How to Maximize your Profits when Selling on Amazon by Lowering Your Shipping Rates

written by Carlos Alvarez
1 · 31 · 22

The Amazon marketplace has given many niche market proprietors the means to sell things in far greater volume than ever before. It has set new logistics benchmarks that have facilitated the purchase of goods at a pace far higher than any other retailer. As more and more firms are joining the marketplace, it is worthwhile to think about tips to lower your shipping rates.

Each merchant must pay fees for the privilege of having their listings appear in front of consumer’s eyes, as well as fees for packaging, storing and distributing the physical products. There are many tips to lower your shipping rates to help increase your profit margin. Here are a few of them.

Average cost and marginal cost

One decision that all Amazon sellers must make is to use a per-item sales account or a subscription based one. A per-item account is a contract where sellers are charged based on the number of units sold, and a subscription is a flat rate that does not vary by sales. If you are expecting to sell something in large quantities, you may want to consider a subscription, which will lower the average cost and eradicate the additional marginal cost per sale. If the quantity sold is expected to be lighter, using the subscription may not be cost minimizing.

Logistics, logistics, logistics

Part of the appeal with Amazon is that they are selling their operations management (i.e. warehouse and logistics) services to their merchant clientele. However, if a client makes poor production or purchasing decisions that lead to higher overhead costs, these will get passed onto the merchant. For example, one client might be confronted with a tempting deal to buy something in greater quantity for a lower price. If this item is bulky and eats up a lot of precious warehouse space, Amazon will charge more in storage fees. If the units sell quickly, this will not be a big deal. On the other hand, if there is not as much interest in them and they sit in the warehouse for a long time, it will get costly.    

Optimize for the search engine

The best way to ensure that your products do not stay in storage too long is to have them be seen by as many consumers as possible. This is accomplished using SEO, or Search Engine Optimization techniques. There are certain keywords that users will type when they are seeking a certain product or good. Effective use of SEO will make it so that your products are the first ones that show up when the user types certain keywords. If there is one universal set of tips to lower your shipping rates, they would be focused on making you sell as much product as possible as quickly as possible. Subscription sales accounts, storage fees, search engine optimization – it is all designed with one principle in mind – volume. 

Click here to learn more tips about selling products online.

Carlos Alvarez

Alvarez sums up his mission to help online sellers with a quote he heard early on in his career. New sellers constantly compare their Chapter 1 to another seller’s Chapter 20. They see what other veteran sellers are doing and they judge their success and failures by this benchmark. His goal is to show sellers a realistic path to success, and how they can enjoy every chapter of their own, unique journey.

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