The FBM Shipping Decision

When you're an Amazon FBM (Fulfillment by Merchant) seller, the choice between shipping methods can significantly impact your bottom line. You have two primary options: Amazon Buy Shipping or using external software like Atoship or Pirate Ship. The question is, which option actually saves you money? Let's explore these choices in a bit more detail.

Amazon Buy Shipping is Amazon's built-in system for purchasing shipping labels. It's a straightforward process: navigate to your Orders section, click on "Buy Shipping," choose from the rates Amazon provides, purchase your label, and then print and ship. Amazon offers a selection of carriers, including USPS with commercial rates, UPS with Amazon-negotiated rates, and FedEx, though the latter is limited. In some regions, you may also have access to Amazon Shipping. The appeal of using Amazon's system lies in its integration with your seller account, making it a convenient choice for those who prioritize simplicity over savings.

However, when it comes to pricing, things can get a bit more complex. We conducted a price comparison by shipping identical packages using both Amazon Buy Shipping and Atoship. The results showed that Atoship often provided cheaper rates. For instance, shipping a 1 lb package to Zone 5 via USPS, Amazon charged $8.45, while Atoship offered $7.38, translating to a 13% savings. Similar savings were found with UPS Ground and USPS Ground Advantage services, where Atoship consistently beat Amazon's rates. This price discrepancy arises because, although Amazon can negotiate good deals due to its volume, it doesn't always pass the full discount to sellers. In contrast, external software platforms aggregate rates from various sources, keeping prices competitive.

But why would anyone choose Amazon Buy Shipping if it's not always the cheapest? The answer lies in the Valid Tracking Rate (VTR), a critical metric for Amazon sellers. Amazon mandates a VTR of 95% or higher. Falling below this threshold can lead to account health warnings or, worse, suspension. Amazon Buy Shipping offers a distinct advantage here: tracking information is automatically uploaded to your Amazon account, ensuring compliance without any manual intervention. This guarantees "valid" tracking and eliminates potential delays or synchronization issues that might occur with external software.

External software solutions, such as Atoship, do require a bit more setup to ensure VTR compliance. These platforms must integrate seamlessly with Amazon to automatically upload tracking information within 24 hours. Atoship, for instance, synchronizes tracking data promptly, matching Amazon's requirements. It also offers additional features like multi-carrier rate comparisons, advanced batch printing, automation rules, and enhanced address validation. Such tools are particularly beneficial for sellers who operate across multiple channels or ship more than 20 orders a day. This level of automation and data analytics can significantly streamline operations, providing a comprehensive view of shipping efficiency and cost savings.

Choosing between Amazon Buy Shipping and an external software service like Atoship depends largely on your selling strategy and operational needs. If your business is exclusively on Amazon and simplicity is a priority, Amazon Buy Shipping might suffice. However, if you're looking to minimize costs and maximize efficiency, especially with a higher order volume or multi-channel sales, external software is likely the better option.

Setting up Atoship for Amazon FBM involves a few straightforward steps. First, you'll need to create an Atoship account and connect your Amazon store through the Integrations section by authorizing MWS access. Once your orders are synced automatically, you can configure your default package sizes, establish automation rules, and decide on your preferred label format. As orders populate in your dashboard, you can select those ready for shipping, compare rates across carriers, purchase, and print labels. Tracking information is then automatically uploaded to Amazon, ensuring VTR compliance without additional hassle.

The potential savings from using Atoship can be substantial. For instance, if you ship 500 orders a month and save an average of $2.00 per label, you're looking at a monthly savings of $1,000. Such savings can have a significant impact on your annual budget, freeing up resources for other business areas.

Some sellers adopt a hybrid strategy, utilizing both Atoship and Amazon Buy Shipping as needed. They might use Atoship for heavier packages, complex shipments, or when rate shopping is advantageous, and reserve Amazon Buy Shipping for quick, single orders or when the rates are comparable. This flexibility allows sellers to optimize their shipping processes based on specific order requirements.

Real-world examples underscore the benefits of making a thoughtful choice. Take the case of an electronics seller who, after switching to Atoship, saved an average of $2.15 per label on 800 FBM orders a month, resulting in monthly savings of $1,720 and annual savings of over $20,000. Similarly, an apparel seller mixing both methods saved $1.40 per label on 400 orders monthly, cutting costs by $560 each month.

Maintaining a high VTR is crucial, and with integrated software like Atoship, you can ensure compliance without sacrificing cost-effectiveness. By utilizing Atoship's automatic upload features, monitoring dashboards, and alerts for tracking issues, you're well-equipped to meet Amazon's standards and safeguard your account health.

In conclusion, for most Amazon FBM sellers, external software like Atoship is a compelling choice, offering savings of $1-3 per package while maintaining full VTR compliance. Amazon Buy Shipping is a viable option for those who sell solely on Amazon and prioritize simplicity. However, the potential savings and operational benefits of using external software make it a smart consideration. Why not give Atoship a try? It's free to start, and you'll likely find the savings speak for themselves.