Guest post by Anand founder of Hubbion
There are a number of factors that contribute to winning the Buy Box. Some of the most important criteria include your Order Defect Rate (ODR), delivery experience (speed of delivery, shipping options, etc.), Amazon seller experience, price and your performance metrics. The challenge here is that a lot of these factors favour the bigger and more experienced sellers. If you are just starting out as a seller on Amazon, it may be a lot of effort before you become eligible for the Buy Box.
Many sellers launch their stores with dropshipping. The reason this is so popular is because sellers do not have to worry about holding inventory, shipping and handling returns. All of this is managed by a supplier, so the seller can focus exclusively on marketing their store.
Pure play dropshipping can sometimes hurt your chances of winning the Buy Box. The product may take several weeks to be delivered if it is being shipped from an overseas warehouse. Also, you do not have complete control over pricing since dropshipped products may not be priced as competitively as wholesale products.
But it is possible to be successful as a dropshipper on Amazon. Let’s take a look at a few strategies that can help.
Reducing Order Defect Rate (ODR)
The ODR is measured by the percentage of orders that have negative feedback ratings, service chargebacks or fail the A-Z guarantee claim. Sellers with an ODR of more than 1% are penalised by Amazon.
Unfortunately, there is little that you, as a dropshipper, can do about high ODRs. The only way to bring this down is by picking a supplier who is reliable and is highly reputed. But in addition, you may also work on a few other things.
1. Sign an SLA
A Service Level Agreement legally mandates your supplier you adhere to specific product quality, delivery timeline and support metrics. While SLAs can be enforced globally, do note that you may not really have the time and resources to pursue a case against an errant supplier from another part of the globe. SLAs thus matter only if you and the supplier are in the same country.
2. Picking ‘growth stage’ suppliers
Large suppliers are reliable and reputed. But they also work with hundreds of clients and may not really have time for a startup entrepreneur. Small suppliers are not only untested, but they also produce stuff at lower scale and are thus economically unviable. The best dropshippers are those at the growth stage – such businesses have a established clientele that underline their trustworthiness. At the same time, they are in the growth stage and are thus able to provide customized support solutions for your business.
3. Amazon experience
Suppliers who already handle dropshipping orders from other Amazon sellers or have their own store on Amazon make a good choice. For one, it is possible to assess their reliability even before hiring them. More importantly, such companies understand the importance of ensuring low ODRs and earnestly work towards this. It is worth pointing out that this could bring down your competitive advantage since you source products from the same supplier that your competitors source from.
Improving Delivery Experience
Shipping delays are one of the most common complaints among sellers who use dropshipping. Time zone differences between the seller and the dropshipper could mean that it can take as much as a day to simply confirm the order. Add to this, the time it takes to ship your product from halfway across the globe, and you can see why it is not uncommon for such products to take several weeks to be delivered.
Holding your own inventory can solve these issues. However, that introduces a bunch of new variables that a startup seller may not be willing to handle. One way to fix the problem is by adopting a hybrid approach.
Essentially, you identify the most popular items in your inventory and stock them on FBA. This way, you continue to reap the advantages of dropshipping while bringing delivery times down. FBA, however, costs money and this could erode your margins further. You can work around this by negotiating a better pricing structure with your dropshipper for bulk shipments.
Improving Seller Experience
Amazon benchmarks your seller metrics against competitors to assess your performance. For instance, if you respond to customer queries a lot quicker than your competitors, then it makes it all the more likely for you to win the Buy Box. Similarly, if your seller feedback ratings are better than those of your competitors, then the chances of you winning the Buy Box are high.
Seek feedback: A number of studies have shown that it is more likely for customers to rate and share negative experiences compared to positive ones. In other words, unless you actively seek feedback from customers, they may fail to commend you on a positive experience. The Amazon guidelines specifically state that it is okay to seek reviews from buyers as long as you do so in a neutral manner without attempting to manipulate your ratings in any way.
Make use of this opportunity and ask for buyers to rate your service. A higher volume of ratings can make it more likely for you to win the Buy Box. It is, however, worth pointing out that buyers already receive as many as five emails from Amazon for every order placed. If you do not wish to spam your customers further, it is a good idea to ship a few “Rate us on Amazon” stickers to your dropshipper and request them to include these stickers as part of your order.
In conclusion, it is important to remember that regardless of how reputable your dropshipper is, the onus is on you, the seller, to establish trust and credibility with Amazon and your buyer. It is hence important to keep your dropshipper on a short leash so that they have very little scope to make mistakes and ruin the credibility of your Amazon seller account.