There are two types of sellers on Amazon — Amazon itself who sells a vast range of products, and third-party sellers who utilize the Amazon website as a platform to sell their own products. As there is no limit on the number of sellers or the amount of products they can offer, the same product is often sold by many sellers, each competing for the maximum amount of sales.
When a customer lands on a product page, Amazon chooses one seller and puts their details in the Buy Box — the white box on the right hand side of the page. When a customer clicks on the “Add to cart” button, the sale goes to the seller in this box. This seller is called the Buy Box “winner” and they will make far more sales than any other seller for that product.
The Amazon Buy Box was created in order to give the customer the best possible value for money. It determines which product offering promises the best balance of high seller performance and low cost price.
82% of Amazon website sales today go through the Buy Box, and this number greatly increases with Amazon mobile sales. It is therefore vital for sellers to understand how Amazon determines who acquires this coveted spot as it can really make or break an online business.
A seller can only compete for the Buy Box if they have a professional seller account (as opposed to an individual seller account), and if they are “Buy Box eligible” — which is a status awarded to experienced to sellers who have spent time selling on the Amazon platform and possess high levels of performance. Other requirements needed in order to compete for the Buy Box are selling new items rather than second-hand, and making sure there is enough available stock.
Once a seller has the ability to compete for the Buy Box, they have to learn exactly how to win it. We know that Amazon’s algorithm compares multiple variables of each offering to determine which offers the best overall value to the customer. The weights assigned to each variable can change on a product-to-product or a category-to-category basis, so even though a seller could be losing to a competitor on one product, the same seller could be beating that same competitor on another unrelated product.
There are many variables Amazon takes into account, including fulfillment method, landed price, shipping time, Perfect Order Percentage score, among others. The key is to utilize your resources on the ones that make the bigger impact on the Buy Box.
It’s no secret that there is a very stiff competition between third-party sellers on Amazon. In order to succeed, sellers need to be on top of the game, especially with regard to pricing. Price heavily impacts the Buy Box and therefore getting the right price is crucial.
Feedvisor offers an algorithmic repricing solution for Amazon sellers. Essentially, what the repricer does is to automatically change your product prices, according to the dynamic and constant changes in the market. Through self-learning algorithms that constantly improve and learn from each individual situation, the algorithms will find you the best price for your products, helping you maximize sales and overall profits.
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