Should You Use Amazon Discounted UPS Shipping?

If you’re one of the many sellers who sell through FBA, then you know that you’ve got lots of options when it comes to getting your products to the fulfillment facility. Probably the most common choice is to use Amazon’s discounted rate with UPS. For many sellers, this is the way to go. It’s a lower rate than you’re likely to receive from UPS or FedEx if you have your own account. Currently, Amazon’s UPS rate is about 20% cheaper than an average FedEx account, $.38/lb. compared to $.48/lb. Depending on your account and the discount you’ve negotiated, you may save a bit more or a bit less. Why wouldn’t you choose this option?

Before I was an Amazon FBA seller, I sold health and personal care products through my own websites. I shipped orders using a UPS account with a discount based on the total volume shipped. If you do any shipping at all, especially directly to your customers, get in touch with someone at UPS or FedEx to see what discounts are available to you.

At first I thought that using Amazon’s discounted UPS shipping made sense for sending items to FBA. It would save me money, right? If I shipped using the Amazon UPS rate, then even though I was saving money on those individual shipments, I would risk not meeting the quota on my own UPS account, putting my personal discount in jeopardy, which I needed to ship direct to my customers.

If you’re shipping pallets of large, heavy products, you may be better off arranging for shipment using a freight carrier, like Yellow Freight (now YRC, Inc.). If you’re shipping small heavy items that can be packed densely, consider using USPS Flat Rate Priority Mail boxes, which can ship up to 70lbs. for $15.45 or less (for US Domestic shipping).

Do you use an alternate shipping method? Do you have a shipping story? Leave it here in the comments or get in touch on Twitter, @SellerEngine. I love to hear the innovative solutions that Amazon sellers develop to maximize their profits!

+Paul Cole

16 Comments

  1. I have a personal UPS shipping account but since I made the switch to FBA and have reduced my eBay auctions using Amazon’s shipping rates actually save me money but could see this being a tricky situation if you still ship a lot of items to your customers and use your personal UPS account a lot. Would love to see some of the other comments on this.

  2. Here’s what I have learned over the past couple of months of e-commerce.

    1. If you package is under 13 ounces and you ship in the US get a stamps.com account and you can save lots of money over ups my average cost per item is about 2 dollars and you get free tracking with the service as long as your envelope is over 3/4 of an inch thick.

    2. Unishippers is a great place to get your account unless you can get a sweet deal from ups or fedex directly which is difficult to do.

    3. As a last resort I use Amazon shipping through ups because it usually is cheaper than most methods unless you have the situation of above mention.

  3. Busy Izzy

    I have my own ups account for 6 years already and I had the same thoughts as Dave that by using Amazons accountI would not build up my discount, I still ship a lot to none Amazon customers, than I reconsidered taking into account that after 5 years I only got a 17% discount from ups I’m better off using Amazons discount which is over 50 %, and think about it, you will never ever get a better discount than Amazon, by the time you will get a bigger discount for your account Amazon will get an even greater one so it’s either beat them, or as in my case rather join them.

    • Maxx

      How do you get the 50% off discount for shipping?

      • Hi Maxx!

        You can get significant discounts off of UPS’s printed rates (also works for FedEx, DHL and other carriers). The best way to do this is to open a business account with them and speak with an account rep. They’ll be able to give you a quote based on the quantity and frequency of your shipments.

  4. You can get significant discounts on various company. The best way to do this may be joining the company there an agent will tell you the benefits that will have to be affiliated.

  5. Austin

    I’m curious. My company is a distributor, and we have some clients in central america that order product maybe 50 times a year. It’s mainly shipments of about 70lbs, broken up into one or two boxes. I’m wondering at what volume (quantity) it becomes more economical to use a freight forwarder or LTL or something rather than UPS or FedEx. Can anyone shed light on this?

    • Paul Cole

      Hi,

      That’s a really good question.

      Really the only way to find out for sure is to get quotes for your specific shipments from each of the companies you’re considering working with.

      All of them have account reps who can help you figure out exactly it’s going to cost you. And once you have a few different quotes, you can compare and try to negotiate for the best price.

  6. Mark

    Hi Everybody,

    I hope somebody can help.
    I am starting up a clothing ecommerce. I am planning to also ship internationally. I will be using USPS for USA(domestic) orders since it it way cheaper, plus it has tracking. However, international shipping is the problem.

    I most likely won’t use USPS for international orders since tracking services are very limited. I am looking at UPS or Fedex now, however, international rates are very unreasonable- I’m quoted about $90, and $75 respectively for UPS Worldwide Saver, and Fedex International Economy respectively for a weight of 5 ounce.

    I do not have any shipping history to back up myself when I try to negotiate with the carriers.
    Mine is a startup. Any advice?

  7. Dear Paul,

    I am distributor selling fence privacy products. I have bookmarked this amazing website. I am really interested in the negotiation skills with ups/fedex to get a great discount. My current discount with fedex ground is 20%. My ship cost in the peak season is 10k~12k / month. Any suggestion or referral to get a better discount?

    Thanks, Paul

  8. Paul Cole

    Your best bet will be to take your volume numbers to another shipping carrier and ask them to beat your current price.

  9. David Tomato

    I invite you to contact me, Authorized DHL and USPS re-seller. Web based. no contracts, no volume requirements and NO mo. Fee. If you run your shipment scenarios using my demo site, you can compare side by side DHL vs USPS international or Flat rate vs Priority or Express Domestic. d2mato@gmail.com and I will send you the login to run all the scenarios needed. BTW you can also run LTL freight quotes too.

    Good Luck

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