Amazon shipping ensures goods are delivered to customers in good condition. Retailers and customers use Amazon shipping to deliver products because they trust their logistics.
How much is the Amazon shipping fee, and is it costlier than other shipping companies? If yes, why is Amazon shipping so expensive?
Why is Amazon Shipping So Expensive?
Amazon shipping is so expensive for several reasons, including the cost of general operations, government Value Added Tax (VAT), the weight of packages, the cost of advertising, and the pickup and delivery destination. Also, because Amazon aims to increase its reliability, speed, and shipping network, shipping may be expensive.
There are several other reasons why the cost of shipping on Amazon is so expensive. Keep reading to find out why Amazon shipping is so expensive compared to other shipping alternatives.
1. The Cost Of Operations At Amazon
An increase in the cost of operations at Amazon has accounted for an increase in the cost of shipping. Goods to be transported through Amazon shipping are usually packaged and handled with care.
From assembling, packaging, loading, and offloading to delivery, the goods are in good condition to ensure that the quality of the goods is retained till they reach their final destination. Amazon also allows customers to track shipments.
Amazon employs and trains skilled personnel and uses different service companies to see that goods ordered arrive safely. Therefore, this contributes to the increase in the cost of Amazon shipping.
Also, Amazon employs different measures to ensure that ordered goods are not lost, mishandled, or delivered to the wrong persons. Simply put, the entire stressful organizational process makes Amazon shipping expensive.
2. Value Added Tax Charged by countries
Another reason why Amazon shipping is so expensive is because of the Value Added Tax in some countries. Value Added Tax is paid during importation, and many countries that receive different ordered goods charge Value Added Tax on imported goods.
The value-added tax imposed by countries varies from one country to another. Some countries charge tax on imported goods at rates as high as 7.5% to 20%, depending on the cost of the goods, and some countries still charge higher than this.
Shipping companies like Amazon offset this tax by including it in the shipping fee. Invariably, the customers pay this tax together with the shipping cost.
3. Amazon Increases Shipping Fees As A Business Strategy
Amazon’s expensive shipping fee is one of its numerous business strategies. Amazon reduces the actual cost of goods and adds the removed fee to the shipping fee, increasing the shipping cost.
For example, you might have noticed that some goods are cheaper on Amazon. So, sometimes, Amazon sells products at discount prices to attract more buyers and then increases the shipping fee to offset the massive discount on the goods.
4. Cost Of Advertisement
The cost of advertising makes Amazon’s shipping fee more expensive. Companies like Amazon have used advertising to promote their products and services. Amazon shipping has reached out to new customers by promoting its business on Google and social media platforms.
The cost of the advertisement has made Amazon shipping so expensive. However, the digital marketing of Amazon shipping has helped to create awareness through the online marketing space while increasing the expenses made by Amazon.
Amazon has employed the services of different skilled personnel to run an ad successfully. Experienced personnel like copywriters, content creators, SEO content writers, and digital marketing agencies are recruited to set up Amazon shipping adverts and run them successfully.
In the same vein, Amazon runs this ad for an extended period for it to be more effective. Therefore, Amazon distributes the advertisement costs to their logistics, thereby increasing the shipping fee to cover the expenses.
5. Destination of Goods
The destination that goods are delivered to makes Amazon shipping so expensive. Goods shipped from neighboring countries are cheaper when compared to the same goods shipped from two different continents.
The distance covered in shipping a product through Amazon makes shipping costs expensive. So, Amazon shipping becomes more costly if the location for delivery is far away from the nearest Amazon warehouse.
This is why Amazon has global shipping rates to show some form of transparency and explain why your shipping fee could differ from that of a friend on another continent.
For example, you can ship an item using Amazon’s priority courier shipping to Mexico at $8.99 per shipment. However, if you want to ship the same item to Europe on priority courier shipping, you’ll have to pay $50.99.
6. Delivery Speed
Another factor that makes Amazon shipping so expensive is the mode of transportation and speed of delivery of goods. Amazon ships goods through different modes of transportation.
For example, while you’ll have to pay $7.99 to ship an item to Canada (standard shipping time), you’ll have to pay $9.99 if you need it sooner and $19.99 for express shipping. While the item didn’t change, the speed of delivery (and most likely means of delivery) changed.
Amazon shipping uses ocean, air, and land to ship goods to different destinations. Air freight is the fastest among all the modes of transportation used by Amazon for shipping, and this is because airplanes cover a considerable distance in a short time.
Air freight is reliable and reduces the chances of causing damage to goods. Amazon uses air freight to meet urgent demands and transport goods with low-volume and small-sized units.
Transporting goods by air freight makes Amazon shipping so expensive. However, customers can choose from the different delivery options Amazon provides.
7. Packaging
Amazon shipping is so expensive due to the packaging of the product to be shipped. For example, Amazon uses Expedited Chilled Shipping for some perishable products that need to be chilled during transport.
Amazon shipping charges more to transport perishable goods to cover the cost of special care and handling during transportation. For Expedited Chilled Shipping, Amazon charges $1.99 for each ordered item as a shipping fee.
Perishable foodstuffs such as fruits, vegetables, and frozen food products can be transported using air or ocean freight. This is to avoid spoilage of these products and to ensure that the products arrive in good condition.
So, depending on the nature and packaging of goods, Amazon shipping can be costly. The same thing applies when the ordered product to be shipped has more weight.
8. Weight Of Goods
One of the reasons why Amazon shipping is so expensive is the weight of the goods to be delivered. Amazon’s shipping price is determined by the size and weight of the goods. The higher the weight of the goods, the higher the Amazon shipping fee.
The lower the weight of the goods, the lower the Amazon shipping fee. Some heavy goods that cannot be stacked during transportation are expensive to ship through Amazon, and this is because they make the space available in the cargo unusable.
The shipping weight, according to Amazon, is the weight of an item based on its unit weight. But, dimensional weight is used to determine the shipping fee when the dimensional weight is higher than the unit weight.
Air freight at Amazon charges packages based on actual weight or volumetric weight. Amazon shipping based on volumetric weight depends on the space occupied by the package.
9. Third-Party Sellers Make Amazon Shipping Expensive
A product from a third-party seller instead of the company through the Amazon site is expensive to ship. Amazon showcases some products for sale by third-party sellers, and these third-party sellers are at liberty to set the shipping fee for the products.
Third-party sellers make Amazon shipping fees more expensive. Aside from this, Amazon recently added more money for fuel and inflation at 5% for its third-party sellers using Amazon warehousing and shipping.
The shipping fee at Amazon increases as the number of third-party sellers increases.
10. The Cost Of Fuel Increases The Cost Of Amazon Shipping
Just like the fuel cost affects the price of goods in the market, Amazon’s shipping is also increased due to the hike in fuel prices. Whatever transportation medium is used for Amazon shipping, fuel is necessarily used for it.
As the price of fuel increases, the cost of shipping on Amazon becomes expensive. So, the fuel price determines the amount Amazon shipping charges for air and ocean freight, delivery vans, and trucks.
With the recent increase in fuel prices globally, shipping goods from any part of the world to their destination through Amazon has become extremely expensive. Usually, the cost of fuelling a ship takes up more than half of the total operating cost of Amazon shipping.
Conclusion
There are many reasons why Amazon shipping is so expensive. Usually, shoppers bear the bulk of the cost of Amazon’s shipping process. Some major reasons for the high Amazon shipping costs include the speed of the delivery, packaging, weight of the goods, and fuel cost.
