New study: Does Amazon prefer itself in the Buy Box?
The accusation: Amazon prefers itself in the allocation of the Buy Box. The rumors have existed for years. Especially in the community of Amazon sellers, the accusation seems to have already established itself as truth. There is currently no concrete evidence of a circumvention of competition rules, but at least the antitrust authorities are also investigating the corporation.
Because the dual role that Amazon takes on is particularly problematic: The company is both the owner of the platform and a seller on this platform at the same time. Although Amazon does not have a monopoly, it does have a very high market share in the German online trade.
Now the ARD business magazine Plusminus has also dealt with 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 probably assume.
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 of the trading platform. And for sellers, especially of retail goods, the shopping cart field plays a crucial role.
Because 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 detail page. To decide which seller receives an incoming order and thus has sold the product from their inventory, the Amazon algorithm considers various parameters, including price, shipping method, shipping speed, and any customer reviews.
Now, the fact is that the vast majority of customers order directly through the yellow button and do not bother 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 walk away empty-handed. Hence, the competition for the shopping cart field is crucial, and the allocation criteria are antitrust-relevant. 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 marketplace of the online giant. Both price and delivery speed were considered in the analysis, but no other criteria such as the reliability or customer rating of a seller were taken into account. All products included in the study were offered by several sellers as well as by Amazon itself.
» In 20,000 of the 64,000 products, according to Plusminus, Amazon held the Buy Box. That is just over 31%.
» In 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.
» In 156 products, on the other hand, Amazon not only held the Buy Box with a higher price, but there was also at least one other seller who could deliver as quickly as Amazon. That 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 would have likely assumed beforehand. 156 out of 64,000 products is an insignificantly small share.
Moreover, the Plusminus study considers the Amazon Buy Box solely based on two allocation 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 picture of reality.
How marketplace sellers win the Buy Box with the highest possible price
Holding the Buy Box not with the lowest price, but with a higher price, is indeed possible for the majority of sellers of retail goods. However, manually adjusting prices is a hopeless endeavor – too many criteria and competitors need to be kept in view. With a suitable repricing tool, this can be managed quite reliably. This is exactly what SELLERLOGIC has been achieving 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; it is not feasible manually. 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 with the lowest price, but with the highest possible price depending on the current status of the other metrics of the offering seller.
Do you also want to achieve a Buy Box share of almost 100%? Then test the SELLERLOGIC repricer for free for 14 days now!
Conclusion: Plusminus study on the Amazon Buy Box
Amazon’s dual role in connection with the high market share it has in e-commerce is certainly problematic, even though there is no classic monopoly in online trade. However, the result of this large-scale study of nearly 64,000 products also shows 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. Only with intelligent software is pricing for Amazon sellers still meaningful and, above all, economically feasible today. It is important to choose a dynamic repricer that keeps an eye on not only the price but also other important metrics and competitors.
Image credit: © Nuthawut – stock.adobe.com
