According to recent numbers, 90% of sales go to Buy Box holders! If you think of that number it is actually insane – that means that a minority of items are generating a majority of income and sales on Amazon, while the rest of us are scrambling for the crumbs ie the 10% of sales left over. Now I don’t know about you but I always like to be on the winning team, the successful company and when selling on Amazon, being displayed in the Buy Box is the equivalent of that. It is sad to say but merchants who do not appear in the Buy Box are almost non-existent to shoppers. And that is why you are reading this post because even if you have won the Buy Box in the past, you probably don’t understand the underlying determining metrics which Amazon relies on in order to choose Buy Box holders. Continue reading this post if :
- You want to win the Buy Box and be taught how to do it
- You want your products to be among those generating 90% of the income on Amazon
- You want to understand what the Buy Box is
- You want to learn how to become eligible for the Amazon Buy Box
- You are curious to understand the inner workings of the Amazon Buy Box Algorithm
- You are interested in learning what a good Buy Box percentage is on Amazon
Whether you are just starting out on Amazon or are a seasoned seller, most of you have already heard the term ‘Buy Box’ being thrown around but, what essentially is the Buy Box?
Every product on Amazon has one product page and through this page shoppers are connected with sellers. But eCommerce, many times is a placement game meaning whomever has their products most strategically placed will most likely catch the consumer’s eye and close the most deals. The Buy Box is placed in the top right-hand corner of the page above the other sellers which is the equivalent of being in the top Google search results. Have a look:
The Buy Box is High-Stakes
The Buy Box is a little bit like poker in a way because when you win you win big and when you lose, you lose hard. Winning the Buy Box means that everytime someone clicks on the ‘Add to Cart’ or ‘Buy Now’ buttons, that person will automatically be buying from the Buy Box winner. It is as if you have become Amazon’s exclusive supplier for a specific product for a limited amount of time and can lead to some serious cash flow.
But if you have a losing hand you will not only lose the jackpot but will also be penalized in a sense. Unfair yes but nonetheless a fact of life on Amazon. If you are using Amazon Marketing Services or just plain advertising on Amazon:
- Your Sponsored Product Ads for the product which you did not win the Buy Box for will stop running
- Your Headline Search Ads (which are not Buy Box dependent) will keep running and you will keep on paying for them, but guess who is going to profit from these ads? That’s right, not you! But rather whomever won the Buy Box instead of you.
So what are the metrics which most influence Buy Box eligibility? There is no easy answer as Amazon has a Buy Box algorithm (more on this soon) which for obvious reasons, its inner workings are kept a secret just like with Amazon’s A9 algorithm, which powers its search engine and search results. That said, here are the most important factors which influence Buy Box eligibility:
- You must be a Professional Seller paying for a subscription (check out my Amazon Seller fees post to understand the differences between a Professional Seller account and an Individual Account)
- You must have an Order Defect Rate (ODR) which is lower than 1%. This is a key metric on Amazon and is mainly affected by:
- Credit card chargebacks (including fraud and cancellations due to bad service)
- A-Z claims (more on this below)
- Negative feedback
- Your performance metrics including your Seller Ratings and Seller Feedback – you need to maintain a 97% or higher feedback score when competing for the Buy Box
- The quality of customer service will also affect the Buy Box. The better customer service you give, the higher your chances of winning the Buy Box. Amazon knows if you give good customer service based on customer reviews as well as the amount of A-Z claims customers have filed ‘against’ you, essentially having to ask Amazon to step in and settle an argument between you and a customer – these claims actually really harm your Buy Box eligibility!
- The length of time you are selling on Amazon. Amazon has the same approach to sellers as most people do towards wine. Older wines are considered to be better as they have had time to absorb the flavours of the tannins and oak barrels. So too, Amazon believes that the longer a seller is on Amazon the more experienced they have with customer service and the more reliable they are as far as far as the ability to supply inventory goes. There is no magic number but ‘age’ helps.
Pro tip: New sellers who are not using Fulfillment By Amazon (FBA) will have to wait longer for their products to appear in the Buy Box. The reason for this is that Amazon will only allow people to win the Buy Box who they are certain can fulfill the necessary order. If you are a new seller and have little patience, consider using FBA in order to get your products in the Buy Box ASAP.
The Buy Box algorithm, despite being an Amazon ‘secret’ works on a very basic principle, Amazon wants customers to have the best experience available and therefore has built the algorithm to provide the bestseller performance possible coupled with the most competitive prices.
Like most algorithms, this one is data-driven – it collects all relevant seller’s performance metrics and compares the merchants in order to determine who offers the best overall value and service to the customer. Interestingly enough, the weight of each metric and the determining process may vary in a way which may allow you to win the Buy Box with Product A in category A but lose it as far as product B in category B goes. A prime example of this is a product where timing and shipping is of the essence for example a medical related product whereas for a complex gadget maybe post-purchase assistance and guidance would be most important. Amazon’s algorithm ‘understands’ this and accounts for it.
It is for that reason that you yourself must analyze which metrics are most important to your shopper in a specific field and then try to give especially good customer service in that area. Put yourself in your customer’s shoes and try to imagine:
- Do I need this product quickly ?
- Will I need help putting it together ?
- Maybe this item is fragile and requires quality packaging ?
- Or maybe I am selling brand name items like Gucci or antiques in which case authenticity may be my costumer’s primary concern
Whatever your conclusions may be, you can be certain that excelling in that one area in addition to overall excellence as a seller is your golden ticket to the Buy Box.
We have finally reached the question of questions, the holy grail of Amazon selling as my colleague likes to call it 🙂
How does one win the Buy Box?
- Technically enable it – My mom always asked me how I could win the lottery if I never bought a ticket and you know what? She was right! The same goes for the Buy Box, how can you expect to win the Buy Box if you have not ‘technically enabled’ this option in Seller Central. So if you have not already done this then go on over to:
- Manage Inventory
- Buy Box Eligible
- And click ‘Yes’
- Top 2 – Once you have actually enabled the Buy Box always be aware of the top 2 ie Price and Fulfillment. These are the single two most important factors for Amazon Buy Box since, as I mentioned earlier they want to offer customers the best price possible but also be sure that you can fulfill all those orders. And even though I recommended FBA to newbies earlier, I would recommend everyone take a serious look at FBA as an option since from experience and from people I have spoken with on forums online, this is a big factor which can help you win the Buy Box.
Do keep in mind though that if a product is very popular or if competition is fierce and most vendors are top notch in terms of price and fulfillment then the battlefield shifts and other metrics become more important.
- Total Prices and shipping – Now I did already mention pricing but that was only referring to the product price. You need to be concerned with:
Make sure that not only your product price is competitive but also that your subtotal price is competitive. Do consider offering free shipping as this is a new industry standard with Amazon Prime. Also, choose your battles wisely, I would not recommend getting into a pricing war with Amazon as they will be able to outprice 3rd party shippers in 99.9% of cases. Attempt to win the Buy Box in categories where Amazon is not your biggest competition
- Seller Ratings – Again Amazon does not just want to provide customers with great prices but also great customer service and that is a big factor here. If you are using FBA you are pretty much off the hook since Amazon deals with shipping, handling as well as customer service. If however you are fulfilling and shipping independently then you want to look out for these metrics:
- Keep your Order Defect Rate under 1%. This means keeping A-Z claims to a minimum, having a low (under 5%) Negative Feedback Rate, and a low chargeback rate ie canceled credit card transactions for whatever reason
- Keep your Return dissatisfaction Rate under 10% which includes keeping Late Response rates as well as Negative Return Feedback to a minimum
- Keep your Buyer-Seller rate under 25% percent which requires you to answer inquiries in under 24 hours and keeping your Late Response rate under 10%
- Keep your Pre-Fulfillment Cancel Rate under 2.5% and Late Shipment Rate under 4%
- Keep your Valid Tracking Rate by category above 90% and your Items Delivered on Time above 97%
Those are a lot of rates but Amazon is super serious about customer service as well as customer satisfaction. I would definitely be paying attention if I were you.
- Stock levels – If you want the Buy Box, you have to ensure that you have high enough stock levels. If your competition has 100 items in stock and you only have 10, this will give him a serious advantage over you in the Buy Box ring. Be sure to constantly update your inventory levels in Amazon and even consider using multi-channel stocking services which can help you sync inventory across multiple channels. If you are using FBA, remember that Amazon will not register your inventory until it has actually reached a fulfillment center and has been processed so make sure to send out inventory as early as possible.
Buy Box Percentages
A Buy Box Percentage basically shows you how often your product appears when a customer views a product page. If you want to view this percentage on a per product basis, you can log in to Seller Central and go to:
- By ASIN (to learn more about ASINs and SKUs, checkout my post: The Ultimate Guide to Amazon Identifiers: SKU, ASIN, EAN)
- Detail page
- Sales and Traffic by Child Item
Furthermore, not everybody knows this but the Buy Box is actually shared in most cases with more than one seller especially if you are selling a popular item. That is why sellers often look for niches with little competition so that they can essentially “own” the Buy Box.
The Buy Box Rotation is a curious thing and changes every hour. If for example you have 5 sellers all with identical metrics and selling the same product, they will each win 20% of the Buy Box meaning the time that each seller’s product is displayed in the Buy Box will be ⅕ of the day or approximately 5 hours. Unfortunately you have no guarantee if you get prime times such as evening or off hours such as 3 am. In a not so equal world ie reality, one seller may win 80% of the Buy Box, another 15% and a third 5% – the time their products are displayed will again be divided up in accordance with the percentage of the Buy Box they have won.
There is no “ideal” Buy Box percentage. Anyone who wins the Buy Box has an increased chance to move merchandise which is fantastic. With that said, for small and medium-sized sellers, I would say 10-30% would be great especially in a highly competitive category and for much larger more established sellers, you want to aim for anywhere from 40-70%.
By this point you have a profound understanding of the Buy Box, how it works and how you can make it yours. Just remember that owning the Buy Box is more like renting stadium seats for an hour or two – it is always in flux! Not only is it constantly changing and in motion but a lot of what determines whether or not you win it is up to you. Of course there are always better, more talented players and teams out there but don’t focus on others rather on your own journey to success. Just remember that owning the Buy Box is the key to generating large sales numbers so let me leave you with one last piece of advice I got from my mother when I was younger: don’t play for the sake of playing, play to win!