Amazon basics – part 3: understanding the Buy Box
Now that you’re getting to grips with selling on Amazon, it’s vital to understand how ownership of the Amazon Buy Box is shared and how it impacts your sales.
It seems logical that when you list a product and someone searches for it, they can buy it from you. One of the features of Amazon’s marketplace is that they have an algorithm that places one seller in a prominent position above all other sellers of that item.
The Buy Box is the section on the right of the page that contains the bright orange ‘Add to cart’ button (or ‘Add to basket’ on Amazon.co.uk). It’s worth noting that as a new seller, you may not be eligible to win the Buy Box from the outset.
Amazon Buy Box Eligibility
While there is no additional fee to become Amazon Buy Box eligible, sellers need to meet a number of performance requirements in order to compete. It’s also important to remember that not all product listings are able to gain Buy Box eligible status. Amazon have strict listings requirements to optimize the buyers experience.
A list of some of the most important factors taken into consideration when determining Amazon Buy Box eligibility is available to all sellers. One of these is the ODR (Order Defect Rate), which is a combined metric of customer feedback, claims and chargebacks.
If ODR reaches 1%, you immediately lose your Buy Box eligibility. Amazon take multiple other factors into account such as, speed of delivery, shipping options, price, customer service, contact response times, as well as your account history and experience. You are also required to have Professional seller status.
As a minimum, every seller should be working towards beating the following seller performance targets:
- Order defect rate: < 1%
- Pre-fulfilment cancel rate: < 2.5%
- Late shipment rate: < 4%
If you fail to meet these targets you can lose Buy Box eligibility and risk the removal of your selling privileges.
Win The Amazon Buy Box
It’s impossible to ensure you always win the Buy Box because the decision is based on Amazon’s own complex algorithm. You can, however, make sure you tick the following boxes to give yourself the best possible chance:
– List accurately: Carefully title, describe, and categorize items and their conditions to avoid customer confusion.
– Ship accurately: Build reliable fulfilment and shipping procedures to avoid customers receiving the wrong item.
– Ship on time: Meet or beat your estimated delivery date, especially around the holidays. If you are not going to make the estimated delivery date, notify your customer right away, even for issues outside of your control, like carrier issues or environmental factors, for example.
– Communicate with customers: Notify customers when an order is delayed and respond quickly to customer contacts requesting order updates. The right communication at the right time can help build trust between you and the customer.
– Provide excellent customer support: Provide post-transaction support (refunds, returns, and exchanges) to help ensure customer satisfaction.
– Price competitively: Customers trust that they will find low prices on Amazon.com.
There’s arguably nothing more important to sellers than the Amazon Buy Box. Amazon estimate that around 82% of sales are made through the Buy Box. You’re likely to see a substantial increase in sales when you own the Buy Box for a specific product.
Using Repricing to Win the Amazon Buy Box
To succeed as an Amazon seller, you must be price competitive and achieve a viable margin on each sale. A repricing tool helps you achieve the highest price and still win the Amazon Buy Box. You don’t have to spend valuable time tracking competitors’ prices.
A repricing tool automates the process making sure you compete against every other seller. An advanced repricer, like XSellco Price Manager, avoids losses by allowing you to input all selling costs to achieve a profit on every sale.
With an automated repricer you can;
- Reprice faster than your rivals
- Achieve a profit on every sale
- Remain competitive with every other seller
- Create rules to compete in the full range of scenarios
- Maximize the opportunities to make a sale
It’s a cost effective strategy that means you react instantly to competitive changes to increase your Amazon sales.