Amazon Shipping Cost Reduction: 7 Proven Strategies to Cut Expenses & Boost Profits
For Amazon sellers, shipping costs are one of the largest variable expenses eating into profitability. Whether you’re using FBA or fulfilling orders yourself (FBM), those fees can quickly turn a best-selling product into a break-even nightmare.
But what if you could turn logistics from a cost center into a competitive advantage? Reducing your shipping expenses isn’t about cutting corners, it’s about working smarter.
This guide reveals seven proven strategies to optimize your shipping operations, slash unnecessary costs, and keep more of your hard-earned revenue.
Table of contents
- Amazon Shipping Cost Reduction: 7 Proven Strategies to Cut Expenses & Boost Profits
- 1. Master the Art of FBA Prep & Packaging
- 2. Optimize Your FBA Shipment Strategy
- 3. Leverage FBA Discounted Shipping Rates
- 4. For FBM Sellers: Negotiate with Carriers & Use Software
- 5. Implement a Smart Repricing Strategy
- 6. Audit Your FBA Fees Regularly
- 7. Reduce Returns to Cut Double Shipping Costs
- Conclusion: Turn Logistics into Profit
- Related Posts
1. Master the Art of FBA Prep & Packaging
Amazon charges FBA fees based on a product’s size and weight. The smallest reduction can sometimes move your product into a lower, cheaper fee tier.
- Right-Size Your Packaging: Use the smallest possible box or poly mailer that safely fits your product. Avoid excessive “dead space,” as you pay for every cubic inch.
- Use Lightweight Materials: Switch to lighter-weight packaging materials without compromising protection. Every ounce saved reduces shipping costs to the FC and your monthly storage fees.
- Check Dimensional Weight (DIM Weight): Amazon calculates fees based on dimensional weight (length x width x height / divisor). A small package reduction can lead to significant savings over thousands of units. Use a DIM weight calculator to model different packaging options before you ship.
2. Optimize Your FBA Shipment Strategy
How you send inventory to Amazon’s fulfillment centers has a major cost impact.
- Utilize Inventory Placement Service (IPS) Wisely: With the default “Distributed Inventory” option, Amazon splits your shipment to multiple FCs, charging you for the convenience. For large shipments, it can be cheaper to decline this service and ship everything to a single FC yourself, even with higher upfront shipping costs. You then avoid Amazon’s internal placement fees. Run the numbers both ways!
- Choose Partial Plans over Full Truckloads: When creating your shipment, you often have the choice to send a full pallet or a less-than-truckload (LTL) shipment. Sometimes, splitting into smaller, partial pallets can be more cost-effective than a full pallet due to how fees are calculated. Always compare the “Summary of Charges” for different options.
- Consolidate Shipments: If you have multiple products, try to ship them together in larger, less frequent shipments instead of many small ones. This reduces your per-unit shipping cost.
3. Leverage FBA Discounted Shipping Rates
When you use Amazon’s Partnered Carriers (like UPS) within Seller Central to send inventory to FBA, you get access to heavily discounted rates that are far cheaper than what you could get on your own.
- Always “Buy Shipping” through Seller Central: Never book shipping directly with the carrier for FBA shipments. The discounts are substantial and automatic when you create your shipment plan within Amazon.
4. For FBM Sellers: Negotiate with Carriers & Use Software
If you fulfill orders yourself, you have more control, and more responsibility, for securing the best rates.
- Negiate Volume Discounts: If you have consistent shipping volume, contact carriers (USPS, UPS, FedEx) directly to negotiate custom rates based on your monthly volume.
- Use Shipping Software: Services like ShipStation, Pirate Ship, or Shippo automatically compare rates across carriers for every order and provide commercial-based pricing (discounts), saving you time and money.
- Choose the Right Service: Don’t default to the fastest shipping method. For non-urgent orders, a slower, ground service can cut costs in half without significantly impacting customer satisfaction if you set clear handling time expectations.
5. Implement a Smart Repricing Strategy
Your shipping cost strategy should be tied to your pricing.
- Factor in Shipping for FBM: When using automated repricers, ensure your minimum price floor includes the full cost of goods AND shipping. Don’t get into a race to the bottom where you win the Buy Box but lose money on every sale.
- Promote Free Shipping Thresholds: Encourage customers to add more items to their cart to qualify for free shipping. This increases your average order value and can make the shipping cost a smaller percentage of the total sale.
6. Audit Your FBA Fees Regularly
Amazon isn’t perfect. Sometimes your products can be misclassified into the wrong size tier, leading to overcharging.
- Use the FBA Revenue Calculator: Regularly check if your products are in the correct size tier. If you find an error, you can request a re-measurement and reimbursement for past overcharges.
- Check for Reimbursable Errors: Amazon owes sellers money for lost, damaged, or incorrectly processed inventory. Use tools like Helium 10’s Profitability or SellerBoard to automatically audit your account and file claims for these reimbursements.
7. Reduce Returns to Cut Double Shipping Costs
A return means you paid to ship it to the customer and often again to get it back.
- Accurate Listings: Use clear, high-quality images and detailed descriptions to set correct expectations and reduce “item not as described” returns.
- Bundle Products: Bundling complementary items can reduce the likelihood of returns because the customer is getting a complete solution.
- Quality Control: Ensure your products are durable and well-made before they leave the warehouse to avoid defective returns.
Conclusion: Turn Logistics into Profit
Shipping cost reduction is an ongoing process of measurement, optimization, and negotiation. By treating it as a key part of your business strategy, not just an inevitable expense, you can uncover hidden profit and gain a serious edge over competitors who ignore it.
Start with one strategy. Audit your fees, repackage a best-seller, or compare shipment options. The savings you discover will directly boost your bottom line.
Need help untangling the complex world of Amazon fees and logistics? Infobeam Solution’s experts can conduct a full fee audit and create a customized shipping strategy to maximize your profitability. Schedule a free cost-saving analysis today! Call us: +91 96545 53640 or email sales@infobeamsolution.com.