As everyone is quite aware, Amazon has become a monolith in ecommerce. In 2019, Amazon captured an estimated 47% of all online sales in the U.S. and recorded over $250 billion in total sales globally. Of those sales, over 90% are attributed as purchases through Amazon’s Buy Box.
Products sold on Amazon fit into two main categories. First-party vendor sales, where vendors sell their inventory to Amazon to be labelled “ship/sold by Amazon” and is sold directly to customers by Amazon, and third-party vendor sales where vendors enroll in Amazon’s Marketplace to list their available inventory for sale and sell directly to consumers. Third-party sales are typically labelled as either being “fulfilled by Amazon” (FBA), or “Ships from and sold by (retailer)”.
Most items listed for sale on Amazon have several different buying options for consumers to choose from. This often occurs when there are multiple third-party vendors listing the same product for sale. Amazon shoppers are presented with “Add to Cart” and “Buy Now” buttons on product listing pages, as well as additional buying options such as the “available from these sellers” links. These purchase options create a competitive marketplace where third-party sellers offering the same products compete with one another for ownership of the sales coming from customers who click the “Add to Cart” and “Buy Now” buttons. This competition around who presently “owns” the “Add to Cart” and “Buy Now” buttons is what is known as the Amazon Buy Box.
How does the Buy Box work?
Amazon uses an algorithm to rank sellers of the same product against each other and rewards the seller with the highest overall ranking with ownership of the Buy Box. The Buy Box is often constantly rotating. Amazon no longer rewards a single seller with the Buy Box on a particular product listing, but instead assigns each seller a percentage of the Buy Box web traffic based on the seller’s ranking. It is still possible to achieve 100% Buy Box ownership, for example, if you are the sole manufacturer & seller of a product, but it has become increasingly more difficult as more sellers enter the Amazon Marketplace. Some sellers have adopted a strategy of purchasing inventory wholesale through other outlets and reselling products on Amazon. This can create frustrations for manufacturers who sell their products on Amazon with the assumption that no one else is listing their products for sale.
A seller’s ranking depends on many factors including seller history, price, shipping time, and fulfillment method, amongst others. The below chart offers a comprehensive list of all the major factors in determining what seller wins the Buy Box.
Source: bigcommerce.com
Why is the Buy Box important?
For sellers, owning the Buy Box on product listings is extremely important in driving sales. The Buy Box is the first “call to action” purchase option shoppers see when viewing a product listing page, and the vast majority of Amazon shoppers will select the “Add to Cart” or “Buy Now” buttons as their method of purchase over navigating to the “Available from these Sellers” links within the product listing. Shoppers are unlikely to research each vendor selling the same product on Amazon. The majority of shoppers look at the price and condition (new, used, refurbished) and are unlikely to further research each vendor’s selling history, shipping time, order defect rate, or other factors that Amazon considers in ranking sellers for the Buy Box.
Owning the Buy Box on a product listing also allows sellers to advertise the product listing in Amazon PPC advertising campaigns. Sellers who own the Buy Box on a listing can purchase sponsored product listings further driving traffic to their product pages as sponsored product listings will often appear above organic listings in Amazon search results and category pages. If a seller does not own the Buy Box on a product listing, they are not eligible to purchase advertising for that product listing, even if the seller is also the manufacturer or initially created the product listing.
How does a seller win the Buy Box?
For a seller to become eligible to compete for the Buy Box, they must meet certain requirements:
- Vendor must have an active Professional Seller Account. Amazon prohibits Individual or Basic Seller accounts from competing for the Buy Box. Sellers can sign up for a Professional Seller Account for $39.99 per month.
- Product must be “Buy Box Eligible”. Sellers must be in good standing with Amazon who actively monitors each seller’s Late Shipment Rate, Cancellation Rate, and Order Defect Rate. The easiest way for new sellers to win the Buy Box is to enroll in Amazon FBA (fulfilled by Amazon) which takes the burden of fulfillment off the seller and is instead handled by Amazon. Selling products through FBA does come with extra fees however, so each seller will have to evaluate whether enrolling their products in FBA is the right solution vs. fulfilling orders themselves.
- Seller must have available inventory registered through Amazon. If a seller runs out of available inventory, they will also lose the Buy Box.
- Only new items are eligible for the Buy Box. Used and refurbished items are ineligible for the Buy Box. Amazon now offers a separate Used Buy Box for items where no new products are available. The Used Buy Box is separate from the main Buy Box.
There are no other sellers offering my product on Amazon, and I am still not winning the Buy Box. How can this happen?
A common frustration for third-party Amazon sellers is failing to win the Buy Box on product listings where there is little to no competition. This can even happen to sellers who manufacture and sell their own products on Amazon. There are several factors that can prevent a seller from losing out on the Buy Box, despite no competition from other sellers. The most common issues plaguing sellers are their Amazon seller rating, and Amazon’s Buy Box algorithm identifying similar products being sold on and off for a lower price.
Amazon sellers should constantly be monitoring their seller ratings through Amazon’s Brand Health page within Amazon Seller Central and address any issues as soon as possible to get their seller account back in good standing. Amazon tracks its seller ratings on a 30-day period. Failing to meet benchmarks in Late Shipment Rate, Cancellation Rate, Order Defect Rate, etc. will often cause the seller to lose its Buy Box eligibility.
A less widely known issue many sellers experience in losing their Buy Box ranking is how Amazon’s Buy Box algorithm compares the seller’s pricing to identical and similar products both on and off Amazon. If Amazon’s algorithm determines a seller’s pricing to be too high, the seller may lose Buy Box ranking, even if there are no other sellers currently offering the same product on Amazon. To avoid this issue, sellers should avoid marking up their products sold on Amazon compared to any other online channels their products may be sold. Sellers should also research similar products offered both on and off Amazon to ensure their pricing is in-line with typical pricing often seen within the product category. Sellers on Amazon’s Seller Forums have even mentioned that lowering a product’s pricing by as little as $0.01 can have a significant impact on their Buy Box ranking.
Take control of the Amazon Buy Box
Maintaining eligibility for the Amazon Buy Box is a crucial part of being a successful third-party seller on Amazon. Every seller should be regularly monitoring their Buy Box ranking across their product offering, as well as their overall Brand Health through Amazon Seller Central to ensure their seller account is in good standing and they’re products are consistently eligible for a high Buy Box ranking. While some issues around winning the Buy Box can be outside of the seller’s control, most can be actively monitored and addressed by the seller through maintaining a strong account standing, and actively monitoring the pricing of their products by researching identical and similar product listings on Amazon and around the web.
For more information about winning the Amazon Buy Box and optimizing your Amazon Seller account contact Anvil.