The Ultimate Amazon Shipping Guide
“Amazon has transformed the small miracle of each delivery into an expectation of modern life.”
More than 50% of US shoppers turn to Amazon first when searching for new products.
80% of those are influenced by the lowest shipping prices, and 72% are looking for the fastest option.
You could also lose more than half of those due to shipping-related costs at checkout.
Amazon rewrote the rules on delivery and as a result, its shoppers have certain expectations. If you’re going to join the ecommerce goliath, it’s critical to understand just how impactful your shipping strategy will be to your success.
And that’s what this guide is for.
In this guide to Amazon shipping for sellers:
Table of Contents
The best advice and insights for selling on Amazon this year
There’s a lot to know when it comes to selling on Amazon. In this guide, you’ll find expert tips and advice to make sure you start strong and stand out from the crowd.
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How Important is Shipping to Amazon Customers?
“In less than two decades, Amazon single-handedly transformed the way we think about online shopping. Before Prime launched in 2005, two-day shipping was virtually unheard of — now more than 100 million people use the service, and they expect the things they order online to arrive at their doorsteps in 48 hours or less.”
Incredibly, after finding a product on a competitor’s website, 90% of people will check Amazon and search for the same product.
That’s how much Amazon is dominating.
In fact, Amazon customers are so accustomed to their appetite for speed and convenience, that when Amazon momentarily couldn’t deliver, literally and figuratively speaking, people started to look elsewhere.
“Higher online sales traffic at companies like Walmart and Target can be traced in part to “customers looking for faster delivery”… The things [people] wanted from Amazon were now taking a month, which is the opposite of the promise that Amazon has built over the last decade."
- Juozas Kaziukenas, CEO of ecommerce consultancy Marketplace Pulse.
Etsy, too, has been encouraging sellers to offer free shipping.
Unsurprisingly, Amazon recalculated fast, and this low period didn’t last long.
Amazon Prime proves the value of free shipping
Amazon has some of the most loyal customers in the world.
Prime members are willing to pay a subscription for fast, free delivery, convenient options, and access to exclusive deals and streaming. Amazon Flex Drivers are highly experienced and provide the best services; that is how successful delivery works.
Number of paying Amazon Prime members worldwide as of 1st quarter 2021:
Source: Statista.
What’s the deal with Amazon Prime?
- Dominance: 58% of all US consumers are Amazon Prime members.
- Frequency: 20% of Amazon Prime members shop on Amazon a few times a week.
- Motivation: 67% of people say they signed up to Amazon Prime to get access to Amazon’s affordable, free, same-day, one-day, and two-day shipping options.
- Spend: 67% of Amazon Prime members would spend more than $100 on a product, compared to only 41% of non-Prime members.
To be eligible for Amazon Prime and have access to Prime members as a seller, you either need to use FBA or prove yourself enough to be able to fulfill Prime orders without it - which we’ll explore further down. You can also find more information and tips on Prime for sellers in our dedicated guide.
In order to stand out from your competition, you’ll need to keep up regardless.
But keeping up whilst still turning a profit is perhaps easier said than done?
So let’s explore our options, what might make each more suitable than the next for your business, and how to ensure whichever you choose works for you.
Fulfillment by Amazon (FBA)
When you choose FBA, you’ll have access to millions of shoppers worldwide as well as Amazon’s expertise and infrastructure:
“The Amazon supply chain continues to be one of, if not the most, innovative in the world… Amazon is also continuing to expand its warehouse technology and capabilities to make picking, packing, and shipping orders more efficient.”
After signing up, selecting products, and preparing them exactly according to the shipping guidelines, you can send your inventory to Amazon’s fulfillment centers.
Your stock is automatically available to Prime customers.
Amazon then receives orders and picks, packs, and ships them to customers on your behalf. You can request the use of shrinkwrap, poly wrap, bubble wrap, or special labels, to fit your packaging needs, and Amazon’s customer service center will handle returns.
This whole process is helping businesses across the globe satisfy their customers.
You don’t even need to be selling on Amazon to use its FBA service. You can use FBA Multi-Channel Fulfillment to fulfill orders from other platforms - like Shopify.
FBA can provide your customers with:
- Guaranteed fast shipping, with Amazon two-day shipping for Prime members.
- Free shipping on some products.
| What’s good about FBA | What’s not so good about FBA |
|---|---|
| It’s relatively easy to set up, and the automated process will then save you time. | The fees can be confusing and complex. |
| It includes customer service and returns. | You have less control over the customer experience. |
| Your items are eligible for Amazon Prime. | Your sales tax obligations might expand with Amazon storing your items in different US states. |
| You can sell both domestically and internationally. | You need to adhere to strict preparation requirements. |
| You can use FBA for other ecommerce platforms too, with Amazon’s MCF. | Your products will arrive in Amazon packaging by default. |
| You’ll need to send products to warehouses at your own cost. |
You can find more information in our guide on Fulfillment by Amazon.
Whilst FBA gives you access to Amazon’s world-class fulfillment network, it’s not your only option when selling on the platform.
And those that choose to manage it themselves are referred to by Amazon as FBM sellers.
Fulfillment by Merchant (FBM)
Fulfilling your own orders can mean doing it yourself, or using a third party logistics (3PL) supplier.
The Do It Yourself option
This is a common way for sellers to start out, but many remain managing fulfillment themselves even as they grow.
As you can imagine, the logistics are complicated. As you grow, so will your need for a sophisticated inventory management system, warehouse space, and potentially, employees.
But this way you do have the greatest control over your shipping costs and customer experience.
| What’s good about DIY | What’s not so good about DIY |
|---|---|
| You can stay largely in control of the whole process, and make decisions around customer service, experience, shipping options, and packaging. | Fulfilling orders yourself can take a lot of time away from other responsibilities. |
| It can be difficult to scale up and there might be a lot of hidden costs involved. |
The next option is DIY but with the added touch of an Amazon badge.
For elite sellers: Seller-Fulfilled Prime (SFP)
With Seller-Fulfilled Prime, you can deliver directly from your own warehouse to Amazon Prime customers.
Prime members can filter for Prime products in their search results to get the benefits of a guaranteed delivery date and trackable shipment.
To qualify for this program, there is a trial period which you must complete which is comprehensive. Amazon needs to trust that sellers will meet their strict standards.
- Offer premium shipping options.
- Ship over 99% of their orders on time.
- Have an order cancellation rate of less than 0.5%.
- Use Amazon Buy Shipping Services for at least 99% of orders.
- Have nationwide delivery coverage for all standard-size products.
- Use shipping methods that support weekend delivery and pick up (Saturday or Sunday).
- Meet targets for 1-day and 2-day delivery promises.
- Deliver orders with Amazon’s supported Seller-Fulfilled Prime carriers.
- Allow for all customer service inquiries to be dealt with by Amazon, and agree to the Amazon Returns Policy.
Seller-Fulfilled Prime can provide your customers with the benefits of Amazon Prime delivery: trackable shipments and fast delivery.
| What’s good about SFP | What’s not so good about SFP |
|---|---|
| You can stay largely in control of the whole process, and continue to run your well-oiled machine. | It can be difficult to meet the requirements. |
| You have access to Prime Members. | It still takes a lot of your time. |
| You are more likely to have offers and products featured by Amazon. | You have to purchase your packaging labels from Amazon. |
Seller-Fulfilled Prime may be best for top-tier sellers, and products that are high-value, slow-moving, have special handling or preparation requirements, seasonal, or have variations.
Another FBM option you have to ship your products is without any input from Amazon at all.
Outsourcing fulfillment to a third-party logistics provider
There are plenty of third parties offering fulfillment services for ecommerce businesses.
Tips for choosing a 3PL
- A good 3PL will have sophisticated warehouse management software, detailing exactly where a product is, when it arrived, and more.
- B2B and B2C orders can be quite different: the 3PL you choose needs to support both types of orders.
- Identify the best way to package your products, then set clear expectations and guidelines to ensure that your orders will be secure, presentable, and cost effective.
- Their shipping strategy should be a streamlined process that supports numerous options in terms of carriers, locations, cut-off times, and speed.
| What’s good about many 3PLs | What’s not so good about 3PLs |
|---|---|
| Their advanced logistics networks. | They don’t carry the reputation of FBA on Amazon, and you won’t get the prestigious “fulfilled by Amazon” badge on listings that you get using FBA or SFP. |
| Their state-of-the-art technology. | Their logistics might not be as efficient as Amazon, so choose carefully. |
| They can be less expensive than FBA, though this is highly subjective. | |
| Your products can arrive in packaging with your branding on it. |
3PLs are particularly good for sellers who want to scale up, but negotiate a contract, and products that have a fairly high turnover, that aren’t too fragile or valuable.
Check out some options here: ShipBob, a2b Fulfillment, Red Stag Fulfillment, ShipMonk.
So now that you have an overview of what the different options can offer both you and your customers, let’s take a quick look at what they’ll cost.
Comparing Costs
Regardless of how you ship your Amazon products, you’ll have similar costs involved.
Whether these come under the banner of “FBA fees”, or you deal with them individually when shipping yourself, there’ll be similarities.
For more information about Amazon fees and managing them, check out these guides:
With the costs of fulfillment and your Amazon sales ideally on the up, you’re going to need to keep a close eye on your expenses.
Look at the bigger picture to figure out whether the shipping option you’ve chosen is cost-effective for you.
Use Your Accounts To Make Smart Shipping Decisions
With 83% of customers wanting free delivery, that cost has to be covered somewhere.
But with Amazon’s simplified settlement statements leaving out a lot of the detail about your transactions, how can you figure out where to recover some of the costs?
By integrating A2X with your Amazon account and accounting software, each single figure bank deposit becomes a journal summary with every income and transaction line associated with it split out for you. All automatic, accurate, and coded for your books.
Reconciliation takes a few clicks, and all your numbers are organized for you. Statements are also split by month, and books recorded via the industry-standard accrual method of accounting.
“If you’re not using A2X for Amazon Accounting you’re doing it wrong!”
- Catherine F., Accounting Manager.
Sign up to your free trial of A2X for Amazon today!
Also on the Blog
The best advice and insights for selling on Amazon this year
There’s a lot to know when it comes to selling on Amazon. In this guide, you’ll find expert tips and advice to make sure you start strong and stand out from the crowd.
Download our free guide
