Why is Amazon shipping so expensive? (9 reasons)
If you’re an Amazon Prime member, some products on the site come with free shipping, which is just one of the many perks available to Prime members.
But if you’re not an Amazon Prime member, shipping on some products can start to get very expensive. So you might be wondering what is causing these high shipping rates.
Look no further! Here’s Everything You Need to Know About Pushing Up Amazon Shipping Rates!
Why is Amazon shipping so expensive?
Factors that affect Amazon shipping rates include the destination of the package, the speed of the shipment, and whether the product is sold by a third-party seller. Additionally, Amazon’s recent investments in advertising and its shipping network have pushed up shipping rates.
To learn more about the different factors that affect Amazon shipping rates, read on!
1. Third-party sellers adjust shipping costs
Not everything that Amazon offers is sold by the company itself. Therefore, Amazon provides options for third-party sellers to earn money by selling their products on Amazon.com.
Therefore, third-party sellers are free to set and adjust shipping rates for their products.
Shipping fees for third-party sellers can get quite expensive depending on the weight and size of the item and where it’s being shipped from.
2. Potential Marketing Strategies for Amazon
Some products on Amazon are priced very low to entice shoppers to make impulse purchases. Amazon then charges higher shipping rates to make up for lost profits from low product prices.
As such, some see Amazon’s higher shipping rates as a marketing ploy to drive more sales.
3. Number of Amazon Prime members
Since Amazon Prime members can enjoy free shipping on most products, this has led to higher shipping costs for non-Prime members.
Amazon’s one-day delivery service for Prime members accounts for a large portion of its spending (nearly $1.5 billion last year alone).
Over the past few years, the number of Amazon Prime members has continued to rise.
So, to make up for the massive shipping costs Amazon Prime members avoid, Amazon has to raise shipping rates for non-Prime customers who shop on the site.
4. Amazon is investing more
Over the past few years, Amazon has invested heavily in various business ventures to make more money.
For example, Amazon funded new streaming service IMDbTV, expanded features for Prime members, and poured money into its fulfillment centers to meet customer demand.
With Amazon investing a lot of money, shipping is an easy way to earn more revenue to offset the investment.
5. Spend more money on advertising
Amazon’s advertising budget may also be a reason for the higher shipping costs. While the number of Prime members continues to grow every year, Amazon also spends a significant portion of its budget on TV advertising.
Amazon creates TV ads to educate current and potential customers about its environmental sustainability and what sets the company apart.
Some outside sources believe Amazon is increasing shipping fees to ensure it doesn’t lose out too much on advertising.
6. More third-party sellers on Amazon
In 2020, third-party sellers accounted for more than half (62%) of Amazon’s total listings.
Third-party sellers are free to decide how much shipping they charge, which can be very high depending on where the item is shipped from.
Even if you are an Amazon Prime member, you may still have to pay for shipping if the product is offered by a third-party seller.
So, as the number of third-party sellers on Amazon increases, so does the number of products with higher shipping costs.
7. Amazon is improving its shipping network
One detail that Amazon constantly strives to refine is the timing of shipments to customers. To this end, Amazon spends a lot of money constantly improving its shipping network.
To grow its shipping network, Amazon invested in more warehouses, employees and new technology.
So before Amazon can lower its shipping costs with an efficient network, it first has to invest money to get there.
8. Certain Destinations Raise Amazon Shipping Costs
The destination of an Amazon package also plays an important role in the shipping charges that are added to the price of the product.
So if you live in a more remote location or an area farther from an Amazon warehouse, shipping costs will be much higher than if you live in a city.
Amazon hopes its growing supply chain will eventually allow all customers to pay the same shipping rates, no matter where they live.
9. Shipping Speed Affects Amazon Shipping Rates
Amazon allows you a number of options based on how quickly you want your order delivered. For example, some products ship to you within five to seven business days with standard shipping.
Plus, certain items on Amazon even qualify for same-day shipping if the address qualifies.
So the faster you want your package to arrive, the more expensive shipping will be.
If you want to learn more about Amazon’s services, you can also check out our related posts on how late Amazon delivers, what is Amazon Woot, and how Amazon ships so fast.
There are several factors that affect Amazon shipping costs. Factors such as shipping speed, the location of your address, and whether you’re an Amazon Prime member all affect shipping costs.
Plus, Amazon’s recent investments have pushed up shipping costs. Amazon, for example, has invested heavily in advertising and improving its shipping network.
As a result, Amazon raises shipping rates to cover its investment and expenses.