Using credit cards with reward programs can be a great strategy for online sellers, but it’s important to evaluate if it makes sense for your specific situation. As an eBay and Etsy seller who also sells on Amazon, I use Pirateship for my shipping needs throughout the year, and I have it attached to my Southwest rewards card so I can earn miles for free travel. However, during the peak selling season in Q4, when I sell more merchant fulfilled products on Amazon, I wanted to see if it would be beneficial for me to switch to shipstation for my Amazon shipping.
One of the factors I considered was the monthly subscription cost of Shipstation. While Pirateship is free and works well for me throughout the year, I needed to determine if the rewards I would earn from my credit card would outweigh the subscription cost during the Q4 period. I also took into account that as a business expense, I could deduct the subscription cost from my profit, which would lower the overall cost.
To evaluate the numbers, I used Inventorylab to calculate my shipping expenses for Amazon merchant fulfilled products during November and December. I then multiplied the number of points I would earn from my credit card, using the value of a Southwest point at 1.5 cents, to see if it would be more than the subscription cost of Shipstation. I found that during the Q4 period, I would come out ahead by using Shipstation, but for the rest of the year, it would not be cost-effective for me, as most of my products are fulfilled by Amazon (FBA).
Another advantage of using Shipstation, especially if you’re low on funds or need more capital for sourcing, is that Amazon pays you the full payout while your shipping expenses may take time to be charged to your credit card. This can provide some extra cash flow for your business. However, it’s important to be mindful of paying off your credit card to avoid interest charges.
In conclusion, as a long-time seller with established numbers on shipping expenses, I found that using Shipstation with a credit card rewards program would only benefit me during the Q4 period when I sell more merchant fulfilled products. For the rest of the year, I will continue to use Pirateship for my eBay and Etsy stores, and add Shipstation only for the two months of November and December to earn extra rewards from Amazon shipping. It’s important to evaluate your own numbers and consider your specific business needs when deciding on the best shipping strategy and credit card rewards program for your online selling business.