Dimensional Weight Pricing: How Amazon's DIM Could Hurt Your Profits - And What FBA Sellers Can Do About It

There are a number of Amazon fees affected by the dimensional weight (DIM) pricing of products. It already existed as an aspect of some fees before the 2023 increases, but as of February 16, it now affects apparel. That new inclusion comes on top of the increased granularity and effect DIM pricing has on a seller’s overall fee calculation. 

We discuss this in more detail inside our white paper Attack of the Fee Stack, which illustrates every aspect of the 2023 fee increases with in-depth analysis and case studies. 

RELATED: Download the Free Carbon6 White Paper, “Attack of the Fee Stack”

This free educational paper was put together by our team of experts and contains explanations, tips, and strategies to help your business stay profitable during the fee hikes this year, and any that may come in future.

While it may not be a “fee” as such, DIM weight pricing is all but ubiquitous in the way it can affect your costs, and poses a true threat to your profits as an Amazon FBA seller. To know how to fight back, though, you must first understand what DIM is and exactly the effect it can have on your business.

What Is Amazon’s Dimensional Weight Pricing (DIM)?

DIM weight pricing is a method used by Amazon to determine the cost of shipping a package based on its size and weight. This pricing method takes into account the amount of space a package takes up on a truck or plane, rather than just its actual weight.

The formula used to calculate dimensional weight is typically length x width x height (in inches) / a dimensional weight divisor.

In Amazon’s case, that divisor is 139, which is most common within the US shipping industry standard; it is 5,000 for calculating the DIM weight of packages shipped across the UK/Europe.

RELATED: The Best Amazon Pricing Strategies for 2023: A Seller's Guide

The resulting number is then compared to the actual weight of the package, and the greater of the two values is used as the package’s billable weight for shipping purposes.

Simply put, if a package is large but relatively light, it would have a higher DIM weight than actual weight, so the DIM weight would be used as the billable weight.

How Is DIM Weight Pricing Used?

In 2022, Amazon introduced new DIM weight pricing, which applied to its entire catalog, excluding apparel. It was used to calculate fulfillment fees for large standard-size SKUs, as well as small, medium, and large oversize SKUs, and applied to multi-channel fulfillment (MCF) and Small & Light. 

Along with large standard apparel no longer being exempt from DIM weight pricing as of 16th February 2023, it has begun to saturate the way almost every other fee is calculated. This includes FBA fulfillment fees, as well as others like removals, Multi-Channel Fulfillment (MCF), and even Remote Fulfillment in North America (NARF).

Being charged fees according to DIM weight as opposed to actual weight can seem unfair when it causes a sudden cost increase, which is why it is important to consider both the weight and volume of SKUs and maintain the most cost-efficient balance. 

The 2 Biggest Issues Dimensional Weight Pricing Causes Amazon Sellers

With this understanding of DIM weight pricing, let’s take a look at how it can affect costs and profitability in 2023. 

1. Increased Shipping Costs

Shipping companies have used DIM weight for several years. A higher DIM weight than actual weight will cause an increased shipping cost, no matter who ships a package. 

The logic behind DIM weight pricing is that a package is charged based on the volume it takes up on a plane, truck, or boat, as opposed to the weight. 

RELATED: Amazon’s 2023 Fee Hikes Are Here! Can FBA Sellers Protect Their Profits?

Think of it as a ton of feathers vs. a ton of steel: they both weigh the same, but because feathers are less dense than steel, they could take up more room and resources.

To see this in practice, here is the effect of a DIM weight calculation on a two-pack of queen-sized pillows, as seen in our free white paper, 

‍

‍

You can see other examples, as well as a layout of the entire Amazon fee structure, and how DIM weight affects it, in Amazon’s full report on its 2023 fee changes in Seller Central.

Being charged shipping by volumetric weight rather than actual weight can increase fees and shipping costs on large but light SKUs such as lampshades, pillows, etc. These increased costs can cut into the profits of each SKU unless prices are raised or a way is found to lower costs. 

2. Unexpected Fees

There are a few places that DIM weight pricing is now popping up that you might not expect: 

• Hidden inside multi-channel fulfillment (MCF) fees. Now DIM weight pricing may be used to calculate the shipping cost for SKUs that are fulfilled by Amazon for non-Amazon sales.
• DIM weight for packaged items was added to the calculation of removals and disposals in 2022, and fees are set to increase in 2023.

While the DIM weight itself is not used to calculate some of the new and increased storage fees, they are affected by the volume of stored inventory. 

Since DIM weight and volume are closely connected, how long and where you store your product is definitely something to keep in mind, especially after the new storage utilization surcharge Amazon is introducing in 2023, and the way it is changing its FBA aged inventory surcharges.

Viable Fixes or Workarounds for Amazon Sellers

Optimize Package Size

It might seem obvious, but reducing the package size can reduce the shipping cost. Working with suppliers or manufacturers to reduce the size of packaging will make a big difference to reducing affected costs. 

Simple steps like vacuum packing soft products like pillows, padded jackets, or plush toys can greatly reduce their volume. Products that require customer assembly such as electronics or furniture can be rearranged within packaging to reduce their DIM weight.

RELATED: How Amazon Sellers Can Grow Off-Amazon Traffic to Increase Profitability

Audit your products for their DIM weights and speak to suppliers/manufacturers to work together on bringing the billable weight down.

Depending on your current inventory and sell through rate, it might take a while for this strategy to show results, but optimizing the packaging of your products will only be beneficial in the long run.

• Smaller packaging will help you fit more per carton or pallet, helping reduce overall shipping costs. 
• Less packaging will reduce materials and costs required.
• More carefully packaged products will reduce in-transit damage and increase customer satisfaction.

Negotiate with Carriers

Nobody ever pays less without having to ask! Negotiating or renegotiating with your carriers is a good place to reduce costs. 

It can be awkward, especially in light of the supply chain troubles and increased charges for fuel in the last few years, but it’s a great step to reduce costs. Once you get through that awkwardness, it might even result in a way to foster a stronger relationship with your suppliers and carriers. 

Use Third-Party Shipping Solutions

Amazon prides itself on fast and cheap shipping, so much so that even in the 2023 fee increase announcement, it maintained that:

“Amazon’s fulfillment fees will remain an average of 30% less expensive than standard-shipping methods offered by other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.”

But that doesn’t necessarily mean it will always be cheaper. Other carriers use a different DIM weight divisor than Amazon’s 139. Yes, it is the most common with FedEx and DHL also using 139, but USPS uses 166, as does UPS for its retail rate.

Auditing the costs of shipping your products yourself vs. the increased fees through FBA could help you see where you can cut costs. 

DIM weight pricing is gaining traction within Amazon’s fee calculations. Being aware of your catalog’s DIM weights, as well as which fees will be affected by them, will help you face them without worry of extra hidden charges.