AWS offers cost savings through economies of scale by allowing customers to pay only for the resources they consume. Rather than investing heavily in physical infrastructure and its maintenance (which often includes overprovisioning to meet peak demands), AWS's massive scale allows for resource pooling and sharing among a vast customer base. This results in lower operational costs due to the shared infrastructure, and customers benefit from the reduced costs due to AWS's ability to purchase and operate resources more efficiently than individual companies can typically achieve on their own. By leveraging AWS's optimized and scalable infrastructure, the company can avoid up-front capital expenditure and instead utilize a variable cost structure that adjusts with their actual usage, leading to significant cost savings.