The Cheapest Way to Ship Amazon Orders

For most ecommerce merchants who sell on Amazon, their biggest expense isn’t inventory, design, or marketing—it’s shipping. Fortunately, there are a wide variety of shipping solutions that work with Amazon to fulfill orders. But which one offers the cheapest way to ship Amazon orders?

In this guide we’re going to try and answer that question by looking at factors that affect the cost of shipping as well as what it costs to ship with some of Amazon’s top partners. By the end of this guide you should know exactly which shipping service to use to ship your products cheaply and efficiently. Let’s get started.

Factors That Impact the Cost of Shipping

Regardless of the shipping service you use, what you are shipping will affect the cost more than anything else. Here are the factors shipping services consider when determining the price you will pay:

Shipping Volume

The more you ship, the lower the price you’ll pay to ship each individual item. This is just simple economics: if you keep giving your shipping service business, you have more leverage to negotiate a cheaper per-item rate. So if you’re a merchant who ships a lot of product on a monthly basis, you’ll likely have access to lower rates than merchants who only ship on occasion.

Shipment Size

It almost goes without saying that smaller and lighter items are cheaper to ship than larger, heavier items. In order to have an accurate idea of the cost associated with shipping your products, make sure you have a precise measurement of the weight and dimensions of your products. It may also help to invest in a postal scale.

Packaging

The size and weight of your product will have a direct impact on the type of packaging you need. Smaller items may be able to fit in an envelope, while larger ones will require boxes. What’s more, if you’re shipping delicate products, you’ll also need to invest in packaging materials like foam and paper cushioning.

Cargo

Another factor that will impact the cost of shipping is the type of product. For example, most shipping services charge an extra fee to ship hazardous materials. Fragile objects might call for additional packaging materials, double-walled boxes, and other materials to cushion them during shipping. Products that can expire, such as food items, need to be insulated when shipped, which also costs more.

Time of Delivery

Need a product to reach your customers in under 24 hours? Be prepared to pay a premium. Generally, the faster you need your product to reach its destination, the more money you will have to pay. Standard transit time, which is usually between one and five business days, is the only shipping speed which doesn’t require an additional fee.

Shipping Method

Having your product shipped via ground (truck) will be cheaper than having your product loaded onto a boat, train, or airplane to reach its destination.

Distance Being Shipped

If you are loading your product onto a boat, train, or airplane, it’s likely being shipped a greater distance, which is why you’ll pay extra. Most shipping services will offer a ballpark estimate of how much it will cost to ship to a specific destination depending on where you are shipping from.

Pickup Location

Pickup and drop-off locations are where you bring your products when you want them to be shipped. The most convenient option is to have your products picked up at your place of business, or stored in a warehouse operated by your shipping provider. However, this will cost more than if you just deliver your shipments to a drop-off location operated by your shipping provider.

Claims

If you ship often, you’re likely to face freight claims. A freight claim is a legal demand by a shipper or consignee to a carrier for financial reimbursement for loss or damage of a shipment. Different shipping services will have different claims processes, with different costs associated with them. We advise familiarizing yourself with the claims process of your shipping provider so you know what to do if something goes wrong.

Insurance

Most any shipping provider will offer you the opportunity to buy insurance on your shipments. The type of insurance you can purchase depends on the value of the items you’re shipping, your shipping origin and destination, and the shipping method of transportation.

The most common insurance option is liability insurance, which will cover the goods being shipped and the cost of shipping up to $100 in the event the shipment is damaged or lost. If you’re shipping internationally, we also advise investing in international shipping insurance.

There are also third-party options when it comes to shipping insurance, including ShipWorksShipsurance, and Parcel Insurance Plan (PIP). To know what your insurance costs may be, determine your business’s policies regarding shipping beforehand. What areas are you willing to ship to? Which products will you ship? Knowing the answers to these questions will make it easier to determine your cost.

Other Fees

Some services charge more to accept returns. Others have additional charges to integrate their software into your ERP system or other business systems so that you can monitor shipping and customer service.

The 3 Cheapest Ways to Ship Amazon Orders

Now that you know the factors that impact the cost of shipping, the next step is to factor them into your shipping needs. Are you a frequent shipper? Do you ship a lot of heavy items? Answering these questions will make the next step a lot easier: picking the carrier that offers your business the cheapest way to ship Amazon orders.

To make our determination, we looked at all the different shipping carriers Amazon works with and evaluated them on the aforementioned factors. Here’s who we recommend as the cheapest carriers for shipping Amazon orders.

The Best Overall Option: Amazon FBA

Fulfillment by Amazon (also known as Amazon FBA) is the most obvious option, but it is also arguably the best option. Of the top 10,000 sellers on Amazon, 66% use FBA, and Amazon’s extensive warehouse system and sophisticated ecommerce engine make it easy to pick, pack, and ship.[1]

If you work with FBA, you’ll store your inventory in Amazon’s fulfillment centers around the world and agree to accept returns and ship replenishment stock at Amazon’s request.[2] When a customer places an order, Amazon handles packaging and shipping the product to the customer.

When using FBA, you’ll be responsible for two different types of FBA fees:[3]

  • Amazon Fulfillment Fees: Amazon charges fees based on the weight and size of your products, to pick, pack, and ship your products, and handle customer service inquiries. This fee can be as low as $2.41 per product for smaller items but can increase significantly for larger or oversize items.
  • Monthly Storage Inventory Fees: If you use Amazon’s warehouses to store your inventory, you’ll be charged a monthly fee based on the amount of storage space you’re using.

FBA uses a pay-as-you-go structure, so you’ll only pay for the number and weight of units you actually store and ship to customers. Once Amazon ships the order, they’ll collect payment from the customer, deduct their fulfillment fee as a percentage of the total sale based on the weight and number of items, and deposit payments directly into your bank account every 14 days.

Beyond the cost, FBA is also extremely easy to use. Instead of handling the logistics of monitoring and fulfilling orders, tracking shipments, and handling customer service issues yourself, all you have to do is send your inventory to Amazon and let them handle the rest. Other benefits of FBA include:

  • Automatic Prime Eligibility: When you manage your products through Amazon FBA, your entire inventory automatically becomes Prime eligible—a benefit that regularly leads to customers choosing your listing first. With FBA, you must have high volume and outstanding sales metrics to qualify as a Prime seller.
  • Free Super Saver Eligibility: All products that FBA manages are eligible for Free Super Saver Shipping on orders over $25. These listings benefit from better placement on the Amazon site than seller-fulfilled listings.
  • A Single Inventory Pool: You can use Amazon FBA to fulfill orders not just from the Amazon Marketplace, but from your own ecommerce platform or other third-party sites, as well. As a result, you’ll have a seamless sales and shipping experience, regardless of where you’re selling your product online.
  • Win More Buy Box Listings: When you choose FBA, you significantly increase your chances of winning the buy box for a particular product.
  • Higher Product Rankings: Amazon gives preference to FBA sellers when ranking products.

While that all sounds great, there are some drawbacks to using FBA. For example, Amazon FBA users can be charged a return processing fee, stock removal fee, inventory placement fee, and export fee

Overall, Amazon FBA is a strong contender when looking for the cheapest way to ship Amazon orders. Because customer shipping costs are wrapped into your prices, you pay only one price for each pick/pack/ship item sold through Amazon, and you won’t have to worry about order fulfillment and tracking. Amazon takes care of all that for you.

Best for Smaller Shipments: United States Postal Service (USPS)

When it comes to shipping small and lightweight items, the United States Postal Service’s prices cannot be beat. If you are shipping a product that is under five pounds, the USPS will offer you the best price, regardless of product size, distance traveled, or delivery speed.

What’s more, depending on the packaging, USPS offers flat-rate options. Commercial prices range from $6.95 for a Priority Mail envelope (arrives in one to three business days) to $19.95 for a large box. There are also additional shipping service options offered by USPS, including Priority Mail Express (overnight delivery), USPS Retail Ground (delivers in two to eight business days), and Media Mail for the distribution of books and periodicals.

And of course, there are USPS offices and mailboxes everywhere you go, so pick-up and drop-off is a cinch. You can also purchase and print your postage and shipping labels online and leave items for pickup with your daily mail at no extra cost. Carrier liability insurance and the ability to track your shipments is included in the shipment cost.

For volume shippers, USPS offers commercial pricing that is cheaper than the price you would pay at the post office. And unlike Amazon FBA, USPS has access to mailboxes and PO boxes.

Best for Larger Shipments: UPS

If you are shipping large items, UPS is the most affordable service out there. As an example, shipping a 20-pound package from New York to Los Angeles costs $47.91 via UPS Ground service (one to five business days) and $59.64 via USPS Retail Ground (two to eight business days).

In general, if your item is heavier than five pounds, UPS is your best bet. And like FBA and USPS, UPS offers a bunch of additional shipping services, including guaranteed day-definite ground delivery, overnight, two-day, and three-day air delivery, and international delivery to over 220 countries and territories.

UPS also operates over 63,000 locations worldwide where you can drop off your shipments. While that isn’t as much as USPS, it still doesn’t make it that hard to get your product on the move. Like USPS, you can also arrange for UPS to come to your place of business to pick up packages, for an additional fee.

What’s more, all UPS shipments are automatically insured up to $100. Customers can also enroll in Quantum View, a software that allows you and your customers to follow your shipments via a personalized dashboard. Lastly, USPS offers a free service specifically for ecommerce merchants called UPS Marketplace Shipping that expedites online orders by integrating your store with your UPS account.

How to Pick the Right Shipping Service for Your Business

Now that you about our three recommendations for the cheapest way to ship Amazon orders, the question you need to ask is which one makes the most sense for your business.

While USPS and UPS will generally be cheaper per-shipment, you must remember that you’ll also need to store items on your own and provide your own shipping materials. You are also responsible for readying the order for shipment, weighing the package, and completing forms or printing labels to ship the packages out.

Each of these costs by themselves might not seem to be too bad, but when added up, they can be substantial. To find out the exact costs, use UPS and USPS’ shipping calculators:

If you’re trying to decide between these three options, are any additional fulfillment services, here are a few tips to guide your search:

  • Pricing structure: Ask for the vendor’s pricing structures. Some charge by the piece under a certain weight or size. They might add a premium for oversized or heavy objects. Review and compare the pricing structure for each company under consideration for each service offered.
  • Warehouse services: Review which warehouse services are included in your contract. Some companies charge a minimum flat rate regardless of how many items are picked, packed, and shipped. Also review warehouse locations and whether you can actually visit a warehouse to see the operation in action.
  • Returns: Find out how returns are handled by the vendors you’re evaluating. Ask if they charge restocking fees, and if so, how much.
  • Customer service: If a return hits a snag, who will help the customer? Some companies offer optional customer service tasks such as answering emails or phone calls about returns and order fulfillment. Be sure to review the service itself, not just the prices.
  • International shipping: If the fulfillment vendor offers international shipping, do they charge extra for it? Can they drop ship from warehouses in other countries? If international business makes up a large proportion of your sales, carefully review the fulfillment vendors’ services in this area.

The Bottom Line

When it comes to the cheapest way to ship Amazon orders, you have plenty of options. Whether you conduct fulfillment operations yourself or outsource the work, it’s always a good idea to research services annually to make sure you continue to receive the best price for your needs.

Article Sources:

  1. FeedbackExpress.com. “Amazon Has 1,029,528 New Sellers This Year (Plus Other Stats)
  2. DollarSanity.com. “How to Start an Amazon FBA Private Label Business
  3. Sell.Amazon.com. “Fulfillment Fees

Matthew Speiser

Matthew Speiser is a former staff writer at Fundera.

He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.

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