Amazon is responsible for nearly a third of all US online retail sales, and these numbers are going to keep growing with time. With close to 82% of the sales on Amazon happening through the Buy Box, it is vital for sellers to master it for higher conversions and greater market share.
A buy box (also called the “Featured Offer”) facilitates a low-friction shopping journey on Amazon by enabling customers to make their purchases quickly, within two to three steps. Since there is no limit on the number of sellers that can use the marketplace, multiple sellers often sell the same item. However, not more than one seller will have the BuyBox at any moment. Moreover, at times, even if you are the only seller selling a product, you may not get the Buy Box.
A low Buy Box percentage or absence of it means that there are higher chances of other sellers or competitors cutting into your sales. Whilst, Amazon doesn’t have an exact formula for winning the Buy Box, there are a range of factors that influence the Buy Box and in turn the purchase decision.
In this blog, we deep-dive into key factors that influence your chances of winning the Buy Box:
1. Competitive Pricing
Non-competitive pricing can lead to a decline in sales and affect your chances of winning the Buy Box. For an effective pricing strategy to win the Buy Box, you must keep the following points in mind:
- Price Parity off-Amazon: You need to be vigilant of your prices off-Amazon. If the price of the product that you are selling is lower on other websites (another marketplace or your own website), there is a chance that Amazon may not give you a Buy Box. Therefore, it is necessary to have uniform pricing across multiple websites.
- Sharp Price Variations: Another important thing to keep in mind is sharp price variation. At times, if your price is too low for a certain period and then you increase your price sharply (eg. earlier, the price was USD 15 and you increased it to USD 35), you may not get the Buy Box at times. In such cases, it is wise to increase the price of the product gradually over a period of a few weeks or months.
2. Competition from Unauthorized Sellers
The number of players competing for the Buy Box also plays an important role in determining your chance of winning the Buy Box. The more the number of unauthorized sellers on your listing, the lower will be your chance of keeping the Buy Box.
You need to closely monitor the sellers to whom you are losing the Buy Box, and get rid of all unauthorized sellers attached to your products to maximize your chance of winning the Buy Box. With unauthorized sellers, you are not just at the risk of losing your Buy Box, however, your brand reputation is also at stake too. Since these unauthorized sellers might be sourcing through questionable channels, you will have absolutely no control over the quality of products that are being shipped to your customers.
3. Fulfillment & Shipping Performance
The amount of time an item takes to reach the customer plays a crucial role for not just customers, but also the Buy Box. This is especially true for time-critical products like gifts, birthday cards and perishable goods. In the case of self-fulfillment methods, it is crucial to establish an efficient shipping and delivery mechanism to ensure that the shipping duration is within the 5-day bracket; even better is if it fulfills the 2-day window to earn the Prime tag.
Along with this, it is also important for sellers to remain truthful to their customers. In case, your actual shipping time is longer than your advertised, it will affect your performance metrics and ultimately hurt your chances of winning the buy box.
Sellers must also maintain a high on-time delivery rate and a low late shipping rate. For instance, for one of our clients on Amazon India, we analyzed their sales-by-geography report and made recommendations on which new locations they should opt for warehouses in. This not only helped them reduce their shipping time, earn the prime tag and win the buy box, but also boost sales even more in these regions.
A combination of these parameters determines the seller’s shipping performance. High shipping performance increases your chances of winning the Buy Box.
4. Effective Inventory Management
Amazon prefers sellers who have enough inventory to deal with the demand which the Buy Box can create. Therefore, sellers with effective inventory planning, consistent sales, and good stock history gain a higher Buy Box share. It is imperative to plan the inventory well in advance, especially in the case of products that are more seasonal in nature. For example, products like sweaters that experience high sales velocity in the winter season must be planned efficiently to meet the rise in demand.
If the product is out of stock, the Buy Box is automatically lost and rotated to the next bestseller. Additionally, sellers that opt for FBA (Fulfillment by Amazon) and SFP (Seller Fulfilled Prime) have a much higher chance of winning the Buy Box.
At Growisto, we focus on demand sensing based on a host of factors such past sales, marketing plans, seasonal conversions, Amazon platform traffic behavior, etc. Demand sensing leads to better inventory estimates thereby reducing the chances of product going out of stock.
For one of our clients in the Beauty & Personal Care category, we created rolling monthly inventory plans – which improved their inventory in-stock rate from 49% to 92% on their top seller products within 5 months.
5. Customer Service Metrics
Delivering well-manufactured products, offering prompt responses, and garnering high ratings can together ensure high customer service performance. Therefore, it is necessary to focus on all the aspects of customer service performance.
- Order defect rate (ODR): ODR comprises three different elements- negative feedback, service chargeback rate, and A-Z guarantee claim rate. Amazon takes into account all three factors to determine the number of defective orders. What you need to remember is that if your ODR rate is less than 1%, your chances of winning the buy box are high. Keep in mind that a consistently high ODR rate might lead to the removal of your selling privileges.
- Feedback: The culmination of all customer feedback (positive, neutral, negative) you received over the last 30 days, 90 days, and 365 days, is considered, with the most recent reviews having the biggest impact. High feedback count and rating can strengthen your odds of being the Buy Box winner. Furthermore, in the case of negative feedback, it is even more crucial to respond in a prompt and timely manner.
- Customer response time: Responding within 24 hours for negative feedback or marking ‘no response needed’ for positive ones is the primary step every seller must undertake. If more than 10% of the messages are responded after 24 hours, it can adversely impact your overall ratings.
In the case of one of our clients, the overall Buy Box percentage rose from 68% to 90% by revisiting the pricing strategy of multiple products and overall account performance. In addition to fixing the product’s price, the shipping cost for seller-fulfilled products was also reduced to make the final price competitive.
All in all, getting a Buy Box on Amazon can mean huge gains for your product performance and sales.