How to Reduce Your Amazon Shipping Costs?
Shipping costs can significantly impact your eCommerce business. Lowering these expenses increases profitability and helps you stay competitive. Below are some effective strategies to cut Amazon shipping costs, from utilizing Amazon’s programs to negotiating better rates with carriers.
Managing Amazon FBA Fee Increases
Amazon has recently raised fees for FBA storage and long-term inventory. These surcharges target inefficient use of warehouse space, affecting sellers with high storage utilization ratios and aging inventory. To counter these costs, it’s crucial to optimize your shipping strategies.
1. Use Seller Fulfilled Prime
Seller Fulfilled Prime lets you fulfill orders from your warehouse while maintaining the Prime badge. This ensures fast delivery without the high costs of FBA, giving you more control over your logistics.
2. Join Subscribe & Save
Amazon’s Subscribe & Save program boosts recurring sales and customer loyalty while offering discounts on shipping. To qualify, sellers must maintain a strong FBA account and meet performance criteria.
3. Utilize Multi-Channel Fulfillment (MCF)
Amazon’s MCF program allows you to fulfill orders from different platforms, like eBay and Shopify, using Amazon’s warehouses. This can streamline logistics and lower shipping expenses.
4. Ship in Bulk & Optimize Packaging
Shipping in bulk often leads to carrier discounts. Similarly, using larger packages helps take advantage of dimensional weight pricing, reducing costs based on volume rather than just weight.
5. Leverage Amazon’s Buy Shipping Discounts
Amazon’s Buy Shipping tool offers discounted shipping rates. Sellers can access lower costs by purchasing labels through Seller Central and selecting options with the Amazon Sponsored Discount badge.
6. Offer Free Shipping Smartly
Customers often abandon carts due to high shipping fees. Consider absorbing some costs or setting a minimum order value for free shipping to boost sales.
7. Work with Regional Carriers & Negotiate Rates
Local carriers like FedEx and UPS may offer lower rates than major services. Additionally, negotiating shipping costs based on volume can lead to better deals.
8. Use Flat-Rate Shipping & USPS Priority Mail
Flat-rate shipping simplifies costs, offering predictable pricing for customers. USPS Priority Mail is another affordable option with fast delivery times.
9. Utilize Amazon’s Discounted Shipping Supplies
Amazon provides sellers with discounted packaging materials, helping reduce fulfillment costs while ensuring safe delivery.
10. Consider Passing Shipping Costs to Customers
Charging a small shipping fee or introducing minimum purchase thresholds for free shipping can offset your expenses while maintaining profitability.
11. Use Third-Party Fulfillment Services
Companies can help sellers optimize inventory management, reduce return rates, and secure lower shipping rates by bundling orders and utilizing bulk shipping.
12. Analyze Amazon’s Shipping Reports & Credits
Regularly reviewing Amazon Seller Central reports can highlight areas to cut costs. Additionally, sellers meeting tracking accuracy requirements may qualify for Amazon’s shipping credits.
Final Thoughts
Reducing Amazon shipping costs is key to maintaining profitability. By leveraging Amazon’s programs, negotiating with carriers, and streamlining logistics, you can lower expenses while improving customer satisfaction. Research your options, implement smart shipping strategies, and watch your business grow.
