University - Winning the Buy Box
Amazon Buy Box
What Is the Amazon Buy Box?
E-commerce is predicted to account for 17% of all U.S. retail sales by 2022. With Amazon at the helm of the industry, it’s go-time for sellers to get on board with several aspects of online retail such as digital marketing, optimizing for mobile, business process automation, and establishing a brand that can endure the test of time in order to stay in the game.
However, understanding the ins and outs of the Amazon Buy Box will always be top priority for competitive third-party sellers, due to its high-impact on conversions. As there is no limit on the number of sellers or the amount of products that they can offer on Amazon’s marketplace, the same product is often sold by many sellers, each competing for the maximum amount of sales.
Most consumers buy items through the Buy Box section (the white box on the right hand side of the page) on the desired product page. When a consumer proceeds to buy the product through this section, the seller which is highest ranked by Amazon at that time will show up there. The Buy Box winner will go on to make more sales than any other seller for that product (unless of course there are multiple high-ranked sellers – then, they will rotate in the Buy Box, each gaining their share of product sales).
Aligning with Amazon’s customer-obsessed mantra, the Amazon Buy Box was created in order to give the customer the best possible value for their money. It determines which product offering promises the best balance of high seller performance and low price.
Over 80% of Amazon website sales today go through the Buy Box, and this number increases with Amazon mobile sales. It is therefore imperative for competitive sellers to understand how Amazon determines who acquires this coveted spot, as it has a direct impact on profitability.
How to Win the Amazon Buy Box
A seller can only compete for the Buy Box if he or she meets the below criteria:
1. Has an Amazon Professional Seller account.
2. Is “Buy Box-eligible,” a status awarded to experienced sellers who have spent time selling on the Amazon platform and possess high levels of performance.
3. Sell new items rather than second-hand. There is a separate Buy Box for used items.
4. Has available stock of the item competing for the Buy Box. Backordered items can now win the Buy Box, but the algorithm favors sellers that constantly have adequate inventory.
The Variables that Affect the Buy Box
Once a seller has the ability to compete for the Buy Box, he or she has to learn exactly how to win it. We know that Amazon’s algorithm compares multiple variables of each offering to determine which gives the best overall value to the customer. The weights assigned to each variable can change on a product-by-product or a category-by-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 that Amazon takes into account, which are outlined below. The key is to invest your resources in the ones that make a bigger impact on the Buy Box.
Sellers who choose FBA (Fulfillment by Amazon) or SFP (Seller-Fulfilled Prime) are usually at an advantage to those who sell FBM (Fulfillment by Merchant), with all other variables being equal.
This is the total amount that the product is sold for on Amazon. The lower the seller’s performance metrics are compared to other sellers, the lower they’ll need to lower their price to try to win the Buy Box. On the other hand, if their metrics are high, they could raise their price and still win.
The quicker you ship, the better off you are.
Backordered items can be featured in the Buy Box, but items that are immediately fulfillable are favored by Amazon’s algorithm so avoiding backorders should be a priority for all sellers.
Order Defect Rate:
This is a combination of the Negative Feedback Rate, the A-to-Z Guarantee Claim Rate, and the Service Chargeback Rate.
Valid Tracking Rate:
This is the percentage of deliveries sent with full tracking information.
Late Shipment Rate:
This is the number of orders shipped later than the expected ship date.
This is the percentage of orders that were delivered on time.
How well people have rated you (especially recently) makes a difference.
Customer Response Time:
How quickly do you respond to customers? If you take too much time, it will negatively impact your chances of winning the Buy Box.
This is how many people have given you feedback. Obviously the more customers, the better.
Inventory Depth and Sales Volume:
Having enough inventory consistently will put you in a better position than if you have big fluctuations in inventory.
Cancellation and Refund Rate:
If you cancel on a customer who has made an order too often, it could have a negative impact on your seller performance.