Introduction to the Buy Box
Amazon is built to succeed by motivating third party sellers to provide a particular kind of experience to Amazon customers, emphasizing superior value and customer service.
They have established a set of criteria that they believe, when adhered to by the third-party sellers on Seller Central, will provide that experience to their customers.
As a way to incentivize sellers to follow those criteria, Amazon tracks each seller’s performance metrics relative to established goals for those criteria and features the highest performing seller’s product in an area that is highlighted to buyers. Amazon has branded this highlighted area as the “The Buy Box.”
As a result of winning the Amazon Buy Box, those sellers are rewarded with a competitive advantage that typically results in much higher sales volume than they would otherwise achieve for that item.
Awesome Dynamic® is happy to share this How to Win the Amazon Buy Box guide with you, as well as provide a few strategic tips on how you can gain the competitive advantage when you dedicate your efforts to winning the Amazon Buy Box.
ALL ABOUT THE AMAZON BUY BOX
The Buy Box, Defined
Although other sellers may be selling that same item, the Amazon Buy Box assigns the sale to one particular seller when the shopper clicks on the “Add to cart” button. That seller is said to have won the Buy Box, having been provided that advantageous position by Amazon as a reward for a combination of attributes that benefit the customer and Amazon. Such attributes typically include:
- superior customer service
- great customer reviews and feedback
- a track record for adherence to Amazon's many seller policies
- the profits made by that seller for Amazon
Usually, other sellers of that product are indicated somewhat less conspicuously by Amazon under the Buy Box, as a list or via a link.
Why the Amazon Buy Box Matters
Amazon has experienced epic growth since it began almost 25 years ago, well into the hundreds of billions of dollars.
In recent years, most sales on Amazon (estimated at approximately 80%) go through the Buy Box with sales split evenly between products offered by 3rd party sellers and products offered by Amazon itself.
Online retail experts predict that 3rd party sales will continue to grow, driving the further success of Amazon.
As the brass ring for sellers, the Buy Box is a worthy goal that produces exponential sales volumes, while the process of pursuing the Buy Box produces good seller performance and model seller citizenry for Amazon and its customers.
As most of us have experienced, someone will always try to “game” a system. Rumors and blogs about tricks and shortcuts to the Amazon Buy Box are frequently self-serving, typically offering a few false positives as proof prior to launching into a sales pitch. Most prevalent among these:
Generally these theories purport that there is a magic pricing formula or system that lowers the price of your item in such a way that will win you the Buy Box. What is true is that lowering your price is tricky territory that walks a line between competitive success and disaster; it increases your chances of winning the Buy Box, while also increasing the likelihood that your actions will trigger a race to the bottom as concerns profitability.
This misguided theory posits that if you can price your item within a certain percentage of the current Buy Box winner’s price for the item, you can win the Buy Box.
While the Buy Box is fluid, and selected sellers are rotated in or out (more on that to follow), there is no way for a seller to manipulate their way into the Buy Box by coming within a certain percentage of the current Buy Box winners posted price.
How It Works
The concept for the Buy Box is to create a system based on layers of automation that evaluate seller competition to benefit the customer. It is largely an algorithm designed to optimize value for the customer by striking the balance between seller pricing and seller performance. Amazon often competes as well for the Buy Box.
The algorithm’s criteria for selecting the winner are many and varied and involve programmed evaluations based on lots of requirements and comparisons. In cases where the evaluation results in a tie between two or more best qualified sellers, or several that are within a range of preferred values, each may (although not always) be awarded the Buy Box for a percentage of each day with the better ones having a greater percentage of the day than the others. This is referred to as the Buy Box share. As well, Buy Box sellers will not necessarily be displayed to all buyers at the same time (cookies see to that).
On occasion, no seller will win the Amazon Buy Box if none of them meet performance standards or if they offer pricing that exceeds the standard list price by too much. In such cases, customers are offered a listing of merchants selling the product, based on landing price (price + shipping).
Sellers should keep in mind that the evaluations and decisions about who wins the Buy Box are Amazon’s to make when and how they deem appropriate. While based on an algorithm, the process is not 100% robotic and the outcomes are not always predictable.
Lining Up Your Ducks
Four basic criteria must first be met before a seller can be deemed potentially worthy of competing to win the Buy Box for their product:
- Seller must have a professional seller account – sellers with individual seller accounts cannot compete for the Buy Box.
- Sellers must have attained the status of “Buy Box Eligible” by Amazon. This is essentially recognition by Amazon that the seller has sold successfully via Amazon for a while.
- A distinction must be made between new and used products. The Buy Box is for new items. Used items have their own version of the Buy Box, called a “Buy Used Box” which operates separately from the Buy Box but uses similar criteria in seller evaluation.
- The item must be available – if it is not in stock, the seller cannot have the Buy Box. An exception sometimes applies if a product is listed as backordered, but generally the process works more smoothly for a seller who practices good inventory management.
To check your Buy Box eligibility:
- Click on the Inventory tab in Amazon Seller Central and select Manage Inventory
- Click on the Preferences tab
- In the Column Display section, locate the field for Buy Box Eligible
- Select Show When Available from the drop-down
- Look at the Buy Box Eligible column for a particular SKU. If the seller is eligible, it will say "yes."
You may not be eligible to win the Buy Box for all your products. If you believe should be awarded Buy Box Eligible status, you should contact Amazon seller support directly.
The "Next Best" Things to the Buy Box
If you are not the winner of the Buy Box, you still have the opportunity to benefit from a couple of “next best” outcomes:
Other Sellers on Amazon – this is a section of the product detail page which appears underneath the Buy Box and can contain up to three additional sellers of the product. While not as beneficial as the Buy Box, “Other Sellers on Amazon” still provides an edge over non Buy Box competitors.
Offer Listing Page – a list that displays offerings from other sellers, ordered by landed price. This page also shows information unique to each seller such as feedback ratings, shipping rates and other information.
Mobile Shoppers Love the Buy Box
Because of the way the mobile website and the app are laid out, mobile users accessing Amazon via either route are more likely to buy from the Buy Box than from shoppers accessing Amazon from their PC’s. That is especially significant given that, according to sources, almost 70% of 2017 holiday shoppers shopped Amazon using mobile devices.
Mobile users find their Amazon experience very user friendly and simplified because Amazon provides few other choices to mobile customers besides the Buy Box. The mobile site provides a somewhat obscure link to all other sellers while the app doesn’t mention it at all.
What Matters to the Amazon Buy Box
Many different variables, which can oftentimes be weighted differently, influence who gets the Buy Box. All those variables relate to customer value and can differ depending on the product and category. In every case, however, the variables are evaluated relative to other sellers.
Fulfillment is the single most substantial variable in determining who gets the Buy Box. Factors related to fulfillment include shipping time, on-time delivery rate, inventory depth and others.
FULFILLMENT PROCESS: FULFILLMENT BY AMAZON (FBA)
Amazon, true to its philosophy of providing a consistently superior customer experience, has developed an excellent record for fulfillment. Of course, Amazon trusts its own fulfillment service the most and offers its sellers the fee-based option of fulfilling their orders for them.
Sellers who choose to have customer orders fulfilled via FBA therefore have a lesser chance of experiencing order processing hiccups and, therefore, a higher chance of winning the Buy Box. Using FBA is favorably and substantially weighted in the overall mix of elements considered by Amazon in awarding the Buy Box.
Note: due to the fees charged to sellers by Amazon for FBA, sellers should decide carefully whether to “go FBA” for their order fulfillment.
Amazon holds the seller accountable to the time estimate provided by the seller to the customer. Amazon measures seller performance of this variable by comparing actual shipping time to the seller’s promised shipping time, and weights this variable even more heavily for merchandise and product categories that are associated with time-critical buyer imperatives. Any negative difference between the actual and promised shipping time is another strong determinant in the mix of variables considered by Amazon in awarding the Buy Box.
Shipping times are typically indicated to the buyer as being between 0-2 days, 3-7 days, 8-13 days and 14+ days. Jumps between these segments also impact the seller’s odds of winning the Buy Box.
ORDER DEFECT RATE (ODR)
The Order Defect Rate is a moderate-level determinant in the mix of variables considered by Amazon in awarding the Buy Box. Amazon combines three different metrics to arrive at the percentage of orders sent that were defective:
- The Negative Feedback Rate
- The A-to-Z Guarantee Claim Rate
- The Service Chargeback Rate
If the percentage is greater than 1%, the seller should take action to reduce it or chances of being awarded the Buy Box will be reduced.
Note: Amazon has data categories that house both “short term” and “long term” product defect data relative to when the order was placed. Amazon tends to de-emphasize the shorter term data as customers do not always immediately express dissatisfaction concerning defects.
VALID TRACKING RATE
This moderate-level Buy Box determinant is intended to encourage sellers to value the ability to track their shipments. Amazon defines it as the percentage of packages shipped with a valid tracking number divided by the total number of packages that have been shipped and confirmed.
- Failing to provide valid tracking numbers could indirectly affect Buy Box share because it may result in loss of selling privileges within the product's category
- VTR calculations are displayed reflecting the last 7 days and last 30 days
INVENTORY DEPTH AND SALES VOLUME
A lesser, but still important qualifier for the Buy Box, Inventory Depth and Sales Volume metrics are a way for Amazon to encourage high volume sellers to maintain proper inventory levels. Winning the Buy Box can boost sales significantly and Amazon wants to be sure these sellers can meet the demand.
Amazon does this by measuring how much time in the last 30 and 90 days the seller has been out of stock on the item.The metric works well also for lesser volume sellers who never go out of stock.
NOTE: This metric is not displayed to the seller anywhere on Amazon.
This last of the moderate-level Buy Box determinants measures how many buyers have given the seller feedback. Amazon uses it to compare sellers having a lot of history and /or lots of feedback against sellers who have been selling for a shorter amount of time and/or have less feedback.
Sellers with higher scores have a better chance of winning the Buy Box.
CANCELLATION AND REFUND RATE
Another lesser, but still important qualifier for the Buy Box, the Cancellation and Refund Rate tracks the number of orders canceled by the seller before they are fulfilled, and the number of orders refunded to the customer after they were fulfilled.
While a positive score will not mean much in terms of boosting chances for the Buy Box, a negative score for pre-fulfillment order cancellations, exceeding 2.5%, can decrease a sellers odds of winning it.
CUSTOMER RESPONSE TIME
This moderate-level Buy Box determinant measures how quickly a seller responds to customer queries and statements. Results are posted as averages in segments of 12 hours, 24 hours, greater than 24 hours and “never replied.”
The algorithm measures replies to customer messages so, for each post, it is important to “have the last word.” Sellers should make it a positive one.
If more than 10% of messages were replied to after 24 hours, or not replied to at all, the odds diminish for winning the Buy Box.
What Soon Might Matter to the Buy Box
Amazon is trendspotting to forewarn sellers of performance shifts that may impact their ability to win or maintain the Buy Box. Two areas of particular concern to Amazon are the experience of customers seeking to return merchandise and the level of overall customer satisfaction.
RETURN DISSATISFACTION RATE
The Return Dissatisfaction Rate is the percentage of valid return requests that were not responded to within 48 hours, were errantly declined, or resulted in negative customer feedback. It is calculated in segments of the last 7 days, 30 days, and 60 days. Amazon tracks this by soliciting feedback from customers who returned items. If those customers indicate that their issue wasn’t resolved satisfactorily, the feedback is tallied as a negative.
The Return Dissatisfaction Rate is comprised of three separate rate calculations:
- Negative Return Feedback Rate: the percentage of negative feedback that a seller received following a return request
- Late Response Rate: the percentage of return requests from buyers that have not received responses within 48 hours
- Invalid Rejection Rate: the percentage of policy adhering return requests that are wrongly declined. If a return is done per policy, the buyer should receive the full refund, or a request authorization, or some resolution of the issue which results in the return being no longer desired.
CUSTOMER SERVICE DISSATISFACTION RATE
This measures the customers’ level of satisfaction with the seller’s responses to their messages.
Amazon tags a brief “yes or no” survey to the bottom of every seller response to a customer contact, asking if the response satisfactorily resolved the issue. The statistic is a percentage based on the number of survey responses wherein the customer selected the “no” option.
If the seller satisfactorily addresses the problem so that the buyer later changes their vote to “yes,” the previous “no” vote is disregarded.
ALL ABOUT WINNING THE BUY BOX
Strategies for Performing Better as a Seller
With the above overview of the Buy Box in mind, along with each of the variables Amazon uses to award it, we’ll now cover some strategies on how to win it.
At face value, it seems a strategy pursuing steadily improving performance in all variables would be key to eventually capturing a share of the Buy Box.
Real world business pressures, however, require sellers to simply do the best they can, applying the fewest resources required to boost performance of the most impacting determinants.
CHECK IN WITH YOUR METRICS
Amazon eliminates most of the mystery from the process of pursuing the Buy Box.
They provide sellers a performance dashboard where they can gauge their performance relative to Buy Box metrics. It can be accessed through Amazon Seller Central. The information is displayed as a panel that indicates seller performance on each of the relevant variables.
CONCENTRATE ON THE MOST IMPACTING VARIABLES
If you have the time and resources to devote to excelling in all of the Buy box variables, you are far ahead of the game.
If you are like the vast majority of sellers, however, you need to manage your time. Therefore, you should devote your limited time to focusing on the most impacting variables first. In this way, you improve the most significant Buy Box determinants upfront, and then focus on the lesser impacting variables with any leftover time and resources you can spare for the cause.
Do a quick check of your performance (indicated in your "Performance Checklist" in Seller Central) against these goal markers:
- On-Time Delivery: Below 97%
- Cancellation Rate: Above 2.5
- Valid Tracking Rate: Below 95%
- Shipping Time: More than 14 days
- Late Shipment Rate: Above 4%
- Customer Response Time: More than 10% of messages over 24 hours
LIVE BY THE BRACKETS
Remember, for some Buy Box variables, Amazon provides you target brackets that indicate a metric in the form of a range between one factor and another, example: [12-17]. These brackets, in many cases, are the proverbial low hanging fruit. If you are close to achieving the next better level bracket, concentrate some effort in achieving that next bracket for a solid boost to your Buy Box share.
PLAY THE TIMING GAME
Many variables are measured over several time periods, such as over the past 90 days, and over the past 30 days. There are times, with such variables, when it may be advantageous to “wait it out.”
For example, if you have a lot of negative performance baggage in the first 30 of those 90 says, but you have a good performance record going in the most recent 30 days, you’re better off waiting for another 30 days of good performance to pass than to spend a lot of effort trying to correct the overall 90-day record.
THE THEORY OF COMPETITIVE RELATIVITY
Remember, you’re competing against sellers of the same item. If their performance stats never change, target a few strategic areas for improvement of your own performance. This can be a huge opportunity for you to increase Buy Box share.
TREAT NEGATIVE FEEDBACK WITH POSITIVE ENGAGEMENT
Don’t let the Feedback Score and Feedback Count variables put you in defense mode. Proactively provide excellent customer service as a matter of course to limit negative feedback. It is key to success on Amazon.
But if you should suddenly find yourself behind the negative feedback 8-ball, engage your dissatisfied customers immediately; don’t let it fester. If a pattern of negative feedback is emerging suddenly from several different customers, it may be indicative of a misleading claim or image in your listing, Take immediate action, both to correct the listing and to engage those dissatisfied customers in a resolution that earns you the right to ask them to remove the negative feedback or, even better, to post positive feedback instead.
Options that may earn you the right to ask for negative feedback removal include, but are not limited to courteous, customer-centric approaches to:
- Providing a refund
- Replacing the item at your cost
- Providing some form of credit such as a gift certificate
Once you begin an earnest dialogue attempting to correct a customer problem, you may find your rapport with your customer becoming easier and more comfortable. Ask for the removal of the negative feedback. If your response has been especially appreciated, you even may feel it appropriate to ask for a positive review in its place.
There are several ways to do this. A few of them include:
- Attach a quick and fun feed request note to the packing slip
- Reach out to the dissatisfied customer via the Contact Buyer link in the Manage Orders section of Seller Central
- Feedback tools are available in the marketplace that automate the sending of reminders to your customers after their purchases
Negative feedback will take you out of competition for the Buy Box faster than any other variable. If you question the ROI of spending resources to avoid or rectify negative feedback, you may not truly understand the value of winning the Buy Box.
Pricing Targets and the Buy Box
All other things being equal, the quickest way to win the Buy Box is usually to have the lower price. In most cases, however, that is not a sustainable business strategy. Competitive businesses have always struggled to find the right price point: the price that balances profit with sales volume, known as the pricing “sweet spot”.
The pursuit of the Buy Box has a sweet spot too and, in a few cases, it may paradoxically mean less Buy Box share in exchange for higher profits. While Amazon proffers standardized variables and performance metrics to govern the competitive Buy Box arena, some sellers may find a different formula that results in better outcomes for them.
Options for repricing strategies generally include:
- Manual adjustment of prices; it can be a tedious undertaking
- Rule-based repricing based on a unique selling situation; it consists of lots of variable requiring a constant vigil
- Algorithmic repricing; available as a third-party software from a variety of providers
We Can Teach You How to Win the Amazon Buy Box
Our team is ready to help teach you and your staff how to win the Amazon Buy Box. Whether its creating a seller strategy, consulting, or training, we can help take your Amazon business to the next level. Contact our team to get started today!