Win the Amazon Buy Box in 2020
11 Jul 2020
Is it interesting to learn how to win the Amazon Buy Box in 2020 and increase your sales? Amazon is the biggest eCommerce website in the world. It represents 44% of all U.S. eCommerce sales. If you want to sell a product online then Amazon should be at least one of your channels. But selling on Amazon is not as easy as putting a product on the website. Amazon is a complex marketplace with lots of competition. Amazon encourages this competition in order to provide users with the best prices and the highest quality of goods. One big way it encourages these ideas is through the Amazon Buy Box.
The Amazon Buy Box is the little box where purchases are made. Visually, it is deceivingly simple. However, this little box has big implications for sellers. Despite there only being one buy button, most product pages actually have many sellers. Amazon evaluates each seller through its rating system and uses this information to decide who it recommends as the best seller. This decision appears in the form of the Buy Box. When a user clicks add to cart Amazon gives the sale to the recommended seller. This is called “winning” the Buy Box.
How to win Amazon Buy Box?
The term “winning” may not be the most accurate when considering how the Buy Box actually works. The Buy Box is not always controlled by a single seller, but rather can be shared by top-sellers. Through Amazon’s rating system, sellers are given shares of the Buy Box. Then, the number of shares each user has determined the amount of time they control the Buy Box.
It is always possible to choose which seller to buy a product from, however, most sales are through the Buy Box. This is likely for a combination of reasons. Partially, users likely trust Amazon’s suggestions. But it is also because the button to buy from sellers outside the Buy Box is comparatively hidden. Meaning users might be unaware of even how to buy through other sellers. This secondary reason means that Amazon can lessen the importance of the Buy Box by simply making it easier to find other sellers.
But for now, competition for the Buy Box cannot be ignored. Somewhere between 80 and 90% of all Amazon sales are through the Buy Box. This number is even high for the rising number of mobile sales.
So what contributes to the number of Buy Box shares a seller is given? Amazon, for obvious reasons, keeps Buy Box metrics a secret. However, metrics (and their importance) can be determined through experience and inference. Here are some of the more important metrics:
Fulfilment for Amazon
There are three types of fulfilment: Fulfilment by Merchant (FBM), Fulfilment by Amazon (FBA) and Seller-Fulfilled Prime (SFP). FBM means that fulfilment is handled by the seller in-house. FBM sellers will almost always lose the Buy Box to a seller that uses FBA. When a seller employs Fulfilment by Amazon (FBA) they immediately get a perfect score for shipping method, on-time delivery and inventory depth. This boost in metrics is a quick way to boost your Buy Box shares.
In 2015 Amazon introduced SFP. SFP is FBM that has been certified by Amazon. You can be granted this status through an extremely high level of shipping standards. Because of this, SFP is allowed to reach Amazon Prime members. SFP and FBA are seemingly evenly matched in producing Buy Box shares.
Price for Buy Box
This metric has been proven through experience to effect Buy Box shares. But product price has less of an effect on the Buy Box than one might expect. Sure, low prices definitely boost your chances of winning the buy box, but It is common that many Buy Box winners have higher prices than their competitors.
Moreover, it was shown in a study by North Eastern University that algorithmic pricing has a larger effect on winning the Buy Box than low prices. Algorithmic prices are tools that will dynamically update your item prices in order to win the Amazon Buy Box. Repricing is based on your own metrics in addition to competitor pricing. These tools are more complex than just undercutting your competitors. North Eastern University also determined in the same study that products that control the Buy Box by using Algorithmic pricing are 60% of the time not even the least expensive product.
This rating is very important. Remember, the purpose of the Buy Box is for Amazon to provide customers with the best quality to price ratio. Therefore the rating on your product is especially important to the Buy Box algorithm. Luckily feedback rating is forgetful and most heavily weighs recent feedback. This rating takes into account scores from the last 30 days, the last 90 days and the last year.
One tip for improving your feedback rating is using a tool which allows you to reach out to customers who left bad reviews. In doing this you can fix their issues in hopes of receiving a better review.
Minimum Threshold Metrics
There are three metrics that have been shown to affect Buy Box eligibility if they are above a threshold. You will need to bear them to win the Amazon Buy Box. When above these thresholds, products cannot win the Amazon Buy Box at all.
Order Defect Rate
The first metric is the order defect rate. This is calculated in relation to negative feedback rating, A-Z guarantee claim rate and service chargeback rate. Products become ineligible for the Buy Box when order defect rate is above 1-2% of sales.
Valid Tracking Rate
This, as the name suggests, is the rate at which packages are shipped with valid tracking information. When 5% or more of orders have invalid tracking information then you lose Buy Box eligibility and fail to win the Amazon Buy Box.
Cancellation and refund rate
Cancellation and refund rate is limited by a threshold of 2.5-3%.
How to gain Buy Box eligibility?
There are four factors in determining whether you are eligible for the Buy Box.
The first is that you cannot have an Individual Seller (Basic) Amazon account. Instead, you must pay Amazon the monthly fee for a Professional Seller account (also called a Pro-Merchant account). This premium account currently costs 39.99/month (USD) + additional selling fees.
You must also be selling new items for Buy Box eligibility as it is easy to win the Amazon Buy Box for new products. Used items will never be shown in the Buy Box and can be found below it. Used items do often have their own Buy Box, called the Buy Used Box. This alternative Buy Box works the same way as the standard Buy Box but appears separately.
The third requirement for eligibility is that your product must be well-stocked. Without sufficient stock, the Buy Box will be lost and rotate to another seller.
This last requirement for eligibility is to be an Amazon verified seller called a Featured Merchant status (now confusingly called Buy Box Eligible). This is awarded to sellers who have been selling for 2 to 6 months with a high-performance rating. This eligibility can be checked within Amazon Seller Central. In order to acquire this eligibility quicker, a seller can use Amazon’s fulfilment services (FBA). Sellers can also contact Amazon’s support team to manually request the Buy Box Eligibility status.
There are two types of sellers on Amazon: resellers, and Amazon itself. When trying to win the Amazon Buy Box it’s nearly impossible to beat out Amazon, however, it is still possible to share the Buy Box.
When attempting to win the Amazon Buy Box, the features that will have the largest effects are pricing, fulfilment and customer ratings/service. Fulfilment should be handled either by Amazon or at an equally high level in-house. Price is most easily maintained by using one of the many algorithmic repricing tools on the internet. In order to maintain customer service, reach out to customers who are unhappy with your product and try and solve their issues. Finally, keep the fundamentals of your business well maintained. Ship high-quality products quickly and try to maintain low costs. Follow these tips and you will win the Buy Box.