a Sponsored Discount option that allows you to purchase shipping labels through Buy Shipping at a discounted rate. You can access these cost savings by logging into your Seller Central account and navigating to the Buy Shipping page.

Look for the blue “Amazon Sponsored Discount” badge to find the shipping methods with discounted prices (they’re listed next to the badge).

The number of labels you purchase determines how large a discount you receive, so research the program as well as the rates of other carriers.

7. Take advantage of Amazon’s free shipping options

Research has shown time and time again that shipping costs are one of the biggest barriers to completing a purchase online. Approximately 28% of online shoppers will abandon their purchase if they encounter unexpected shipping costs during checkout.

Offering fast and free shipping can have a significant impact on your business:

  • Increase conversions and reduce cart abandonment
  • Boost customer satisfaction and loyalty
  • Raise the average order value

If you don’t offer free shipping, there’s a good chance that customers will go to a competitor who does.

One of the easiest ways to offer free shipping to your customers is through Amazon FBA. With Amazon’s fulfillment program, you can offer fast and free shipping without having to worry about the logistics of shipping yourself.

8. Partner with regional carriers

Opting for regional carriers like FedEx and UPS is a cost-effective solution for your shipping needs, as they often provide lower rates than their competitors.

Be sure to compare the rates of regional carriers with those of larger ones to find the best deals. Further, regional carriers may have varying delivery times and coverage areas, so it’s crucial to evaluate your options carefully and select the one that meets your requirements.

9. Negotiate with carriers for better rates

Related to the previous strategy, you can often secure lower shipping rates by negotiating with carriers based on the volume of packages you ship, the size of your packages, and other factors.

For the most fruitful negotiations, contact carriers directly and discuss your shipping needs and goals. Or, you may consider using a third-party service to negotiate rates on your behalf.

10. Adopt flat-rate shipping

Flat rate shipping allows you to charge a fixed shipping fee, regardless of the weight or size of the package. Flat-rate boxes and envelopes take advantage of dimensional weight pricing to reduce your shipping costs.

This can be an effective measure to attract customers and increase sales, as many buyers are willing to pay a flat rate for shipping in exchange for the convenience and reliability it provides.

11. Utilize USPS Priority Mail

USPS Priority Mail is a cost-efficient solution for shipping packages with fast delivery times and competitive pricing.

Before embracing this service, however, be sure to research the delivery times, shipping restrictions, and other key factors to ensure it’ll accommodate your needs.

12. Assemble packages with Amazon’s supplied shipping materials

Amazon offers a variety of shipping supplies at a discounted rate, including boxes, envelopes, and packing materials. This can save on dunnage expenses, but be sure to look into the restrictions and guidelines for each carrier to ensure your packages are eligible for the discounted rate.

13. Pass on some of your shipping costs to customers

Having customers shoulder some of your shipping costs will reduce your logistical expenses and increase profitability.

You could consider charging a small shipping fee either as a flat rate or based on the weight of the package. When shipping costs are passed to customers, clearly communicate the prices and allow buyers to choose their shipping method.

Alternatively, you can offer free shipping for orders over a certain amount, which encourages customers to spend more.

14. Contract third-party fulfillment services

Third-party fulfillment services like Fulfillment by Amazon (FBA) can slash your shipping costs and boost efficiency. These providers handle the storage and shipping of your products, freeing up time and resources for your business.

When considering a third-party fulfillment service, research their fees, restrictions, and delivery times to locate the best one for your business.

Looking for ways to cut your FBA fees? Learn more in MyFBAPrep’s guide to understanding and reducing your Amazon FBA fees.

15. Choose the most economical shipping service

To find a cost-effective shipping service for your business, look into different shipping methods and compare their rates and benefits. Consider the delivery times, shipping restrictions, and other factors that affect your operations.

16. Analyze Amazon’s Seller Central shipping reports

Amazon’s Seller Central reports provide detailed information on your shipping expenses and help you identify opportunities to lower costs.

To use this tool, log in to your Seller Central account and access Shipping Reports. There, you’ll find valuable information such as the cost per shipment, the cost per unit, and your total shipping costs.

17. Make use of Amazon’s shipping credits

Amazon offers shipping credits to eligible sellers who meet specific criteria, such as providing accurate tracking information. Applying these credits can lower your shipping expenses and boost your profitability.

It’s essential to monitor the requirements for these shipping credits regularly to ensure you remain eligible and can take advantage of the cost savings.

How MyFBAPrep lowers Amazon shipping rates for sellers

MyFBAPrep can help sellers reduce Amazon shipping fees in several ways, such as:

  • Optimizing shipping methods: MyFBAPrep finds the most cost-effective shipping methods for products by comparing rates among different carriers and advising on the best options.
  • Managing inventory: MyFBAPrep tracks and organizes items in Amazon warehouses, reducing the need for additional storage space — and the associated fees.
  • Reducing returns: By providing professional and efficient preparation services, MyFBAPrep can cut the number of returns, in turn significantly lowering shipping expenses.
  • Bundling products: MyFBAPrep can bundle multiple products into one shipment, which lessens the number of packages that sellers have to ship.
  • Offering competitive rates: MyFBAPrep enjoys access to bulk shipping rates and can pass on these savings to customers, helping sellers diminish their logistical costs.

Incorporating MyFBAPrep’s services can streamline your shipping processes, save on fees, and increase your profits in the long run.

Wrapping up — Take steps to slash your Amazon shipping costs

By taking advantage of Amazon’s programs and services along with the expertise of a third-party fulfillment service, you can improve your logistics and increase customer satisfaction to drive your business forward.

Reducing your Amazon shipping rates is essential to boost efficiency and grow your brand. So, take the time to research your options, find the best solutions for your business, and start paying less for your Amazon shipments.