How to Get a Leg Up on Amazon Competitors
The Buy Box is a funny thing.
Simply offering the lowest price offers no assurance of winning it. In fact, you've probably witnessed countless examples of a higher-priced merchant (or Amazon itself) retaining the Buy Box, despite being priced substantially more expensive than you. It's definitely frustrating, and only Amazon knows the exact Buy Box algorithm.
Luckily, you're not operating totally in the dark. Although Amazon's Buy Box formula remains a mystery, one thing is abundantly clear: Amazon wants its shoppers to receive the best buying experience possible (even if it means awarding the Buy Box to a higher-priced seller).
In this post, we'll discuss a few simple steps to help you stay ahead of the competition on Amazon.com.
Commit More to FBA
Amazon.com, Inc. ("Amazon") is pretty proud of its FBA service - and for good reason. Unlike other marketplaces that rely entirely on merchants holding up their end of the deal, the FBA platform standardizes every aspect of online fulfillment. In addition to warehousing, picking and packing customer orders for you, Amazon also takes care of many customer service responsibilities (such as processing returns). The net result? A smoother experience for customers, faster delivery and a more scalable model for everyone.
Amazon is so confident in its FBA model that the Buy Box algorithm is influenced (rather heavily, some might argue) by a seller's participation in the program. This makes perfect sense, especially when you consider some of Amazon's "best practices" for improving your chances of winning the Buy Box:
- Keep things in stock
- Always ensure your inventory count is correct
- Offer multiple shipping options on the stuff you sell
- Offer free shipping
When compared to the MFN model, being an FBA seller makes it much easier to ensure these best practices are being followed. Therefore, committing a greater quantity of stock to FBA inventory is a fundamental tactic for outflanking some of your competitors - particularly those with aggressive pricing strategies.
As important as the FBA program can be to winning the Buy Box, it's certainly not a guarantee for eCommerce success. FBA sellers still need to develop a rock-solid restocking model. As Amazon points out, "If you have no current stock for a product, you cannot win the Buy Box. Use inventory planning best practices to keep your popular products in stock." This is especially important for merchants offering private-label items or those who maintain local inventory. Allow me to explain.
Let's say that you've developed a successful line of high-end pet products (leashes, grooming supplies, etc.). You've even bundled a few of your more popular items into kits. Obviously, competitors can't directly compete for a share of these items' Buy Boxes (you exclusively own these ASINs). That's the good news. The bad news is other sellers won't pick up the slack when you run out of stock - which means your sales velocity comes to a screeching halt. And, what's worse, a prolonged out-of-stock scenario can also negatively impact your Amazon SEO, as we've pointed out here.
Private-label sellers aren't the only ones impacted by out-of-stock situations. For example, if you maintain a local inventory, it's really easy to get things mixed up. Are you sure your Seller Central numbers match up with what's actually at your warehouse? Have you updated your local records to reflect the most recent inbound FBA shipment? Unless you're extremely detail-oriented, costly oversights will occur, increasing your chances of an out-of-stock order. This leads to orders you can't fulfill, unhappy customers and unnecessary friction with Amazon.
Create a Frictionless Restocking Model
Whether you sell private-label items, maintain local inventory or just need a better workflow, a tool like RestockPro can help you build a scalable restocking model. RestockPro supports a variety of restocking models, offering a more flexible approach to inventory management. Our software helps you to efficiently manage restocking lead times, suppliers and shipments, thereby reducing the likelihood of an out-of-stock situation.
Based on your business rules, RestockPro tells you exactly when and how much of an item to reorder. Our integrated platform even pulls real-time data from your Seller Central account, offering a 360-degree view of your Amazon supply chain.
Beat the Competition by Delivering a Better Experience
Beating the competition isn't always as simple as dropping your price. On the Amazon marketplace, sustained success requires patience and a commitment to continuous improvement. If you're interested in reducing out-of-stock situations and improving your restocking model, give our RestockPro tool a try.
Click here to try it risk-free for 21 days.
Originally published on December 5, 2017, updated May 30, 2019
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.