Leveraging Logistics: How to Offset Rising Costs on Amazon

Rising fuel costs aren’t just impacting our commute to the office, they’re quietly eating into Amazon margins too.

Many sellers are starting to feel the squeeze, but it’s not always obvious why. On the surface, overall charges may look relatively stable… so where are these extra costs coming from?

And more importantly, how can you offset them?

Where is the cost coming from?

1. Courier increases

The most obvious place to start is with your courier.

As fuel prices rise, many carriers are increasing their fees to protect their own margins. This doesn’t just affect inbound Amazon stock, it impacts your entire supply chain.

If you’ve noticed rising costs to get products into your warehouse, you’re not imagining it. These increases compound over time, reducing margins both on and off Amazon.

Keeping a close eye on courier quotes and regularly benchmarking providers is now essential.

2. FBA surcharges

For FBA sellers, Amazon has introduced a 1.5% fuel and logistics surcharge.

It may seem minor at first glance, but at scale, even small percentage increases can have a significant impact on profitability.

3. The knock-on effect

The real challenge? These costs don’t exist in isolation.

• Returns processing fees (50% of fulfilment costs) also increase

• Higher fulfilment fees mean higher costs across the entire order lifecycle

• Inventory distribution is becoming more expensive, pushing more sellers toward Amazon’s paid distribution services

  
  

What starts as a small increase quickly turns into a domino effect across your entire account.

It’s not all bad news

While margins may be tightening, Amazon also offers a range of opportunities to reduce costs, if you know where to look.

That’s where a more proactive, strategic approach makes the difference.

So, how can you offset these costs?

Here are a few key levers to start with:

1. SIPP (Ships in Product Packaging)

Ship products in their own packaging and unlock a fixed per-unit saving whilst also reducing packaging waste.

Sellers can benefit from reduced fulfilment costs as well as boosting their awareness by having branded packaging visible to customers upon delivery.

There’s no cost involved with joining the programme, just 4 steps to follow:

1.      Ensure existing packaging meets guidelines, or update it to comply

a.      Flexible packages must be at least 2mm thick, fit the product with <2 inches slack, and have no protrusions such as hangers and handles.

b.      Rigid packaging must be larger than 152.4 x 101.6 x 9.5 mm, clear labels of package contents, and must not include windows or cut-outs

2.      Group similar products based on size, weight, material, packaging type, and package quantity

3.      Test and evaluate

a.      Decide if you will be self-testing or require an ISTA 6 lab to test your packaging (for fragile and sharp objects)

b.      For self testing, head to Seller Central -> Growth -> Explore Programmes -> Sustainability -> Ships in Product Packaging for full instructions

4.      Submit your product for the programme by:

a.      Selecting the product in the enrolment page

b.      Uploading test details and documentation

c.      Confirming when compliant documents will arrive at fulfilment centres

The best bit? As of 30^th April 2026, SIPP has become available through MCF, helping logistics savings both on and off Amazon

2. FBA New Selection[SS1] 

Launching new products?Take advantage of free storage, free fulfilment, and reduced returns costs to ease the initial margin pressure.

For 120 days, the first 100 units sold will receive free storage, liquidations and removals for standard-sized ASINs. For non-standard sized ASINs, this is reduced to the first 50 units.

You also receive a 10% rebate of sales for eligible ASINs, applied to your fulfilment fees the following month that it’s earned.

And if that’s not enough, enrolled sellers also benefit from a 25% discount on Vine enrolment fees, which is applied to 3-10 units per parent ASIN enrolled into Vine.

Enrolling now guarantees savings for up to 6 months, with bi-annual reviews to ensure IPI scores remain above 300 to maintain eligibility.

3. Inbound strategy: LTL vs Small Parcel

Choosing the correct inbound method matters more than ever. Not just an operational decision, getting this right impacts cost per unit, receiving efficiency and inventory flow.

LTL (Less Than Truckload): Best for palletised, high-volume shipments

·       Offers a lower cost per unit

·       Fewer handling points by shipping in full pallets

·       Improves Amazon efficiency as pallets can be processed faster than individual parcels

Small Parcel Delivery (SPD): Designed for smaller, more frequent shipments

·       Greater flexibility: respond to demand quickly and avoid losing sales

·       Lower commitment: no need to build full pallets

·       Faster dispatch cycles to react to uncertain demand

Whether you’re looking to save per unit, or prevent out of stocks through quick reactions to demand spikes, getting your inbound strategy right can unlock meaningful savings while keeping your inventory flowing when it matters most.

There’s no single fix but there are plenty of opportunities.

Because every penny saved isn’t just cost reduction, it’s fuel for growth.

And in a landscape where margins are under pressure, those savings can be the difference between standing still and scaling forward.

More on how to reinvest those savings coming soon!