Make Sure You Are Not Overpaying Amazon For Shipping!
Over the last few months many Amazon sellers have lamented increased shipping costs, increased production costs, increased tariffs, and more. Have any of these things been eating into your profit margins?
Regardless of if they have or not, you no doubt want to be making the most profit you can for your product. One way to do that is to make sure you are not overpaying Amazon for shipping your product via FBA.
Last year, I wrote about one time where I almost cost the company $3,000. What had happened was that Amazon changed the dimensions on the box of the Project X coffin shelf, and that small change resulted in months of us overpaying for shipping since I did not fix the issue right away.
Trust me, you do not need to have a $3,000 dollar mistake for it to be worth keeping a close eye on what you are paying. Here’s a recent example of something that happened to me a couple of weeks ago in our “Project 5K” case study account.
Giving an Inch, Losing a Mile
I have all of the Project 5K products activated for the Helium 10 product monitoring tool, Alerts, which notifies me when things happen to the products. Take a look at this alert I got on May 5:
What happened was Amazon seemingly changed my dimensions. For the most part, it was not any major change. A few tenths of an inch here or there. But the height went from 2.89 all the way to 5 inches! That’s nearly double!
I decided to check what the approximate difference would be for my Amazon shipping fee. So I went to the product and ran the Profitability Calculator, inputting the original dimensions vs. the new dimensions…
That small change in width from 2.89 to 5 inches resulted in this product being charged THREE more pounds of shipping weight since Amazon charges for dimensional surcharges! Thus as you can see, I would have had to pay much more per EACH unit to ship this!
What did I do?
I immediately went to measure the product to see what the real dimensions were.
Sure enough, it was only 3.5 inches, not 5. However, it was more than the original 2.89 that was there.
Where Do I Go From Here?
I opened up a case with Seller Central the same day and submitted the above photo to them showing the real dimensions.
Amazon replied with a message that they respond to re-measurement requests within five business days, but that it could take longer. In this case, it took longer. They did not verify the dimensions until May 23.
However, it was good news!
They admitted that there was a mistake on the dimensions and sent me reimbursements totaling $98.04.
Now remember, the SAME DAY that they changed the dimensions, I opened this case. I was able to do it so fast thanks to the Alert that I got from Helium 10.
However, despite that, almost 20 days passed. All the while I was still selling this product, but being charged at the higher shipping rate. This is not a big selling product… in those two weeks, I only sold about 75 units. But that means that for 75 orders, I was paying around a dollar more than I was supposed to, thus it added up to almost $100.
That is just a single product. Thanks to Helium 10 I just got back money that equals more than an entire month of the Helium 10 Platinum Plan.
It Pays to be Vigilant!
But what if I didn’t have Alerts and never knew that Amazon made this change? Last year, this product was selling an average of about 300 units a month. Imagine if I had no idea I was overpaying and did not catch it until a year-end audit.
Guess what? That’s $3,600 dollars that I would have overpaid!!!
What if this was a bigger seller…something that sold 30 units every day? What if they had added another inch, and my shipping price went up to $1.75 per unit? Now, we are talking about $20,000 in lost profit due to Amazon changing just 2-3 inches on ONE side of my product package! Do you see how dangerous this is?
Regardless of if you are being overcharged $20,000, $3,000, or even $98, you should be making sure you are not overpaying Amazon for shipping.
Every dollar counts when you are running your own business. Make sure that all of your products in your account have Alerts activated on them so that you can be notified if your dimensions are changed!
If you did not have Alerts activated, and you don’t know if or when Amazon changed dimensions on you, do an audit on all of your products right now to make sure that the dimensions are correct!