The Amazon search algorithm, Amazon A9, is complicated. All sellers on the Amazon marketplace know that Amazon is a competitive and dynamic sales environment. But why do some sellers do better than others? The most successful Amazon sellers:
- Choose their selling platform wisely
- Position themselves to be able to analyze and respond quickly
- Know that it pays, literally, to be observant, agile, and responsive
- Know that control equals improved margins
- Understand the Amazon search algorithm enough to maximize their sales positions
Let's dive a little deeper into that last bullet point
The savviest of sellers understand two things about algorithms in particular, in relation to Amazon:
1. The Amazon search algorithm, called “A9“ after the firm that created it, is the engine that drives Amazon. It places in front of customers:
Amazon’s best-selling products, with the best margins, by the most customer-centric sellers.
2. There may be some benefit for sellers to establish some algorithms of their own to dominate their market space on Amazon
Let’s take these in order, starting with Amazon’s search algorithm, Amazon A9, or as some are referring to A10 after the 2018 changes.
What is Amazon’s Search Algorithm, Amazon A9?
Just as you don’t need to be a mechanic to drive a car, you don’t need to be a programmer to benefit from the Amazon search algorithm. Its purpose is to match the customer to Amazon’s best catalog options. Amazon believes that, if your listing works for the Amazon search algorithm, it will work for their customer.
In brief, the Amazon search algorithm (AKA “Amazon A9”):
- is an iterative search formula that scans, reads and analyzes data on the Amazon marketplace and takes actions based on that; essentially the Amazon search algorithm is almost a form of artificial intelligence (AI)
- identifies relevance factors based on the shopper’s past traffic activity and tells Amazon’s website how to tailor (pull, score and order) search results based on the interests of that customer
- (worth repeating) is used by Amazon to assure that the best-selling products with the best margins by the most customer-centric sellers are placed in front of searching consumers
- while not an all-out secret (many search algorithms work this way), is generally held close to the vest by Amazon and is constantly tweaked in ways that benefit Amazon and its strategic sellers and operational partners
- is key to Amazon’s business model
It takes into account many factors.
What Does the Amazon Search Algorithm Assess?
Here is where things become a little cloudy and why it is in Amazon’s best interest to not reveal the complete recipe (hence the NDA’s). But chances are good that the Amazon search algorithm is monitoring and making determinations that are important to your sales success, based on these four direct factors:
- Sales Velocity – Sales velocity is a measure of conversion and is hands down the most important factor Amazon A9 takes into account when determining your ranking. It’s defined by Amazon as the number and dollar amount of a seller's transactions during any given month. When assessing sales velocity, Amazon compares a seller’s velocity to that of its competitors for the same search terms. The seller with the higher sales velocity will almost always win out.
- Text Match Relevancy – This is an assessment of how well the content in your listing (i.e. title, features and product description) matches the keywords searched by consumers. The greater your text match relevancy, the better your ranking. This factor is the reason optimizing your listings is so crucial to your Amazon success. Great titles, feature-rich bullet points and engaging descriptions rise to the top.
- Price – “A9” is optimized to display not only the most relevant and best-selling products but also those at the best price. This one is tricky because the Amazon search algorithm looks for the best price for their customers, but it also seeks the listings representing the best margins for Amazon’s share. In the end, try to strike a balance without getting caught up in the “race to the bottom.” Sell value in your listings. Your primary competitors are the sellers who do this well.
- Product Availability – The key to this factor: don’t run out of stock. If FBA, keep Amazon stocked with your merchandise. Amazon does not like to lose out on sales. If you “stock out”, you disappoint the customer, and you disappoint Amazon. Appease the Amazon search algorithm. Monitor inventory regularly and try to continually strike the balance of having just enough on hand at Amazon at all times.
While these are the primary and most important factors the Amazon A9 algorithm uses to assess your listings. There are several indirect factors that play a key role, as well.
- Advertising – As we’ve already discussed, sales velocity is the most important factor monitored by Amazon’s search algorithm. But how do you increase your sales velocity? The answer: advertising. This is far and away the most powerful tool you can use to increase your sales velocity. Even just a few dollars allocated toward advertising can go a long way toward driving traffic to your listings and increasing your sales.
- Fulfillment Method – Fulfillment by Amazon (FBA) is a valuable resource to sellers. By having your items stocked in an Amazon warehouse you can achieve featured merchant status, increase your reach to Amazon Prime Members and better your chances of achieving a spot in the sought after Buy Box. All of these benefits can go a long way toward increasing conversions and boosting your sales velocity.
- Images – In a marketplace where shoppers cannot physically interact with your product, image really IS everything. Clear, bright, high-resolution images of your products accommodate Amazon’s “hover to zoom” feature and help your conversion rate. Include as many as allowable to show all angles, scale and use. This appeases the Amazon search algorithm and will boost rankings.
- Premium Content – Utilizing A+ Content (for Vendor Central) and Enhanced Brand Content (for Seller Central) can result in more than a 5% increase in sales thanks to increased traffic and conversion, according to Amazon. This premium content provides consumers with a better understanding of the product, often resulting in a lower number of returns and greater customer satisfaction.
- Promotions – Promotions can be a great way to increase conversions and boost your sales velocity. A word of caution though. Discounting your product can provide a quick bump in sales, but it is not a long-term strategy for improving your rankings. There are many other more important, more sustainable “A9” factors to focus on – such as your text match relevancy and product availability.
- Reviews – This helps Amazon determine whether or not customers are engaging with you positively. To really excel in this territory, create a customer-first experience for people browsing your listings. Strive for favorable reviews and ALWAYS mitigate and minimize the impact of negative feedback. Make it right, despite the costs. It means a lot on Amazon and your customers.
Certainly, this is a lot to contemplate, and the above list may represent only a few of the algorithmic factors determining your listing’s ranking. But keep in mind that, while impressive, the Amazon search algorithm can never be all-knowing. Retail shopping is a human activity and a well crafted listing can be effective in ways not measurable by algorithms.
Still, if you think of these above-listed factors as the basic laws for being a solid Amazon seller citizen, you should be on your way to successful selling on Amazon. Depending on your particular situation, some of these items may be more applicable than others. It is certainly a worthy exercise to determine which ones you should focus on and we advise discussing all of them with a qualified, expert consultant.
Lastly, You Can Create Some Algorithms of Your Own
As a seller, you can put in place some algorithmic tools of your own to analyze your market’s dynamics and make real time adjustments to changing market conditions. Let yourself be inspired by what’s gone before. Remember, your goal is timely responsiveness, both to your individual customer and to your broader marketplace.
Up to now, the larger retailers on Amazon have used algorithms to help them monitor their sales and make adjustments but, increasingly, some entrepreneurs have begun discovering the benefits of using algorithms to:
- Adjust pricing on the fly
- Estimate/predict how much inventory to order and stock
- Forecast which products to add and drop
As with any automated process, there are pros and cons. Systems for adjusting prices on the fly, for example, can be misused so they have their critics. Setting up your own algorithms (or finding a firm to do that for you), may prove quite beneficial, however, if done with care.
Savvy Amazon sellers know the mantra: “Appease the Amazon search algorithm.” Understand A9 to help you hit the Amazon marketplace bulls-eye, and to inspire you to create a few algorithms of your own to optimize your Amazon selling experience.
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