Amazon making big change that helps customers and sellers

Many of us are familiar with that now commonplace feeling. 

An Amazon  (AMZN)  delivery driver carefully drops off your package at the front door. You receive a notification that it's been delivered. You go to look at the confirmation photo indicating it's at your doorstep, and when you bring it in, you realize you have no idea what you ordered. 

Related: Walmart makes billion dollar tech acquisition that will delight customers

The big brown box isn't giving away any hints; it could be anything from toilet paper to a large plastic storage bin to a pair of new rollerblades. You'll never know until you open the box. Only once you open the box, you find there's actually another box inside of that one. Recycling day just got a lot bulkier.

This packaging redundancy isn't the fault of the consumer, who often has no idea how his or her good are going to arrive (though Amazon sometimes gives you the option to reduce your packaging if you're okay with its contents showing). It's simply a redundancy in Amazon's packaging process, which often favors speed and efficiency over waste reduction or cost effectiveness. 

And the result is a whole lot of boxes piled up in all of our garages, which then ultimately fill up a trash or recycling center. It's a lot to sift through, and it ends up costing Amazon more in the long-run. 

Amazon working on clever new packaging solution

Amazon is aware of this issue and has been working to reduce its packaging waste in an effort to improve shipping efficiency and reduce environmental waste. 

So in February, it began to expand its Ships in Product Packaging program, which allows certain goods to ship in the pre-packaged boxes or bags they're already stored in, to hundreds of thousands of vendors on the site. This might include boxes of coffee pods, boxes that contain multiple containers of disinfecting wipes, or boxes of paper products. 

If a large item is already packaged and stored correctly, Amazon re-boxing (or overboxing, as the company calls it) them in its own cardboard boxes is repetitive -- and often unnecessary.

Sellers are mainly eligible for the program if they're shipping larger objects. A small article of clothing, for example, would still probably need to be boxed in an Amazon package so it could fit a label appropriately and reduce possible damage along the road. But appropriately boxed and sealed larger items are expensive and wasteful to re-box, so Amazon will offer sellers incentives if they want to ship in their own packaging.

Those incentives will come in the form of savings on fulfillment costs. It will vary depending on the size and product, but Amazon says sellers can save between $0.04-$1.32 per unit. Even if a customer chooses to have their order repackaged by Amazon, sellers will still be eligible for the discount.

Amazon says it had previously only shipped about 11% of orders in their original packaging, but expects that number to increase over time, especially as incentives are offered.

Its efforts are already changing the way packaging is perceived. In 2023, Amazon partnered with Procter and Gamble  (PG)  to change how certain products, like Tide laundry detergent, is packaged, changing it from a a plastic jug to a sturdy cardboard box so it could ship in its own packaging.

“One seller might have to make a very minor change in order to meet our eligibility criteria. Other sellers might have to sort of think about their packaging in a bigger way and maybe sort of change the format altogether to meet standards,” said Kayla Fenton, senior manager of packaging innovation at Amazon.