New Dimensional Weight Fees Placing Further Strain on Profit Margins

We knew that an increase in FBA fulfillment fees was coming since Amazon does this yearly. However, we didn’t expect to see dimensional weight fees on the list because the eComm giant was so quiet about it. Apparently, dimensional weight pricing will now apply to Large Standard-Size products if the dimensional weight is greater than the unit weight. 🤔

When reading through the 2022 US FBA Fulfillment Fee Changes page, Amazon seems to be attempting to bury the lead with dimensional weight being tucked away in the footnotes as something that doesn’t exactly stand out, even though we believe it’s the most important change to the new fee structure.

Being charged based on dimensional weight could potentially be a huge cost increase for some sellers. In fact, some within our own SoStocked community have already seen their fees increase by over $1 per unit, which is quite significant.

Read on to learn more about the impact of Amazon’s dimensional weight pricing on sellers’ profit margins.

Dimensional Weight Now Used for Large Standard-Size Items

According to Amazon, the greater of unit weight or dimensional weight will now be utilized to determine the shipping weight for all Large Standard-Size units, apparel not included.

Unit weight is the actual weight of an item, including its packaging. Dimensional weight (or DIM weight) is the amount of space a package takes up relative to its actual weight. DIM weight is calculated by multiplying the length, width, and height of your unit, then dividing that by a standard DIM divisor.

A DIM divisor is a number set by FedEx, UPS, and other carriers that represents the volume of a package allowed per unit of weight. For dimensions in inches, Amazon uses a DIM divisor of 139 for units subject to DIM weight pricing.

Amazon DIM Weight Pricing Sample Calculation

Let’s say you’re shipping an iron to FBA with the following measurements, packaging included:

• L (in) = 12.6
• W (in) = 6.6
• H (in) = 5.5
• DIM Divisor: 139

(12.6” x 6.6” x 5.5”) ÷ 139 = 3.29lbs or 4lbs (rounded up) DIM weight

Now, let’s find out how much it would cost you to ship an item that weighs 4lbs (assuming that your item’s DIM weight is greater than its actual weight).

Before January 18, 2022	January 18, 2022 onwards

Size tier	Shipping weight	Fulfillment Fee per unit	Size tier	Shipping weight	Fulfillment Fee per unit
Large standard	6 oz or less	$3.47	Large standard	6 oz or less	$3.54
	6+ to 12 oz	$3.64		6+ to 12 oz	$3.77
	12+ to 16 oz	$4.25		12+ to 16 oz	$4.52
	1+ to 2 lb	$4.95		1+ to 2 lb	$5.14
	2+ to 3 lb	$5.68		2+ to 3 lb	$5.79
	3+ lb to 20 lb	$5.68 + $0.30/lb above first 3 lb		3+ lb to 20 lb	$6.13 + $0.30/lb above first 3 lb

Based on the new table of fees above, you would be charged $6.43 per unit ($6.13 + $0.30/lb above first 3lbs), approximately a $0.45 increase from last year’s rates.

If you’re selling that product for $15 apiece, that leaves you with a $8.57 profit before other costs, such as production costs, shipping cost from China to US, and advertising. This change could eat significantly into your profit margins, especially if you’re selling a low-priced product.

This could also make it difficult for you to stay competitive in the market, as you would be forced to increase your selling price in order to recoup your investments. Unfortunately, doing this might turn some customers away.

It’s also important to note how Amazon classifies Large Standard-Size:

• Any product that is 16oz. with its longest side 15 inches, shortest side 0.75 inches, and its median side 12 inches is considered Small Standard-Size.

Beyond that, any unit that does not fall within the Small Standard-Size category and is 20 lbs or less with its longest side 18 inches, shortest side 8 inches, and median side 14 inches is considered a Large Standard-Size. So, anything with a side that exceeds the given dimensions might get bumped into oversize classification, which means even higher shipping costs.

What You Can Do

With DIM weight being one of the main factors that influence today’s fulfillment fees, now’s the time to reassess your packaging.

Achieve the smallest dimensional weight possible by:

• Keeping your packaging compact
• Removing extra inner packaging materials that can make boxes unnecessarily large, such as excessive amounts of foam or bubble wrap

Keeping your packaging compact will allow you to fit more units into your cartons. And if your shipments take up less space and weigh less, that also means carriers will be able to load more cartons into their trucks and planes, leading to lower shipping costs.

Additionally, reducing or eliminating excess packaging materials is also an excellent way to introduce more sustainability to your products, as less waste will end up in the ocean or landfills.

This DIM weight pricing, in fact, is in lockstep with some of Amazon’s other initiatives and policies that point towards encouraging sellers to reduce their packaging. This is further supported by the fact that they launched the size-conscious Compact by Design initiative within the Climate Pledge Certification program, which aims to certify products that meet their sustainability standards. These policies encourage or even force sellers to get more creative with keeping their packaging compact.

Another way to keep your costs down is by checking your fees and running some profit calculations to make sure your products are still profitable. We’re currently building a tool to help you with this. We will let you know once this tool comes out, so stay tuned!

What Else to Expect

Amazon will hit every product size tier and category with a fulfillment fee increase, specifically the following:

Core FBA fulfillment fees (apparel excluded).
Calculating the shipping weight for all Large Standard-Size items will be based on whichever is greater between the unit weight and dimensional weight. Small Standard-Size units will use unit weight.

FBA fees for apparel.
Amazon implements up to a 10% increase for apparel items in the Clothing & Accessories category.

FBA fees for dangerous goods.
Amazon has separate fulfillment fees for dangerous goods that need special handling and storage. Visit the FBA Dangerous Goods (Hazmat) Program or Dangerous Goods Identification Guide for more details.

Dimensional weight pricing will also apply to all Small Oversize, Medium Oversize, and Large Oversize units when DIM weight is greater than the unit weight. This is a bit tricky as it doesn’t seem to be the case toward the top of the post, but when you scroll down to the Calculate the Shipping Weight section, you’ll find more information listing this.

The recent fulfillment update also includes some changes to the maximum weight limit for products in the Small and Light (SnL) program. Amazon will now allow eligible products priced at $8 or less weighing up to 3 lbs (used to be 12 oz max) into the program. The per-unit FBA fulfillment fees start as low as $2.35 (Small standard) to as high as $4.94 (Large standard).

New US FBA Fulfillment Fees Break Down

Based on the fee changes listed on this page, the percentage increases for all standard and oversize categories range from 2% to 12%, not factoring dimensional weight into the equation.

Items in the small standard category will see an increase of 8%. For example, smaller items will see a $0.22 increase, and larger items will see a $0.27 increase.

Overall, expect to see the following percentage increases:

• Approximately 4.8% average increase for standard-size items
• Up to 7.5% increase for small standard-size items
• Up to 2.8% increase for small oversize items
• Up to 10% increase for apparel items
• Approximately 8% and 12% increase for medium and large oversize items, respectively

The fulfillment fee increases may seem small, but these changes could be pretty steep for some sellers with slim profit margins. This could put them in a difficult situation where they may have to either drop their less profitable products or increase their prices, thereby risking a significant decline in sales. Sellers will weather this storm as they do any other, but it’s definitely time to reassess your catalog for bulky and lower-margin items.

Go to the 2022 US FBA Fulfillment Fee Changes page to see the complete list of updated fees.

Related: Amazon FBA Calculator: Factor FBA Fees to Calculate Profitability, Amazon Climate Pledge Certification and Freight Forwarder Fees Checklist