What increases the sales of an Amazon Seller?

In short it’s your performance, the better you do, the better you will do. The easiest way to explain this is to explain how the Amazon Buy Box works. The Amazon Buy Box is the promoted seller of an item that appears on the right hand side of Amazons search results. Often it can be the least expensive item, but not always.

How to win the Amazon Buy Box

The Buy Box on Amazon is one of the most fiercely fought over pieces of ecommerce real estate on the planet. Winning it, and winning it regularly will increase your sales, but what are the characteristics you’ll need to have to make winning it possible? If you understand them, you’ll also understand how to get found on Amazon. Amazon is a great sales channel, knowing how to win the Buy Box can make it even greater.

Amazon give fairly clear guidance on what they expect from Buy Box winners. Excellence in all areas! That may be a rather succinct summary but it’s not too far from what you will find.


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The importance of FBA

The most obvious requirement is that some categories require you to be using Fulfilled By Amazon in order to qualify for the Buy Box. To be Buy Box eligible in categories that include Music, Video and DVD categories, you need to be using FBA. Don’t expect to win the Buy Box in those categories if you don't use FBA.

If we consider why Amazon put that requirement on winning the Buy Box for DVDs, we get a valuable insight into how their thought processes work. DVDs are among those items that can be described as Fast Moving Consumer Goods, knowing that there is guaranteed available stock is clearly important to Amazon.  Why would they promote a seller if they felt that the order might go un-fulfilled?

Taking this further it would seem reasonable to assume that when you are competing for the Buy Box, stock availability is vital regardless of the category. And it would seem a sensible enough deduction that if that stock is held in FBA that your chances would increase of that win regardless of the category. Some research suggests that this is not the case, but we'd suggest it is an influencial factor.

Price versus quality

So what of price, surely that must be the most important aspect when winning the Buy Box? Surprisingly perhaps, Amazon is quite clear that the lowest price is not necessarily the winner. Again this gives us a clue as to the thought process behind their Buy Box strategy. It clearly emphasises that winning is based to a large extent on other quality measures. So what are these other measures and is there a way to order them in a manner that gives some guidance to a win hungry retailer?

The Amazon Buy Box influencers

Here is the order that we feel gives a fair impression of how Amazon decide on the winner.

  • Stock availability and fulfilment reliability
  • Price including the postage and packaging
  • Time to ship
  • Order Defect Rate
  • Seller Rating

As you can see we feel that price matters, and matters a lot, but we also know that the reliability and speed of service is vital when arriving at who should win the Buy Box. If the time to ship is not within a few days it’s likely that the stock isn’t held by the seller – why take the risk and promote that seller over someone else prepared to deliver within say 48 hours?

We also believe that an Order Defect Rate approaching the 1% level set by Amazon is likely to result in losing the Buy Box. The ODR covers negative feedback, A-to-Z claims and credit card chargebacks. Any of these reflect badly on Amazon, so again why would Amazon take a risk with a retailer that they see as potentially problematic?

Finally, and perhaps the catchall, if the rating of the seller is in the low 90’s then why take the risk that the order won’t be processed on time, or that the goods won’t be as described? With so many sellers on Amazon why take the risk?

The Amazon Buy Box is in essence a measure of your performance balanced against your price, so keep your metrics up and your prices competitive.

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Winning the Buy Box

If you are reading this then the chances are that you already know that owning the Amazon Buy Box significantly increases your chances of selling on Amazon.

Estimates vary on what percentage of sales, are actually driven by owning the Amazon Buy Box, but the common consensus is that anywhere from 80% to 90% is about right.

So what do you need to know about winning the Amazon Buy Box.

In short: How do you win the Buy Box?

Watch our 60 second video on how to win the Amazon Buy Box

 

Let’s get the two big issues out of the way first...
Amazon as a competitor and your Product Price!

Amazon as a competitor

If Amazon is selling the same item that you are, then the chances are they will dominate the Buy Box. This is likely to be the case, almost regardless of what you do.

Let’s face it, their online reputation and history at selling is likely to be better than yours. Sorry, but let’s not delude ourselves.

Of course it’s easy to jump to the conclusion that Amazon is stacking the deck of cards in their own favour when it comes to the Amazon Buy Box.

But, let’s be realistic:

they are one of the biggest retailers in the world, have a great online brand, a fantastic reputation, great customer service, can ship items within minutes of an order being received and so on.Amazons fulfilment ability is sometimes incredible.

All of that means that when the Buy Box Algorithm runs to decide who can get the Buy Box, the scoring is likely to favour Amazon.

That does not mean that all is lost if Amazon are competing against you. No-one has stock levels that last forever, so at some point you can win sales.

We’ve seen this happen often enough to know, that when it does happen, your sales of the item can suddenly rocket when the opportunity arises.

So don’t despair if you find that Amazon are winning the Buy Box, just wait for your chance. Amazon Sellers can win with diligence, great systems and a little patience.

Product Price

Winning the Buy Box is not all about price. You don't need to lower your price to win the Buy Box. Of course; price is important, let’s not pretend otherwise. However, ahead of price when it comes to winning the Amazon Buy Box is stock availability.

Amazon protect their online reputation carefully, aggressively even, so if they are not sure that you can fulfil the order then you won’t win the Amazon Buy Box.

If you are looking for evidence that stock levels are important to win the Buy Box then look no further than categories such as DVDs.

In categories such as DVDs if you want to win the Buy Box then Amazon make it clear that you must be using Fulfilled By Amazon (FBA).

With potentially fast moving goods, and highly competitive products, such as DVDs, Amazon has to be 100% sure that the order can be fulfilled and fulfilled fast.

Why should Amazon take the risk and allow a customer to place an order with a retailer who has run out of stock. Instead, if Amazon hold the stock on your behalf, at one of its Fulfilment Centres, then they are likely to favour that fulfilment strategy. And as explained above in some categories they insist on FBA for you to qualify for the Buy Box.

If you want to win the Buy Box make sure you have deep stock levels, if you don’t then winning is near to impossible. And of course if you don’t have stock then you simply will not qualify to compete for the Buy Box at all.

 

Now let’s look at the other areas that influence who wins the Amazon Buy Box.

First The Essentials:

(1) You need to be a Professional Seller.

(2) The items has to be new.

 

Now let’s looks at the other Buy Box winning determinants:

 

Fulfilment (again):

As explained earlier fulfilment is important, vital even. So if you are using Fulfilled By Amazon, or Seller Fulfilled Prime then it is likely that this will improve your chances of winning the Buy Box more often.

If your products are Merchant Fulfilled then winning the Buy Box is possible if you are selling in certain categories. But the Amazon Buy Box algorithm will look closely at your fulfilment metrics to decide if you are to be trusted with the order.Winning rhe Buy Box with a Fulfillment by Merchant strategy is possible, you just need to have a good system. But don't let us put you off: the FBM seller can do very well.

How good are you at getting items out the door? Do you meet, or exceed, your own Shipping Rules? Do the items arrive on time? Get that Shipping Time down.

All of these factors are taken into consideration when the Buy Box is awarded. If you are not on top of your fulfilment then your ownership of the Buy Box will be poor.

Ship fast and make sure it’s within what your product page claims.

Make sure your postage method or courier is capable of delivering the products on, or ahead of time.That way you can win the coveted Buy Box.

So make sure you always ship on time and that your items get there on time. Seller performance is everything.

Price:

The Price is important, and it’s the fully landed price you need to concern yourself with. The fully landed price is the cost of the item including the postage and packaging.

To compete effectively you’ll find you’ll need automated repricing. Pricing things manually will not produce the results you need. Competitive prices are important to improve your Amazon Sales, so don't rely on manual repricing.

You should bear in mind that there is a sub group of retailers who are competing for the Buy Box.

That means the Buy Box Price is not necessarily the same as the price on the non Buy Box listings.

That’s why Seller Dynamics gives you flexible pricing options. Do you want to compete only with Buy Box sellers? In many cases the winner of the Buy Box on Amazon is not offering the product at the lowest price.

Instead Amazon has selected the seller based on the range of qualities listed here, not solely on price. That means you need automated pricing for your Buy Box sales that is specific to the challenge of winning the Buy Box.

Inventory (again):

You must have good stock levels, and a good history of honouring orders. If you have a high pre shipping cancellation rate, then Amazon will take that as evidence that either your stock or inventory management is poor.

If they suspect that you don’t have the stock, or have bad stock management then they will not award you the Buy Box. You'll find winning the Buy Box is easier if you have good stock depth.

Order Defect Rate and Feedback

If your Order Defect Rate is approaching the 1% level then your success in winning the Buy Box will suffer. So work hard to keep your A to Z claims down, as well as any negative feedback.

The customer experience of you and your business is important. So think about the refund rate and your feedback rate. Improving all of these areas increases your chances of winning.

Winning the Buy Box

If you concentrate on the quality of the service you offer then winning the Amazon Buy Box will come along all by itself.

Fulfilment and stock availability are both key. But if you don’t have great looking metrics you can’t win. And when it comes to price, make sure you are pricing against the other Buy Box competitors, so that you can maximise the price you sell at.

You'll need great pricing on Amazon, so use an algorithmic repricer such as Seller Dynamics. Fantastic Customer Metrics, that are better than other third party sellers will make a big difference. You'll need high levels of on time delivery. And in many cases you may need to be using fulfillment by Amazon FBA, or self fulfilled Prime.

Amazon want a great customer experience, so the Buy Box is not all about price, so keep thinking customer service when you are trying to win Amazon Sales.