How to reduce your Amazon shipping costs.

Shipping is one of the biggest line items for any Amazon seller. Whether you're using FBA, FBM, or a hybrid approach, there's almost always money being left on the table. Here are the strategies that actually move the needle.

Understand where the money goes.

Before you can optimize, you need to know where the dollars are actually flowing. Amazon's fee structure breaks down into several distinct buckets:

• FBA fulfillment fees — per-unit charges based on size tier and weight. This is the cost Amazon charges to pick, pack, and ship each unit.
• FBA storage fees — monthly charges based on cubic feet of warehouse space, plus long-term storage surcharges for aged inventory.
• Inbound shipping to Amazon FCs — the freight cost of getting your products into Amazon's fulfillment centers in the first place.
• Referral fees — Amazon's percentage cut on each sale, typically 8-15% depending on category.

Most sellers focus on referral fees because they're the most visible — they show up on every order. But fulfillment and storage fees are where the real optimization opportunities live. These are the costs you can actually engineer down through packaging, inventory management, and fulfillment strategy changes.

Right-size your packaging.

Amazon's FBA fees are tiered by size and weight. Moving from "large standard" to "standard" can save $1-3 per unit. At scale, this is one of the fastest ways to reduce your per-unit cost. Strategies to consider:

• Measure your actual product dimensions, not the box it came in — many sellers are in a larger tier than necessary
• Consider removing unnecessary packaging layers
• Redesign packaging to stay under size tier thresholds (18x14x8 for standard size)
• Use poly bags instead of boxes where product protection allows
• Small reductions in dimensions can move you from one tier to the next, saving significantly at volume

This is the kind of optimization that seems small on a single unit but compounds fast. If you're shipping 5,000 units a month and you save $1.50 per unit by dropping a size tier, that's $7,500 per month — $90,000 per year — from a packaging change.

Optimize your inbound shipments.

Getting inventory into Amazon's fulfillment centers is a cost center that many sellers underestimate. The way you ship inbound directly impacts your margins:

• Ship full pallets when possible — LTL (less-than-truckload) rates for pallets are much cheaper per unit than SPD (small parcel delivery)
• Use Amazon's partnered carrier program for discounted rates
• Consolidate shipments rather than sending frequent small ones
• If using a 3PL, have them build optimized pallets that maximize density
• Avoid inventory placement fees by understanding Amazon's inventory placement options

The difference between well-optimized inbound logistics and ad hoc shipping can be $0.50-$2.00 per unit. Multiply that across your monthly volume and inbound optimization pays for itself immediately.

Manage storage to avoid penalties.

Amazon's storage fee structure is designed to penalize sellers who treat fulfillment centers like long-term warehouses. The fees escalate aggressively over time:

• Amazon's monthly storage fees increase significantly in Q4 (Oct-Dec)
• Long-term storage fees (aged inventory surcharge) hit at 181+ days — monitor your inventory age
• Use FBA inventory reports to identify slow-moving stock before it ages out
• Create removal orders for dead inventory rather than paying escalating storage fees
• Keep 4-8 weeks of inventory in FBA, not 6 months — replenish frequently from your 3PL

The last point is critical. Sellers who use a 3PL as a staging warehouse can maintain lean FBA inventory and replenish weekly or biweekly. This keeps storage fees low while avoiding stockouts. You hold the bulk of your inventory at your 3PL's lower storage rates and drip-feed into FBA as needed.

Consider a hybrid FBA + FBM approach.

Not every SKU needs to be in FBA. A hybrid fulfillment strategy lets you optimize costs at the SKU level rather than applying a one-size-fits-all approach:

• High-velocity SKUs — FBA. Take advantage of the Prime badge and fast shipping. The per-unit economics work because you're turning inventory quickly.
• Long-tail / slow-moving SKUs — FBM via 3PL. Avoid storage fees, maintain control, and only ship when orders come in.
• Oversized items — Often cheaper to ship FBM from a 3PL than pay FBA oversize fees.
• New product launches — Start FBM to test demand before committing FBA inventory.

This hybrid approach can cut total fulfillment costs by 15-30% depending on your catalog mix. The key is analyzing each SKU's velocity, margin, and size tier to determine the optimal fulfillment path.

Add a fulfillment node closer to your customers.

If you're shipping FBM orders from one location — especially a coast — you're paying premium zone rates for cross-country shipments. Carrier pricing is based on shipping zones, and the further a package travels, the more it costs.

Adding a 3PL in a central location like the Southeast cuts 2-4 shipping zones off east-bound orders. At scale, this is the single biggest cost reduction lever available. A brand shipping 5,000 FBM orders per month from the West Coast can save $20,000+ monthly by splitting fulfillment between a western warehouse and a central 3PL.

We wrote a full breakdown of how multi-node fulfillment works.

Negotiate carrier rates.

Your shipping rates are not fixed. If you have volume, you have leverage:

• If shipping 500+ packages/month FBM, you have leverage to negotiate UPS/FedEx rates
• A 3PL with volume across multiple clients often has better rates than you can get individually
• Compare USPS Commercial Plus pricing for lightweight items
• Consider regional carriers for specific zones where they beat national carriers

Most 3PLs have negotiated rates that reflect the aggregate volume of all their clients. Even if your individual volume wouldn't qualify for deep discounts, you benefit from the 3PL's collective bargaining power. This alone can save 15-25% on per-package shipping costs compared to retail or small-business rates.