Every seller wants the ‘Buy Box’ and stay there for the maximum amount of time. Do you want to know why? Its because 75% – 85% sales occur through this buy box. Amazon shares the buy box period among its FBA sellers and these rotations are hidden from its customers.
Hundreds of theories and speculations are out there regarding breaking the buy box code. While none of them can exactly know how the algorithm works, we can always estimate and learn the range of the algorithm through our experiences.
- FBA vs FBM. Keeping the price same, FBM merchant will not win the buy box in the presence of an FBA merchant. Many times an FBA seller with more price still wins the race to buy box from FBM merchant.
- New vs Used Items. Product needs to be categorized as a new one. Used products do not qualify to win the buy box.
- Pro vs Individual Account. Only sellers with a professional account are eligible to contest for the buy box.
- Inventory in Stock. Amazon is extremely sensitive when it comes to product availability and is inclined towards sellers that have the capacity to take bigger orders. They will prefer to give the buy box opportunity to a seller with hefty stocks in the fulfillment centers.
Factors in Winning the Buy Box
Amazon takes into account several data points by breaking down the performance into different variables for each eligible sellers’ performance. It evaluates the performance on a specific variable on a comparative scale i.e. relative to other seller’s rank/score on the same variable.
Competitively Priced. Price is the king and its weightage is maximum in winning the buy box. In the spectrum of price range of all competitors, products with the lowest price and are not outrageously priced usually win the battle.
Competition with Amazon. DO NOT COMPETE WITH AMAZON! You do not want to be in competition with a product that is sold by Amazon. No surprise but there is a natural inclination of the algorithm towards its own brand and Amazon will more often or so come out as a winner. You need to be selling an item that Amazon does not sell themselves to secure the buy box.
Geographical. Not many sellers are aware that customers from one state will see a different seller’s product in another state. This is because Amazon has spread products in warehouses nationwide and the products that happen to be in the warehouse near the customer’s location will be available in the buy box.
Order Defect Rate (ODR). An order has a defect if it results in negative feedback, A-to-Z guarantee claim that is not denied or a credit card chargeback. ODR needs to remain under 1% and sellers with high ODR should not expect to be in the buy box race.
Performance Metrics. A seller account’s health is referred as its adherence to the performance targets and policies required to sell on Amazon. Amazon holds the seller performance history, regularly reviews performance of all sellers and prompts them when they are going off the radar.
Service Quality. This mainly refers to feedback about the merchant after product sales. You have to target and then maintain a good feedback score by taking customer care to the next level. This way Amazon can reliably award you the buy box again and again.
Tenure on Amazon. Seller lifetime is an important factor. If merchant A is selling the product for 5 years and B for 1 year then probability of winning the buy box will be in favor for merchant A majority of the times.
Beginner’s Luck. This is a good news for newbies which is not widely known. If Amazon has a stack of old sellers with negative feedbacks and you walk in as a new seller then Amazon will give you preferential treatment by giving you the buy box. You might think that Amazon is generous to its new sellers and may be this is a step to encourage its new sellers, you’re wrong! Amazon wants to please its customers by providing them a new option that just got available.
How Will You Lose It?
Losing to Hijackers. This happens when a seller connects their listing to another seller and offers a matching product with the same price. Amazon will deal with them like all other sellers and resultantly you will have grimmer chances in winning the buy box. That is where private label sellers reap the benefit after registering trademark and brand to get extra protection.
Box Sharing. Sometimes Amazon shares the buy box with other sellers when according to them there is a tie between sellers.
Price Variations. There are sellers who work by changing their prices way too often. This constant change in your price gives Amazon an impression of inconsistency and as a result a merchant might lose onto the buy box. You need to behave like a brand that offers occasional may be periodical price variations so that Amazon can develop trust in you and pass it on to its customers.
Price Too High. Pricing outrageously as compared to other competitors will also make you lose the battle of the box. You need to stay within the gamut of the price range of your competition.
How Does the Algorithm Work?
We all know that Amazon devises its policies with an obvious pivot towards its buyers and they describe their customer centric philosophy in their own words as ‘customer obsession’. Lets be clear that the algorithm is and will remain on the buyer’s side not on sellers. It ensures to put forward the best offer to its customers in terms of the factors mentioned above. If the product is not providing value to the customer in Amazon’s opinion then it is highly likely that it will not be in the buy box.
The algorithm breaks down your performance as a seller and the buyer into bits of variables. You need to think every part of your (as a seller) and product interaction with the buyer and beef up your performance levels on each variable no matter its significance in your eyes.
Low Competition. There are high chances that you might have to share the buy box if you are operating in a niche. This means that Amazon will share the buy box with one of your competitors.
High Competition. Price and fulfillment will take the back seat and competition will mainly be on other factors discussed earlier.
Buy box is a game changer. You need to work hard for it but don’t get too obsessed and hung up that this is the only way. One liner summary would be that Amazon needs you to be on your toes at all times from the day your inventory arrives in their fulfillment centers to the after sales.