Amazon Buy Box - what is it and how can you win it?

Amazon Buy Box - what is it? This is one of the most important questions that sellers on Amazon ask themselves. The Buy Box determines whether you are the seller of first choice or another seller, and it affects your sponsored campaign performance. It is the Amazon A9 algorithm that decides who will receive the Buy Box, and as a seller, you are not entirely able to control this. However, there are certain rules and elements that must be met in order to increase the likelihood of having the Amazon Buy Box awarded to your offer.

Types of Sellers:

There are two types of sellers on Amazon:

Amazon selling a wide range of its own brands and distribution products (Amazon Vendor Central model)

External sellers, who usually specialize in one or several categories (Seller model)

Because there are no restrictions on the number of sellers who can use the Amazon platform, many sellers often sell the same item. They are known as resellers (as compared to selling under one's own brand, where items, known as Private Label, are often from a registered brand).

[Reseller - In short, an Amazon Reseller is an individual or a company that sources products from external brands in wholesale quantities - and then sells (resells) them on Amazon to retail customers realizing profits on the difference between the purchase and sale.]

What is Amazon Buy Box? 

When many Amazon sellers sell the same product at the same time, competition suddenly arises. For resellers, one of the biggest factors for success is winning the Amazon Buy Box, that is, being the seller of first choice.

The Amazon Buy Box is displayed on the individual product page and for the customer, it is the quickest and easiest way to shop. The offer that appears in the Buy Box is the one that Amazon considers to be the best among all available for that product. The Buy Box is located in the upper right corner of the product page, contains an "Add to Cart" button, and literally invites Amazon customers to purchase that specific product from that seller (the Buy Box winner). All other sellers offering that product are listed by name with their selling prices shown below the purchase field.

The importance of having the Amazon Buy Box is evident by the fact that as much as 85% of Amazon sales are made through the Buy Box, and this percentage is even higher for mobile purchases. Here, unlike on a desktop or laptop, the mobile page contains the Buy Box directly under the product image. Amazon stated that in the summer of 2016, as much as 72% of customers worldwide made purchases via smartphone, and year after year, the popularity of this shopping method is increasing.

In developing the Buy Box formula, Amazon ensures that only verified and trusted sellers who offer reasonable prices win the Buy Box. The result? Effective sales on Amazon and a positive experience for consumers, encouraging them to shop again.

To "earn" the Buy Box, you must prove to Amazon your reliability, product quality, and provide top-notch account management. To even qualify to compete for the Buy Box you should meet the following requirements:

Have a "Professional" account status and sell for at least 90 days.

Have "Buy Box-eligible" status - sellers with the status qualifying for the Buy Box (previously known as Amazon Featured Merchant Status) gain benefits related to the placement of their offers on Amazon. Their offers qualify to compete for the Buy Box, while offers that did not win the Buy Box qualify to be included in Buy Box More Buying Choices.

Selling new products.

Having available inventory of the item competing for the Amazon Buy Box. The Amazon algorithm favors sellers whose product availability is kept at a high level.

What affects the awarding of the Amazon Buy Box?

Understanding how the Amazon algorithms work allows for optimizing the performance of relevant indicators, which in turn increases the chances of winning the Buy Box and defeating competitors. There are many variables that Amazon takes into account.  They are presented below. The key is to invest resources and energy in those factors that have the greatest impact on the Amazon Buy Box, and to strive to ultimately meet all requirements.

Fulfillment Method:

Sellers who choose FBA (Fulfillment by Amazon) or SFP (Seller-Fulfilled Prime) generally have an advantage over those who sell FBM (Fulfillment by Merchant). As mentioned earlier, the overall customer experience related to the purchase is extremely important to Amazon, which is why the platform rewards those who outsource the operational handling of Amazon orders. This is because it guarantees timely and hassle-free delivery. If, however, you prefer to handle shipping and all other operational tasks yourself, you still have a chance to win the Amazon Buy Box, but you must "prove" that you deliver quickly, reliably, and in a way that is satisfactory to customers. In other words - Amazon's sales service works perfectly for you.

Product Price - The total amount for which the product is sold on Amazon:

Amazon's goal is to increase sales because higher sales volume means greater revenue for the online giant. For this reason, the retail seller with the lowest price is often awarded the Buy Box.

However, the lowest price doesn't always win. As a customer-oriented platform, Amazon also assigns a key role to sales performance. As a result, excellent sales results and ratings can surpass the lowest price in the battle for the Amazon Buy Box. If two sellers have exactly the same metrics, but the price of one of them is 0.01 lower, that seller will win the Buy Box, but not 100% of the time - Amazon will also divide the sales among other sellers, but the most sales will be conducted by the seller with the lowest price. If Amazon appears as a seller on a given product listing, the rules change, and it is Amazon's offer that largely wins the Buy Box, and even a price advantage greater than 0.01 does not guarantee obtaining the Buy Box.

Shipping Time:

The faster you ship, the better. The most favorable delivery is within 2 business days if you are indeed operating under the FBM model.

Product Availability:

Temporarily unavailable listings and "out of stock" messages effectively prevent you from obtaining the Buy Box. Make sure that stock levels are replenished regularly.

Account Health

The overall account quality rating, which includes Customer Service Performance (CSP) and Delivery Performance.

Customer Service Performance (CSP) Order Defect Rate (ODR):

ODR is a key criterion determining your business's ability to provide the best customer service. This comprises all orders with defects (defined below) as a percentage of the total number of orders within a given 60-day period. The following factors affect the ODR of your account:

Negative reviews, A-to-Z Claims

Refunds back to customer accounts (Service Chargeback Rate).

According to Amazon's policy, the defective order rate must not exceed 1% of all orders. Recently, Amazon also included the Invoice Defect Rate (IDR) in the CSP metric, which is the absence of an attached invoice to a customer order. At this moment, Amazon recommends that this rate should not exceed 5%. Currently, there is no penalty for not meeting this target, but as of April 2021, an IDR above 5% may result in account deactivation.

Customer Reviews:

Customer reviews are another factor impacting the Amazon Buy Box algorithm. This feedback includes positive, neutral, and negative reviews from customers over the past 30, 90, and 365 days. To achieve the best results, a seller should receive at least a 90% positive customer review rating. Amazon also analyzes how many reviews you have in relation to your sales history. If you have a longer sales history, the Amazon Buy Box algorithm expects a greater number of reviews. That is why it is so important to encourage buyers to leave reviews after a completed purchase.

Response Time to Customer Messages:

The seller is obliged to respond to every customer message within 24 hours, regardless of the day of the week, holidays, or vacations. However, when competing for the Amazon Buy Box, responses should be provided within 12 hours of the inquiry, giving you an advantage over the competition.

Delivery Performance:

Valid Tracking Rate (VTR)

This is the percentage of all orders shipped with correct shipping information (correct Tracking Number and right carrier name).

Here, the seller must maintain a level above 95%.

Late Shipment Rate (LSR)

This is the number of orders shipped later than the expected shipping date. The LSR rate should be kept below 4%.

On-Time Delivery Rate (OTDR)

This is the percentage of orders that were delivered on time. Amazon recommends that this rate is maintained above 97%.

Cancellation and Refund Rate

A high number of canceled orders and returns also negatively affects your overall account quality. Here, the rate must not exceed 2.5%.

The table below summarizes the elements that affect the Amazon Buy Box and classifies them according to their significance in the process of securing it. Analyze your Seller account in terms of the indicators below, identify which elements you can improve. Periodically return to this summary to review these values and set goals for further optimization.

SUMMARY

There is no golden solution to winning the Amazon Buy Box. The success consists of a number of indicators that must be monitored and continuously improved.

The ability to sell under the FBA model, having Prime products, perfecting customer service, and understanding pricing strategies are key to securing this coveted privilege. Of course, Amazon has not publicly disclosed the factors mentioned here. Similar to Google's algorithm, it remains a secret of the A9 Algorithm, however, our experience with many client projects and findings from other experts suggest that the above indicators have a strong impact on the placement of your offer in the Amazon Buy Box.

At Go2Market, we are eager to share knowledge, our experiences, and encourage you to do the same. If you have any comments or questions regarding the Amazon Buy Box, feel free to share them with us and other sellers in the comments.

Happy Buy Box winning!

Magda Wiącek

Head of Customer Care