How does the Amazon algorithm actually work?
Amazon is undeniably very successful – in Germany as well as worldwide. With maximum customer orientation, the online giant manages to optimize the individual steps of the value chain, thereby binding billions of customers to itself. A significant ingredient in the success recipe of the e-commerce player is the Amazon algorithm called A9: It satisfies the customer’s need to receive a good selection of products as quickly and easily as possible, in the currently best way.
So it’s no wonder that Amazon has even surpassed Google in the product search segment. This is reflected in the company figures: Of about 51.6 million e-commerce buyers in Germany, nearly 44 million regularly shop on Amazon. Numbers that the development team of the Amazon algorithm is not entirely innocent of. Because only when A9 works well do customers find the products they really want to buy and come back next time.
This process is described by Thales S. Teixeira, a lecturer at Harvard Business School, in his book “Unlocking the Customer Value Chain”: The changing needs of the customer lead to digital disruption, not to technical innovations. According to Teixeira, these merely reinforce such tendencies. Amazon has taken advantage of exactly this effect: Suddenly, it became possible to deliver products directly to the end consumer without intermediaries. This satisfied an already existing customer need – namely the desire not to have to leave the house to shop. However, this was only made possible by Amazon’s A9 algorithm.
Many marketplace sellers find this search algorithm very opaque. Why is my competitor ranked number 1 instead of me? Why doesn’t my product rank for this or that keyword? To make matters worse, Amazon regularly revises its algorithm – changes are therefore not uncommon. It is extremely important for business success to understand A9 as much as possible. That is why we have summarized all the important information about how the Amazon algorithm works here for you.
What does the Amazon algorithm do?
They are on everyone’s lips: algorithms. Essentially, they are a set of instructions that define a solution for a class of problems and consist of several individual steps. They can be found in practically every computer program and provide a step-by-step guide on how a task can be solved.
In the case of the Amazon algorithm, it is likely a very complex algorithm that takes many different factors into account. However, only Amazon itself knows which specific aspects come into play. Everyone else has to rely on general information and their own practical experiences. Therefore, it is not entirely easy to understand the Amazon algorithm.
The approach of the Amazon algorithm
Basically, A9 is responsible for determining which products rank for which keyword and then deciding in what order the products are displayed to the customer. The goal is always to present products with the highest likelihood of purchase at the top. Below, we will take a closer look at how the algorithm works.
How does the Amazon algorithm determine contextually relevant products?
To serve the user’s purchase intent as accurately as possible, A9 primarily evaluates user behavior and the product page. The basis is always the keyword. Both the user searches for this through the search mask and the algorithm looks for it in the product to find the intersection of all products that are contextually relevant. Therefore, sellers should definitely engage with the criteria for good SEO and the optimization of their listing.
A9 goes through two steps to determine contextually relevant products:
Now it is clear which products are contextually relevant to the search query. However, there can be very many results. A search engine that does not sort all these results would be pointless for the searcher. For the keyword “sunglasses,” for example, the algorithm finds over 100,000 hits. Therefore, after the contextual selection, the ranking calculation takes place.
How does the Amazon algorithm determine the ranking?
The goal of every seller is to have their listing appear at the top of the ranking for a keyword in the search results. This is because most purchases are made from the first three search results.
The Amazon A9 algorithm takes into account many different characteristics of a product with varying weights – but the two most important are undoubtedly relevance and performance. Both have a direct impact.
The relevance is determined based on the keywords used in the product title, bullet points, backend, and product description. Here, Amazon SEO with good keyword research pays off.
The performance is weighted based on the click-through rate, the conversion rate, and the sales.
The higher these three factors are, the more likely it is that this product will be purchased again in the future, which is why the Amazon algorithm will assign this product a correspondingly higher rank. In addition, Amazon conducts many A/B tests to determine the CTR. In this process, the search algorithm, for example, displays various products in rank 1 for the keyword “sunglasses.” The product with the best CTR will likely also be displayed in first place in the long term.
While relevance can be relatively easily increased through keyword adjustments in the listing (e.g., in the product title), improving performance is more complicated. This is because many aspects play a role here, such as product presentation, general conditions, product ratings, or seller performance (consisting of return rates, etc.). An important factor for the Amazon algorithm, for example, is the price and the shipping method. All of this influences the website visitor’s decision on whether to click on the product and whether to purchase it in the next step.
Click-through and conversion rates are both keyword-specific! While product A ranks at the top for the keyword “sunglasses,” this may not apply for another keyword, e.g., “round sunglasses.” Here, product B may have a better CTR and CR because this item better serves the user’s purchase intention. Therefore, during Amazon SEO, multiple keywords usually need to be considered during listing optimization.
Conclusion: This is how the Amazon algorithm works!
The Amazon algorithm evaluates various factors to determine which products appear for a keyword in the search results and in what order they do so. It takes many different aspects into account in the weighting. First, the content relevance is determined, and then it is checked whether a main image has been set for all these products.
Basically, the algorithm always tries to place those products at the top of the ranking that have the highest purchase probability because they best serve the user’s purchase intention. Therefore, in the second step, the algorithm evaluates the relevance and performance of a product in relation to the keyword of the search query. Relevance is primarily measured based on the keywords used in the listing and can be influenced well. For performance, the click-through rate, conversion rate, and sales play a significant role. This optimization is more time-consuming. In this way, A9 also influences the sales rank.
Image credits in the order of the images: © charles taylor – stock.adobe.com / © Siarhei – stock.adobe.com / Screenshot @ Amazon / © yuriygolub – stock.adobe.com
