• Amazon Removal Order Price Hike

    By ZonSupport | Posted on May 12, 2022| Blog

    We consider Amazon a fulfillment company as so much of a Seller’s cost on this platform relates to shipping products to their warehouses, paying for them to be shipped to customers, paying for returns, and paying when you need to remove stock for a wide variety of reasons.

    There have been some small but subtle steps by Amazon to ensure when processing removal orders, the revenue generated from the space used in their delivery vehicles and on planes is maximized.

    Dimensional Weight is now used as the basis for setting Removal Order pricing.

    Not sure exactly what Dimensional Weight (DIM) is? It’s a pricing technique that uses an estimated weight calculated from the length, width, and height of a package. This is a theoretical weight based on the minimum density chosen by the freight carrier. If the package is below this minimum density, then the actual weight is irrelevant as the freight carrier will simply charge for the volume.

    All freight companies use this – DHL, UPS, USPS, etc as well as Amazon of course. Amazon’s DIM factor for imperial measures is 139 which is similar if not identical to others.

    Here’s the calculation: (length x width x height) / (dimensional factor)

    Most Seller’s will be familiar with DIMs if they have managed shipments to the US or set up their listings on Amazon. However, if you are tasked with managing inventory in Amazon and focused on maintaining the best IPI score that you can, you may be using removal orders without realizing their updated cost just took your overall margin down to zero – or worse! Here’s why…

    If you navigate to Amazon’s FBA removal order fees page they state as always that Removal fees are charged per-item removed. However, scroll down to their Rate Card and you will see there are only two tiers – Standard Size, and Oversize & special handling items ie there is no Large standard, Small, Medium, and Large oversize tiers:

     

    These tiers are actually based on DIMs and thus the cost per product removed may have gone up considerably – some clients have seen nearly triple the cost!

    Amazon’s fulfillment network is arguably now in place, so the only way to drive year-on-year growth is to ensure they maximize every square inch each product takes up from the time they enter their system to the time it is delivered. By applying DIMs across the board, they just landed an extra windfall.

    Go check your math right now so you know the true net-net cost per product on any removal order. The starting place is to run your Monthly Storage Fees report so you can see the product dimensions for your existing FBA inventory. 

    Download the report

    Identify the product of interest by its FNSKU

    View the Product dimensions in the longest-side, median-side, and shortest-side fields

    Use the formula above to calculate the product volume and convert to dimensional weight

    For products that are already being sold in Amazon stores but you do not sell, you can look up the product dimensions to calculate volume by using the Revenue Calculator. To do so:

    Search for the product of interest

    View the Package Dimensions values

    Use the formula above to calculate the product volume and convert to dimensional weight

    For products you currently have in FBA inventory, you can look up the size tier using the Fee Preview report. To do so:

    Download the report

    Identify the product of interest by its FNSKU

    View the product size tier in the product-size-tier field

    Need help. Reach out to us. We’re working with clients on a daily basis to navigate their way through this and many other challenges on Amazon and other e-commerce platforms.

    As always, ask us anything. If we don’t know the answer, we’ll know someone who does!

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