Competing with Amazon for the Buy Box: How to win as a Seller!
Almost every Amazon seller knows this myth: Competing with Amazon for the Buy Box is a fight at a loss. But that is not true! Even sellers with no vendor contract can conquer the coveted Buy Box.
However, it will not be an easy task. To prevail in the Buy Box demands a lot from sellers - to succeed 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.
However, the sellers in direct competition with Amazon will inevitably have to face this battle. Nearly almost all online buyers order via the Buy Box. Only about ten percent of purchases are made via the "Other suppliers" box below the Buy Box.
Only very few providers can afford to leave this turnover unaffected. Therefore, in this article, we will look at how you can increase your chances when competing with Amazon for winning the Buy Box!
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For beginners: How to win the Buy Box against Amazon
Not every seller is entitled to end up in the Buy Box, and even those who would theoretically be authorized are far from having the desired yellow button in their pockets. Rather, suppliers must work hard to achieve this status and keep an eye on the following criteria – even more, when competing with Amazon for the Buy Box:n:
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.
Accordingly, it is considered certain that you will have to provide near-perfect sales performance if you are competing with Amazon for the Buy Box. Provided that these criteria are met, the price will have a decisive effect. The offer with the best price/performance ratio is usually the winner.
For Amazon the user experience is that crucial that having a too bad seller performance may result in the suspension of the seller account. In these cases a plan of action is needed to unblock it.
Buy Box for Professionals: Defeat Amazon
Although Amazon makes no statement on the Buy Box criteria, there are some educated guesses. However, this does 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 become established that other providers have no chance anyway.
It's true: Often the algorithm prefers Amazon. Moreover, it is likely that stock levels play a big role. If Amazon has only a few items in 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. Amazon not only keeps the secret of the algorithm, but the market is also extremely variable. 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 you competitors and of the the market in general you can use a Amazon Analytic Tool.
So for you as a seller, the motto is: Try out what works! Over and over again. Just because you landed in the Buy Box last week, it doesn't mean you’ll have it again next week.
Most important Factor: the Price
Furthermore, the algorithm will take other factors into account, such as the category, time of day, a region of access, general browser data, and specific behavioral analyses of the respective Amazon customer. Maybe Mr. Smith from Manchester finds Amazon in the Buy Box while buying a reading lamp at night. This does not necessarily also apply to Ms. Douglas from Edinburgh who is also looking for a reading lamp at lunchtime.
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 or gives up too early will have to be satisfied with the bottom places in the seller ranking and will hardly sell anything.
Do you want to increase your Buy Box share?
SellerLogic Repricer, 14 days trial, free of charge and any obligation.
Instead, you should always keep an eye on the market and the prices of your competitors - even if they are called Amazon. Often it is useful to offer products a little bit cheaper than everyone else - but not always!
Paying attention to economic efficiency and basic business aspects should be evident of course while competing with Amazon for the Buy Box. In some cases, it may even be worth a try to appear a little bit more expensive than Amazon. Occasionally, the algorithm also prioritizes such offers.
Price optimization for clever ones: 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 the data available in the system and interpret it within a short time. Instead, it is generally recommended to rely on a dynamic repricer.
Such tools continuously analyse the competition and automatically adjust the product price to the current market situation. This has two advantages: Firstly, it increases the probability that the seller will succeed against Amazon or others at all; 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".
Instead, 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 the 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.