Competing with Amazon for the Buy Box: How to Win as a Seller!
If you are an Amazon seller, then you have surely heard of the following myth: Competing with Amazon for the Buy Box is a lost cause. Or so one might think! Truth is, sellers can conquer the coveted Buy Box even without having a vendor contract. If this is new information for you, then you have found your way to the correct blog.
We have to admit one thing beforehand, it is not going to be easy. Prevailing in the Buy Box already demands a lot from the sellers, whereas succeeding in the Buy Box against Amazon requires even more effort. What’s more, the shipping giant traditionally keeps a low profile when it comes to the criteria used by the algorithm to compare the millions of offers. This does not necessarily make it easier to develop an optimal strategy. As we said, outplaying Amazon at their own game is no walk in the park.
Sellers that are in direct competition with Amazon face this battle inevitably, taking into account that almost all online buyers order via the Buy Box and only about ten percent of purchases are made via the box titled “Other suppliers”. To put it simply, the “Other suppliers” box is like the second page of your Google search results – you don’t want to land there.
Only very few providers can afford to leave turnover, resulting from winning the Buy Box, unaffected. This is why we have dedicated this article to helping you increase your chances when you compete with Amazon!
For Beginners: How to Win the Buy Box Against Amazon
Not every seller fulfils the requirements for ending up in the Buy Box, and even those who would theoretically be authorized are far away from attaining the desired yellow button. Suppliers have to work hard to achieve this status and keep an eye on the following criteria – even more so, when competing with Amazon for the Buy Box:
- Account and activity duration: Only sellers with a professional account who have been selling products on Amazon for at least 90 days are eligible for the Buy Box.
- Shipping method and shipping time: In theory, sellers can end up in the Buy Box with “Fulfillment by Amazon” (FBA) as well as with “Fulfillment by Merchant” (FBM) or “Prime by Merchant”. In practice, only sellers with FBA or “Prime by Merchant” have a chance of conquering the yellow button.
- Landed price: A price that is too high usually disqualifies for the Buy Box – conversely, even the lowest price is no guarantee for success. And a strict price policy is not a sustainable strategy to compensate for shortcomings in the other aspects.
- Seller performance: The performance of the seller has the greatest influence on winning or losing the Buy Box. The following points also play a particularly important role while competing with Amazon for the Buy Box:
- Order defect rate
- Pre-fulfillment cancel rate
- Late shipment rate
- Valid tracking rate and on-time deliveries
- Return dissatisfaction rate
- Customer dissatisfaction rate
- Feedback score and count
- Customer response time
- Product availability
- Return rate
For example, the order shortage rate or the rate of late deliveries should be close to zero percent. Especially for products with many suppliers, the Buy Box is highly competitive. Even small deteriorations may result in losing the Buy Box or make it extremely unlikely to win it.
Competing with Amazon for the Buy Box entails that you can’t be caught slacking when it comes to sales, pricing or user experience. Naturally, you will have to provide near-perfect sales performance. Once this requirement is met, the price will have a decisive effect. Usually the offer with the best price/performance ratio is bound to win the Buy Box. Moreover, user experience is so important to Amazon, that having too bad a seller performance may result in suspension of the seller account. In these cases, a plan of action is needed to unblock it.
Buy Box for Professionals: Defeating Amazon
Amazon has given no official statement on the criteria needed to win the Buy Box. However, the Amazon community has made valuable educated guesses thereto, and these guesses already go a long way. Unfortunately, these tips and tricks do not apply if Amazon also acts as a seller and competes for the Buy Box. Since, in many of these cases, the shipping giant appears in the Buy Box, the myth has established itself that other providers have no chance from the outset.
Two things that you can count on as a seller: The algorithm often prefers Amazon and it is also likely that stock levels play a big role. If Amazon has only a few items in left in its stock, the probability increases that other suppliers will appear in the Buy Box instead. Conversely, a full inventory and a low probability of a price increase make success very unlikely for retailers who are competing against Amazon for the Buy Box.
In principle, retailers have little influence as long as the seller’s performance is good and all other Buy Box criteria are met. Not only does Amazon keep the secret of the algorithm, but the market fluctuates extremely. In eCommerce in general – and at Amazon in particular – it is therefore an advantage to continuously adjust the available set parameters. To keep track of your competitors and of the the market in general you can use an Amazon Analytics Tool.
Don’t hesitate to try stuff out over and over again! Just because you didn’t land in the Buy Box this week, doesn’t mean you won’t be there next week.
The Most Important Factor: The Price
Furthermore, the algorithm will take other factors into account, such as category, time of day, region of access, general browser data, and specific behavioral analyses of the respective Amazon customer. Maybe John from Manchester finds Amazon in the Buy Box while buying a reading lamp at night. This does not necessarily mean that Emma from Edinburgh, who, during lunchtime, is also looking for a reading lamp, will make the same experience.
There is, however, one important parameter that sellers should definitely keep an eye on when competing with Amazon for the Buy Box: the price. Anyone who does a sloppy job here, doesn’t continuously improve and/or gives up too early will have to remain satisfied with being placed at the bottom of the seller ranking and hardly selling anything.
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Always keep an eye on the market and the prices of your competition, even if that competitor is Amazon. Often – but not always – offering products a little bit cheaper than everyone else will boost your chances of landing in the Buy Box.
While competing with Amazon for the Buy Box, paying attention to economic efficiency and basic business aspects should be a no-brainer. In some cases, it may even be worth a try to set the price little higher than Amazon, due to the fact that the algorithm prioritizes such offers from time to time.
Price Optimization for Pros: Dynamic and Intelligent
Most sellers are probably aware that manual price adjustment is hardly affordable for a large number of products. In addition, a human being is not able to register all available data in the system and interpret it within a short time. Instead, it is generally recommended to rely on a dynamic repricer.
Tools like these continuously analyze the competition and automatically adjust the product price to the current market situation. This has two advantages: Firstly, it increases the probability of the seller’s success in general, whether against Amazon or other competition; secondly, with a dynamic repricer, the seller always sells at the best possible price, since there are no static rules such as “always 10 cents cheaper than everyone else”.
Rather than applying static rules, a dynamic and intelligent repricer incorporates all available data and optimizes the price on this holistic basis. It is a great assistance for those who are competing with Amazon for the Buy Box. After all, betting only on the cheapest price ultimately costs the sellers money because they have sold for less than they should have. Instead, it is possible that a seller with first-class ratings in the Buy Box will defeat Amazon, precisely because they offer the product at a slightly higher price than their competitors.
In addition, the SellerLogic Repricer can be used to play out different strategies. After all, someone who wants to optimize a product in terms of its ranking has different requirements than someone who fights for the Buy Box or offers private-label goods. With the time control, sellers are also flexible if different strategies should make sense at different times of the day or week. In order to maintain profitability, minimum prices can also be set for individual products, but maximum prices are also possible. Sellers can also specify the desired margin.
Conclusion: Without Repricing, No Buy Box!
If you want to win against Amazon as a competitor in the Buy Box, you need to be persistent. After all, the criteria used to allocate the Buy Box are designed for the perfect customer journey. Those who cannot offer top values in customer satisfaction have practically no chance of appearing in the Buy Box at all. If Amazon sells the product itself, the difficulty for sellers increases significantly.
While competing with Amazon for the Buy Box, high flexibility is required. Sellers should use the adjusting parameters available to them on a continuous basis. This applies in particular to the price but can hardly be achieved 24/7 by any seller. That is why dynamic repricers are a must-have in the battle for the Buy Box. Because only when all system data is analyzed and evaluated, can the price be optimally adjusted with regard to the chosen strategy.
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