The Buy Box: What You Need to Know
by Colleen Quattlebaum, on November 29, 2017
Nearly everyone has been burned by the Buy Box at some point. Whether it was a new seller that stole it by drastically dropping prices, an epic price war over chocolate bunnies, or that time Amazon.com, Inc. ("Amazon") came and gobbled up all of your ASINs, everyone has a great, if not tragic, story.
When it comes to the Buy Box, we know a lot about what goes into assigning it. However, we don't know everything – and that's the way Amazon likes it. So, until Amazon decides to do a big reveal, let's review what we know.
1. Amazon has stated, "For many sellers, Buy Box placement can lead to increased sales." Check.
Put another way, the Buy Box is really, really important for sellers on the Amazon marketplace. In fact, eCommerce expert Skip McGrath says, "In most non-media categories the Buy Box is responsible for over 75% of all sales (and about 50% in the media categories), so it's pretty important that you earn your position in the buy box." Some industry studies have even shown the Buy Box accounting for 90% of all sales.
Although there are exceptions to every rule, one thing is clear to anyone who has sold on the Amazon marketplace for very long. That is, if you're shoved out of the Buy Box, sales decrease.
2. Ideally, you should be a Professional seller to get the Buy Box, and you need to have a low order defect rate. How low? We don't know exactly, but obviously the lower, the better.
3. When available, there is a winning "new" Buy Box offer and a winning "used" offer.
4. Amazon has also confirmed some of the elements that go into calculating who wins the Buy Box.
- Price (including product price and shipping cost)
- Availability (in-stock status and shipping speed)
- Customer Feedback
- A-to-z Guarantee Claims
Really Good Assumptions
With all of these facts, we can start making some really good educated guesses based on the collective experience of all sellers.
One of the most important, unstated facts about the Buy Box is that it is shared. One seller does not always dominate the Buy Box, but it may be rotated among several different sellers. This rotation usually occurs when all sellers have similar metrics and are offering a similar price. The Buy Box may change at any point during the day and for an unknown length of time. Some experts have even commented that ownership can vary for different sessions that are active during the same time period. In other words, two buyers visiting the same page at the same time may see different sellers in the Buy Box.
Price plays the biggest role in determining the Buy Box, but it doesn't hold exclusive rights.
FBA sellers are preferred over merchant-fulfilled sellers. Skip McGrath estimates that when all things are equal, FBA sellers will get the Buy Box 80% of the time as compared to merchant-fulfilled sellers.
Feedback matters. Quality feedback shows that a merchant is maintaining the high standards set forth by Amazon. Both the quantity of feedback and the overall feedback score are considered.
All bets are off when Amazon is a seller. It's very, very difficult to wrestle away the Buy Box from Amazon if they are selling the same ASIN. Well-qualified sellers may be able to capture it for a time if they drop their price low enough, but it is a tough game.
The Jury is Still Out...
You're probably wondering how much higher than the lowest price you can be in order to still win the Buy Box. We know there is some percentage, but no one knows for sure. Skip says it's about 0.5%, but others say it is larger or smaller, and Amazon may have different rules for different ASINs.
Amazon hasn't revealed the algorithm that assigns the amount of time to the Buy Box when there are multiple sellers.
The More You Know
It turns out that we actually know quite a lot about the Buy Box. However, there are a few key details that we have to make assumptions about. In our next post on the subject, we'll take a look at the many different ways that sellers use this information to make their own Buy Box strategy! An automated repricing tool, such as SmartPrice, can be an important part of this process.
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