What is the Buy Box Formula?
Everybody wants to know the Amazon Buy Box formula because everyone wants to know how to win the Buy Box! Unfortunately very few people are privy to it, and those people just happen to sit in the elite, inner circle of Amazon.
What the Buy Box formula is not
A plethora of articles have been written about how to outsmart the Buy Box, and while many of them might work in specific situations, these are generally oversimplified, outdated, or just plain wrong.
Below are the most commonly spread rumors about the Buy Box:
1. Lowest price point manipulations
This is a theory that emerged in the summer of 2012. It claims that if a seller undercuts the lowest competition by a certain percentage and then takes off an extra penny, they will always win the Buy Box.
After testing this theory extensively with multiple products, at multiple price points and in multiple categories, it is evident that this is not a fixed rule.
The idea may have gained popularity because when it was tested on low-end products, it created a lot of false positives.
Although lowering prices always increases one’s chances of winning the Buy Box, as will be discussed, the claim that a certain equation will guarantee the Buy Box, certainly holds no truth.
Continually lowering the price creates price wars between sellers, driving down profit margins on all sides.
2. The 2% Rotation Rule
Another false assumption is that if a seller’s price is within 2% (or other percentages) of the current Buy Box winner, that seller is guaranteed to win the Buy Box at least a certain percentage of the time, as the Buy Box rotates between sellers.
Again, there is no evidence to support this theory. Although it does often work when tested, this is another example of false positives.
Buy Box rotations do exist but this has nothing to do with “The 2% rule”.
While rotations are certainly an integral part of the Buy Box, to assume that they can be manipulated entirely by price has been proven wrong time and time again.
What the Buy Box formula is
It does not take a simple formula to work out how to “win” the Buy Box. Rather, the “formula” is in fact a complex and multi-faceted algorithm.
This algorithm takes into account many layers of information gathered about the marketplace, market conditions, and all the sellers. It’s simply too simplistic to say that the only thing the Buy Box takes into account is price. In actuality, Amazon want to promote the seller that offers the best possible balance of price versus performance.