New Study: Does Amazon Prefer Itself in the Buy Box?
The accusation: Amazon prefers itself when awarding the Buy Box. The rumors have existed for years. Especially within the community of Amazon sellers, this accusation seems to have established itself as truth. There is currently no concrete evidence of circumventing competition rules, but antitrust authorities are at least investigating the corporation.
The particularly problematic aspect is the dual role that Amazon occupies: the company is both the owner of the platform and a seller on that platform. While Amazon does not have a monopoly, it does hold a very high market share in the German online retail sector.
Now, the ARD business magazine Plusminus has also addressed Amazon and the rumors surrounding the Buy Box. In collaboration with a price analysis company, several tens of thousands of products were observed and evaluated. The results are quite surprising – but different from what most marketplace sellers would likely suspect.
Why is the Buy Box so crucial?
Plusminus focused on the Amazon Buy Box. The yellow button that allows products to be added to the shopping cart is known to every customer on the trading platform. For sellers, especially those of branded goods, the shopping cart field plays a crucial role.
Instead of creating a separate product page for each offer (as eBay does, for example), Amazon consolidates all offers of the same product on a single detail page. To decide which seller receives an incoming order and thus sells the product from their inventory, the Amazon algorithm considers various parameters, including price, shipping method, shipping speed, and any customer reviews.
Now, the vast majority of customers order directly through the yellow button and do not take the time to look at the other offers for the product. Therefore, whoever wins the Buy Box receives about 90% of the sales. Those who do not win the Buy Box practically miss out. Thus, the competition for the shopping cart field is crucial, and the awarding criteria are of antitrust significance. If Amazon were to prefer itself here, it might be abusing its market power.
Does Amazon Prefer Itself and Its Own Offer? – Study Results
For the Amazon study, Plusminus examined 64,000 products on the online giant’s marketplace. The analysis considered both price and delivery speed, but did not include other criteria such as the reliability or customer rating of a seller. All products included in the study were offered by multiple sellers as well as by Amazon itself.
» According to Plusminus, Amazon held the Buy Box for 20,000 of the 64,000 products. That’s just over 31%.
» For about 8,000 products (12.5%), Amazon held the Buy Box even though there were other sellers offering a lower price. Here, Amazon was on average 1.83 euros more expensive, but usually also the seller with the fastest delivery time.
» For 156 products, on the other hand, Amazon not only held the Buy Box at a higher price, but there was also at least one other seller who could deliver as quickly as Amazon. This amounts to just 0.25% of the products examined.
For each of the 156 sellers, it could potentially be a significant loss if Amazon were indeed to prefer itself here and disregard competition rules. However, regarding the overall study, the result is different from what many marketplace sellers might have previously suspected. 156 out of 64,000 products is an insignificantly small proportion.
Additionally, the Plusminus study considers the Amazon Buy Box based solely on two awarding criteria: price and delivery speed. Both aspects are undoubtedly very important, but they are not the only decisive factors. At least eleven other Buy Box criteria can be identified that also play a role in the allocation of the shopping cart field. Ignoring these provides only a distorted view of reality.
How Marketplace Sellers Win the Buy Box at the Highest Possible Price
Holding the Buy Box not at the lowest price, but at a higher price, is indeed possible for the majority of sellers of branded goods. However, manual price adjustment is a futile endeavor – there are too many criteria and competitors to keep track of. With a suitable repricing tool, this can be managed quite reliably. This is exactly what SELLERLOGIC has been doing for its customers for years. A Buy Box share of 95% is not uncommon.
Annemarie Raluca Schuster
“Ultimately, companies can only implement a successful pricing strategy with software; doing it manually is simply not feasible. With the SELLERLOGIC Repricer, I was able to increase my Buy Box share to 95%!”
In contrast to the Amazon study conducted by Plusminus, the repricer inherently takes into account the important Buy Box criteria. As a result, it wins the Buy Box not at the lowest price, but at the highest possible price, depending on the current status of the other metrics of the selling seller.
Do you also want to achieve a Buy Box share of nearly 100%? Then test the SELLERLOGIC Repricer for free for 14 days now!
Conclusion: Plusminus Study on the Amazon Buy Box
Amazon’s dual role, combined with the high market share the company holds in e-commerce, is certainly problematic, even though there is no classic monopoly in online retail. However, the results of this large-scale study of nearly 64,000 products also highlight why it is so important not to focus solely on price or delivery speed as the decisive metrics.
In addition, there are many other customer-relevant criteria that influence the price at which a seller can win the Buy Box for their offer. Nowadays, price setting for Amazon sellers is only meaningful and economically feasible with intelligent software. It is important to choose a dynamic repricer that not only monitors the price but also keeps track of other important metrics and competitors.
Image credit: © Nuthawut – stock.adobe.com
