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:
- 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
- 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.
What is Amazon’s Search Algorithm (“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 catalogue 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 “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.
Get a Free Quote Today!
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 factors (in alphabetical order):
- Account Health – if you sell on Amazon and care about your account, you are familiar with this section of Amazon’s “Seller Center.” A dashboard of all the vitals, the data contained therein is essential to your efforts at success on Amazon. Keep things “in the green” and you should pass the algorithmic muster.
- Brand – if you control the brand via Amazon’s Brand Registry, it is to your benefit to include it in the product’s listing title.
- Click-Thru Rate (CTR) – Amazon collects data on where your potential customer clicks after they enter the search term(s) that pulled up your listing. So make your listing compelling. They are watching the ratio of time their customers spend on your listing versus your bounce rate.
- Conversion Rate – the Amazon customer may have clicked on your product link, but did they purchase it? Another ratio. Again, make your listing compelling.
- Customer Feedback, Reviews and Questions – are customers engaging with you positively? Create a customer-first experience for people browsing your listings. Strive for favorable reviews and feedback. Show how your customer “community” is engaged in how they not only post questions but answer them for each other. Step in and answer a few yourself, as needed. And ALWAYS mitigate and minimize the impact of negative reviews and feedback. Make it right, despite the costs. It means a lot on Amazon.
- Inventory – 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.
- Order Processing – we at Awesome Dynamic® have always recommended FBA for order fulfillment. It usually represents a cost savings, and assures the smoothest experience. And it’s extremely likely fulfillment speed and order processing latencies are tracked by algorithms.
- Photography - this is one case where 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.
- Price – this one is tricky. 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. Again, try to strike the 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 Listings - great titles, feature-rich bullet points and engaging descriptions rise to the top. An understanding of the differences between Amazon’s A9 and Google’s PageRank search rules can’t hurt (definitely the topic of a future blog!).
- Profitability of Products - these are the highest revenue generating products in a category, sub-category, etc. The algorithm may cycle periodically (every 24 hours, perhaps) to chart the data for trendspotting.
- Title - long titles stuffed with keywords are not “relatable” and are often a turnoff for many consumers. If you’ve covered the keywords elsewhere in your listing, there is no additional benefit to duplicating them in the title. Keep titles descriptive, concise and precise.
- Variations - usually it is best to cover them in one listing since all variations can be promoted by a central repository of fabulous customer reviews.
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.
Get a Free Quote Today!
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.
- Myth-Busting the Amazon Algorithm – Reviews and Ranking For Authors
- Three Amazon Seller Questions That A.I. Can Answer