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Have you ever wondered how dimensional weight pricing works? It can be confusing to understand, but with this guide, you'll have all the information you need to calculate it yourself. dimensional weight pricing is a system used by shipping companies to determine the cost of shipping a package. The price is based on the size of the package compared to its weight. This guide will explain how to calculate dimensional weight and show some examples so that you can better understand how it works.
You've done a lot of hard work to get online sales. Now it's time to think about shipping. As you may have realized, fulfilling orders isn't always as simple as placing the product in a box and mailing it off. For online sellers that want to maximize profit, you need a good shipping strategy.
First, let's discuss how shipping companies decide how much you will pay for shipping.
How Are Shipping Prices Calculated?
When you print a shipping label, you may have noticed that you need to know the package dimensions and weight (unless you're using flat rate shipping). Both size and weight factor into how shipping prices are calculated when you use your own box. The larger the package and the more it weighs, the more likely you are to pay extra.
So, what is dimensional weight?
Dimensional weight, also called physical weight or actual weight, is a calculation used by courier companies to determine the shipping cost for a package. The dimensional weight of a package is calculated by multiplying the length, width and height of the package in inches and dividing that number by 166.
For example, if a package is 18" long x 12" wide x 8" high, the dimensional weight would be 24 (18x12x8) / 166 = 1.425. So the courier company would charge for 1.425 pounds when shipping this package even though it only weighs 1 pound.
Shipping companies like FedEx, UPS, DHL, and USPS use dimensional weight for most shipments, excluding flat rate boxes.
But wait…there's more!
Let's talk billable weight, aka chargeable weight. You'd think that shipping companies would just charge you according to the dimensional weight of the package. After all, they went to all that trouble coming up with a complicated mathematical formula, right?
Well, that's not always the case. They will charge for whichever is higher — the dimensional weight or the actual package weight. That is the billable weight.
Here is an example
Martin just sold a toaster on eBay. The shipping box is 15" long x 10" wide x 8" tall. The package weighs 4 lbs.
Martin takes the package to his favorite shipping company, UPS. Like most carriers, they want to charge him for whichever is more: the actual weight or the dimensional weight. We know the actual package weight is 4 lbs. Now we have to figure out the dimensional weight.
Here is the UPS dimensional weight formula for domestic shipments:
Dimensional Weight = [ L x W x H ] ÷ 166
Martin’s package dimensional weight = [ 15 x 10 x 8 ] ÷ 166 = 7.22 lbs.
Since the result is a fraction, it gets rounded up to the nearest whole number. In this example, the final dimensional weight is 8 lbs.
Next, UPS will compare the dimensional weight to the actual weight. The actual package weight is 4 lbs. And the dimensional weight is 8 lbs. UPS wants to charge for the higher value; In this case, they will charge Martin based on the dimensional weight of 8 lbs.
Now let's see what happens if Martin uses a larger box to ship that toaster
A week later, Martin has sold another toaster. Cha-ching! This time, he puts it in a box that is 20" long x 15" wide x 10" tall. The actual package weight is still 4 lbs.
Martin takes the box to UPS.
UPS Dimensional Weight = [ L x W x H ] ÷ 166
Martin’s package dimensional weight = [ 20 x 15 x 10 ] ÷ 166 = 18.07 lbs.
Since the result is a fraction, it gets rounded up to the nearest whole number. That means the dimensional weight of this package is 19 lbs.
Again, the dimensional weight (19 lbs.) exceeds the actual weight (4 lbs.). So UPS will charge him based on the dimensional weight.
However, last time Martin shipped a toaster, he used a smaller box. As you recall, the dimensional weight was only 8 lbs. This time, he used a bigger box, and the dimensional weight has more than doubled!
Martin is bummed he has to pay so much. Next time, he will use a smaller box.
Related: USPS Flat Rate Boxes & Pricing: eCommerce Businesses
Refine Your Shipping Strategy to Save Money on Shipping
Since package size plays a big role in calculating dimensional weight, you should use the smallest box possible. You don't want a lot of empty space in the package. In general, the larger the package, the more you will pay.
For sellers with hundreds of SKUs or products of varying sizes, it's not practical to buy custom-size shipping boxes for each product. Instead, an assortment of boxes (small, medium, large) gives you the ability to choose the most appropriate box size for each shipment. There may be a little extra room in some packages, but it's better than being stuck with a single box size that is too large.
Small decisions like these can lead to substantial savings in the long run.
Related: How to Calculate Weight from Volume
How to Save Money on Shipping Costs With Dimensional Weight Pricing
Dimensional weight, sometimes referred to as dim weight, is a pricing method used by many shipping companies that calculate the cost of shipping based on both the actual package weight and its dimensions. The billing weight will be whichever is higher – either the actual package weight or the dimensional weight. Understanding how to calculate your shipment’s dimensional weight can help you save money on your shipping costs and manage your budget more effectively.
Tips for Reducing Your Shipment's Dimensions Include
- Use lightweight packaging materials: Opt for boxes made from corrugated cardboard that are lighter in weight yet strong enough to protect fragile items during transit. Consider using air pillows instead of packing peanuts, as they take up much less space inside packages.
- Minimize the size of the package: Use the smallest possible packaging that can safely contain your items. Consider using flat rate boxes or expanding envelopes to minimize space used.
- Consolidate your shipments: When you need to ship multiple packages, consider consolidating them into one shipment as much as possible so fewer packages are sent out and dimensional weight is reduced.
Related: How To Sell Wholesale On Amazon?
Examples of How Dimensional Weight Pricing can Impact Businesses Include
- If you’re a small business looking to save on shipping costs, calculate your dim weight before making any purchases so you have an idea of what your shipping costs will be. This will help you budget accordingly and make more informed purchasing decisions.
- Larger businesses may benefit from using an LTL (Less-than-Truckload) carrier, as they typically calculate dim weight when charging for shipping. This can help you save on shipping costs and reduce wasteful spending.
By understanding how to calculate dimensional weight and taking steps to minimize the size of your shipments, you can save money on your shipping costs and keep more of your profits. Knowing when to calculate dim weight and which carrier is best suited for your shipment will give you a competitive edge that could make all the difference in helping expand your business.
How Does Dimensional Weight Impact Shipping Costs?
When shipping goods, a package's cost is determined by two factors: its actual weight and its dimensional weight. When packages are small and lightweight, but take up a lot of space, they are subject to higher dimensional weight charges than those with greater actual weights. To calculate the dimensional weight of a package, carriers multiply the length times width times height of a package in inches and divide by a set dim divisor. This number is then rounded up to the nearest whole number to calculate the dim weight for the package, which will be used as part of the overall shipping cost calculation.
In general, if your packaged item’s dimensional weight exceeds its actual weight, you’ll pay more for shipping costs based on the higher dim weight. That’s why it’s important to calculate both the actual and dimensional weights of any package you plan to send, so you can accurately calculate the total cost for shipping. Knowing this information can also help you determine the optimal size and shape for packaging your goods in order to minimize overall shipping costs.
The concept of dimensional weight is one way that carriers attempt to address the issue of bulkier packages taking up more space on trucks or aircraft, while still allowing businesses and individuals to ship lighter items at a reasonable rate. While calculating dimensional weight may seem like an added layer of complexity when shipping goods, understanding how it works can be beneficial in helping you get the best rates possible.
You can use our dimension weight calculator.
Conclusion
Dimensional weight pricing can be confusing, but with this guide, you should have a better understanding of how it works. If you need help fulfilling Amazon orders, Simpl can help. We offer a variety of shipping solutions that will meet your needs and budget. Contact us today to learn more about our services and get started on fulfilling your Amazon orders!
Recommended: Cheapest Way to Ship Large or Oversized Packages.
