Did you know that 82% of all Amazon sales happen through the Buy Box? Consequently, if you’re not in the Buy Box, your chances of making a sale are pretty slim.
What is the Amazon Buy Box?
There of two types of sellers on Amazon, Amazon itself, and third-party sellers.
For the majority of items, there will be a number of buying options for the buyer. When a buyer selects, ‘Add to cart’, the seller who has the Buy Box at that moment in time (the Buy Box winner rotates but more about that later), gets that all important sale.
Amazon’s net revenue sales have grown steadily over the last ten years reaching almost $136 billion in 2016 with over $111 billion worth of sales coming through the Buy Box—WOW! (Source: Statista).
So, with an estimated 82% of Amazon sales (more for mobile sales), going to the Box winner, it’s vital for sellers to know how the Buy Box works and what they can do to win a share of it.
How the Buy Box Works
The Buy Box algorithm starts by analysing each offer by all the sellers of the product. It then evaluates each offer on the basis of seller history, price and many other variables (more on those later).
After carrying out the analysis, Amazon rewards the Buy Box to what it deems as the best buying options for its customers.
Amazon no longer awards the Buy Box to one seller, but instead rotates the Buy Box between multiple sellers.
Buy Box Factors
Whilst, Amazon doesn’t disclose the specific performance metrics for the Buy Box, we can divulge a list of the most likely factors, which vary in importance, which Amazon considers before awarding sellers the much coveted Buy Box.
Excelling in all of these factors thus delivering an outstanding customer experience is the best way to win a share of the Buy Box.
Fulfilment method, very important
Fulfilment is probably the most important variable considered by Amazon.
Fulfilment can now be done in three ways, through FBA (Fulfilment by Amazon), FBM (Fulfilment by Merchant) or Seller-Fulfilled Prime (SFP).
Amazon gives FBA a perfect score for multiple variables including shipping method, on time delivery and inventory depth. This makes it highly unlikely for merchants to beat FBA sellers.
However, in 2015 Amazon introduced Seller-Fulfilled Prime which allows FBM sellers to reach Amazon Prime members without housing the goods in Amazon’s fulfilment centre. This is of particular interest to sellers of heavy goods as they can make savings on shipping.
Sellers enrolled in Seller-Fulfilled Prime will have a greater chance of winning the Buy Box than FBA sellers. Sellers who wish to enrol in the Seller-Fulfilled Prime program must have strong performance metrics and a proven record of meeting customer’s expectations.
Landed price, very important
There are two prices on Amazon, the price you list an item and the landed price which includes shipping and VAT (UK and EU only). It’s important to take these things into consideration when pricing your products.
A common misconception is that sellers who have the lowest price think they will win the Buy Box. Whilst having a lower price will increase your chances of winning a share of the Buy Box, it is only one of the criteria for it, albeit, an important one.
If your seller performance is higher than your competition for a product, you may be able to raise your price and still get your share of the Buy Box.
Shipping time, very important
The amount of time a seller takes to ship an item is known as the shipping time. This has a high impact on winning the Buy Box, particularly for products such as birthday cards and perishable items.
Shipping time is arranged into the following brackets, which only includes working days: 0-2 days, 3-7 days, 8-13 days, 14 or more days.
The shipping time can be seen on the product detail page where it states the date the item should arrive between.
Order defect rate, important
Order defect rate (ODR) comprises of three different metrics: negative feedback rating, A-Z guarantee claim rate and service chargeback rate.
Amazon calculates these three metrics to find out the number of orders which were defective. According to Amazon, the ODR should be below 1% and any sellers above this will be penalised.
Valid tracking rate, important
This is a new performance metric from Amazon, which is the percentage of total packages shipping with valid tracking.
Valid tracking rate is considered on the basis of the last seven and 30 days.
In order to protect your Buy Box eligibility, valid tracking numbers should be provided for 95% of packages shipped. Anything less than this could affect their chances of winning the Buy Box and even selling in a certain category.
Late shipment rate, important
Late shipment rate is the number of orders shipping later than the expected ship date. You can set your handling time in Seller Central, sellers who don’t will be given the default shipping time of 1-2 business days.
A late shipment rate below 4% will aid your chances of winning a share of the Buy Box. This metric can be viewed for the last seven and 30 days in Seller Central.
Delivered on time rate, important
The percentage of orders that buyers received by the estimated delivery date.
Sellers should aim for a percentage of 97% or greater. This metric can be viewed for the last seven and 30 days in Seller Central.
Feedback rating, important
Feedback rating is the culmination of all feedback score the seller has received over the last 30 days, 90 days and 365 days, with the most recent feedback having the greatest impact.
Feedback rating can be seen in Seller Central.
Customer response time, important
Again, Amazon checks responses for the last seven, 30 and 90 days and compares them for all competing sellers. It is considered, that replying to customers within 12 hours increases your chances of winning the Buy Box.
If more than 10% of messages were replied to after 24 hours or never replied to, this can have an adverse effect on the ratings. However, by marking as no response needed, the seller can save themselves from negative points.
Feedback count, important
Feedback count is the number of buyers who have given seller feedback. A higher feedback count can lead towards winning the Buy Box.
Inventory depth/sales volume, somewhat important
Amazon prefers sellers who have enough inventory to deal with the demand which the Buy Box can create. As a result, sellers with large inventory, consistent sales, and good stock history can be granted a higher Buy Box share.
If you’re frequently out of stock, your chances of winning the Buy Box are slim to none.
Cancellation and refund rate, somewhat important
The number of orders cancelled before being shipped by the seller and the number of orders refunded after being shipped make up the cancellation and refund rate.
A rate higher than 2.5 % could affect your chances of winning the Buy Box.
New metrics, no impact currently
Amazon recently introduced two new seller metrics aimed at improving the buying experience, the Return Dissatisfaction Rate and the Customer Service Dissatisfaction Rate.
Although Amazon is currently not considering these two new metrics as Buy Box factors, it’s worth keeping them in good health as they are likely to be factors in the near future.
Learn more about these new seller metrics.
Buy Box Strategies
In order to win a share of the Buy Box, sellers need to improve their metrics without forfeiting performance in other areas. It is not always easy to find a perfect balance between customer support, price and several other factors.
Here are three strategies that may help you increase your Amazon Buy Box ownership.
- Know your metrics: Sellers should be aware of their seller metrics in Amazon Seller Central.
- Focus on the important metrics: Some sellers might choose to focus on those metrics which have the most impact on the Buy Box.
- Improving seller performance: Use Amazon Seller Central to identify the key areas of performance you need to improve on.
Buy Box Requirements
There are four key criteria sellers must have to compete for the Buy Box:
- Professional Seller account: Only sellers with a Professional Amazon Sellers account are eligible to win the Buy Box. Individual or Basic Seller account are not eligible.
- Buy Box eligibility: A seller must be Buy Box Eligible (previously called Featured Merchant) for the product in order to compete for a share of the much coveted Buy Box for that product’s sales. Sellers can be eligible to win the Buy Box for some products and not for other products. Sellers can fast-track their way to Buy Box Eligibility by using Amazon FBA.
- Item condition: Items that are used cannot win a Buy Box position over a new item—instead, there is now a Used Buy Box which is separate to the main Buy Box.
- Stock availability: An obvious one but if you don’t have an item in stock, you can’t win the Buy Box with the exception of a back-ordered item.
Optimise Your Prices
One of the biggest myths surrounding Amazon’s Buy Box is that having the lowest price makes you a certainty for winning a Buy Box. By always having your prices at rock-bottom prices, you’ll reduce your profit and customers may perceive your product quality to be low.
However, optimising the price of your product will almost certainly increase your chances of winning the Buy Box. With price optimisation, your prices and subsequent profits will increase when a competitor runs out of stock.
Repricing software such as RepricerExpress can save you huge amounts of time and effort as well as helping you win the Buy Box. RepricerExpress works within your defined pricing rules, ensuring your prices are optimised within your min and max price settings.
It worked for this seller, who increased his Amazon Buy Box Percentage by 61% because he signed up for RepricerExpress.
As you can probably tell by now, the Amazon Buy Box is a complex and multi-faceted system. Amazon gives a lot of control to third-party sellers and you should always try to take full advantage of its incredible potential.
Delivering a first-class customer experience gives sellers the ability to raise their prices and still maintain a healthy Buy Box share.
Finding the optimal pricing point for every product is crucial and challenging. Get it almost right and you’ll probably win some sales; get it exactly perfect and you’ll watch your profits soar!