As soothing as peeling Tuesday Morning and Big Lots labels can be, that isn’t the reason most of us started our Amazon business. We deal with scanning endlessly through the aisles, going through spreadsheets, and carefully bubble wrapping and polybagging our merchandise because we are looking to make a profit. But there is something fairly new to the Amazon FBA seller’s world. One that I find more and more is causing people to LOSE money without even knowing it.
You might have heard that there was a change in the charges for dimensional weight. You might even have changed your buying habits so you stay away from bigger items to avoid having to think about the whole thing. Unfortunately, if you (or whoever is packing for you) is/are not thinking about dimensional weight you can easily lose part or even all of your projected profit on an item.
Back in the good ole days of 2014 and earlier if a box was less than 3 cubic feet then you were only charged how much the box weighed. It was wonderful! However, as of this year all that changed. No matter how small your box is you are now being charged the dimensional weight of your box.
Dimensional weight is basically a way of charging for the amount of room an item takes up in the truck. Before, shipping a box of shoes and a King Size pillow could have been the same- but now they are charging for the extra room that pillow is taking up.
So how much could this really be costing you? A lot more than you think!
Let’s say you find these really great penguin pillow pets on sale for a mere $6.99. It’s rank is under 5,000 in toys and your favorite scanning app lets you know you will make 13.33 including $0.50 per lbs. for inbound shipping before your costs of goods. Woohoo! Before you start loading up that cart…. Once you squeeze two pillow pets per small Home Depot box your profits will drop from 91% down to around 51% when you add in the extra $2.50 you will pay in dimensional fees (before any labor or the cost of the box itself).
|Penguin Pillow Pet||21.14|
|Cost of Goods||6.99||6.99|
Want to look at an even scarier example? Too bad- we are going to anyway. You find a giant bag of Popcornopolis Naked Popcorn. The bag is 27 x 6 x 12 inches. Let’s say you find the perfect size box for free. The popcorn is selling for $23.97 and your buy cost is only 4.99! You run it through the FBA calculator or your favorite scanning app and it looks like a win- 156% ROI assuming the same $0.50/lb. for inbound shipping. When you adjust the numbers to include the dimensional weight (14 lbs. for this size item) your profit is reduced to a small $1.79 about a 36% ROI.
|Cost of Goods||4.99||4.99|
So does this mean the end of selling on FBA? Should we be watching for the sky to start falling? No – it just means that we need to make sure we are thinking about dimensional weights when we are sourcing and packing.
Here are some things you can do to keep dimensional weights from eating your profits:
Watch for large and light items-
Popcorn, pillows, and potato chips- oh my! Does this mean you can’t sell these items? No! Just make sure you are taking into account dimensional weight before you send them off to Amazon.
Cut it out
– Instead of filling that box with air pillows and Kraft paper- use a carton re-sizer or box cutter to size your box to fit your products.
Aim for perfection-
Use the chart below when packing your boxes. These weights are for Home Depot size boxes. . If you use different boxes make your own target chart – using the calculator here – http://www.fedex.com/gb/tools/dimweight.html
When boxes are packed try to aim to have them weigh as close to or over the dimensional weigh for the box. (i.e. You should try to get all small Home Depot Boxes to weight at least 14lbs, mediums should aim for 32lbs, and large should be as close to 47lbs as possible.) It is fine if they are over the dimensional weight target below, but avoid sending in boxes lighter than their dimensional weight.
|Home Depot Box Size||L||W||H||Dimensional Weight|