What eCommerce Merchants Need to Know About the Amazon Buy Box

Posted on January 24, 2010. Filed under: Amazon | Tags: , , , , |

From the viewpoint of a 3P merchant, listing and selling on Amazon is very different from other marketplaces.  There is always competition for sales on platforms such as eBay and Bonanzle but the competition on Amazon is much more direct.  And the unique aspect of competing on Amazon is that Amazon chooses to promote one seller above all the others so that the customer is given the “top choice” immediately without having to review each seller and make a purchasing decision about who to buy from.  And because all sellers are held to a high standard on Amazon, most buyers probably don’t see much distinction between Amazon 3P sellers anyway which is probably why most Amazon customers simply buy from the seller who owns the Buy Box.  So, the secret to getting sales on Amazon for 3P merchants is to own the Buy Box.

What is the Amazon “Buy Box”?

Amazon is unique in that the same product, sold by different sellers, appears only once on the site and the sellers compete on that one product listing detail page.  When a customer starts the purchasing process, they land on an Amazon product detail page which includes an “Add to Shopping Cart” button.  When the shopper adds the item to their cart using that button then the one merchant who was selected to fulfill that order is known as the “seller who owns the Buy Box”.  Of course, the customer can click a link to view other seller choices but a large portion of the time the Amazon buyer simply chooses to add the item to their cart using button provided.  So, the merchant who has earned the Buy Box will earn the most sales for any particular item.

How does an Amazon 3P Seller win the Buy Box?

Only Amazon sellers who are Featured Merchants, Pro Merchant sellers who meet or exceed performance-based requirements, are eligible to win the Buy box.  Performance-based requirements include such things as customer feedback, A-to-Z claims and chargebacks, cancellation rates and late shipment percentages, time and experience selling on the Amazon platform, and Gross Merchandise Sales.  Note that the Featured Merchant status is category-based meaning that a seller can qualify as a Featured Merchant in one category but not another category. 

So, for any one product listing all Featured Merchant listings are evaluated based on total cost (price+shipping)  as well as availability among other factors, and then only one listing is selected for the Buy Box.

How can you keep track of your Buy Box Percentages?

Amazon  has some nifty reports that sellers can use to evaluate traffic and sales.  One of those reports gives you the Buy Box Percentages for the items you are selling.  Below is our Buy Box percentage for December 2009:

You’ll notice a few interesting things about this report of ours.  First, the Buy Box percentage fluctuates quite a bit.  Most months, our Buy Box percentage stays steady between 80-85% but in December we had competitors who lowered their prices considerably in order to get sales.  For many reasons we didn’t compete on price, so we let them have the Buy Box.  And then two days before Christmas and two days after Christmas we put our Amazon store on vacation so you’ll notice the Buy Box percentage was at zero.

What doesn’t Amazon tell you about winning the Buy Box?

We ran into a situation this holiday season that was interesting.  We noticed that a particular item for which we had the Buy Box and that was a really good seller for us last year was not getting any sales.  We had invested a great deal in this item as we had predicted it would be a good seller for us. 

So, we investigated by going to Amazon and searching for the item as a customer would and we found that a competitor had created an entirely new product listing page (incorrectly) for the item and had put a slightly lower price.  We contacted Amazon who said that they would review the information and would most likely merge the two product pages. 

We waited a week and Amazon didn’t take action so we actually split our inventory between the two product pages and put a slightly lower price on the newly created product listing page that was put up by our competitor.  Our sales skyrocketed and we kept the Buy Box on both pages throughout the holiday season.  Mid-January Amazon responded about the duplicate listing pages and if we had waited to take action we would have lost out on a great many sales.  So, if you have the Buy Box for a product but are not getting sales it might be time to investigate why your item is not performing as you had anticipated.

Sometimes owning the Buy Box isn’t that important.  We have some items in inventory that were limited in production and sold out quickly from the manufacturer.  We won’t discount those items and sometimes we actually charge a premium above MSRP for those items across the various channels where we sell.  So if a competitor wants to sell that item cheaper and lowers their price to win the Buy Box we aren’t going to compete with them on price.  We know that we’ll sell all of our inventory and we will sell it at the price we want.  And during the holiday season we don’t compete on price because we are already so busy that if we lowered our prices to compete and get even more sales we simply couldn’t  handle the volume and the customer service we provide would suffer as a result. 

Winning the Buy Box for the majority of your products is the best way to sell the most items on the Amazon platform.  But it isn’t necessary to own the Buy Box 100% of the time in order to sell successfully and profitably on Amazon.  And even owning the Buy Box doesn’t ensure sales if your competitor circumvents the system.  Understanding how the Amazon system works and investigating when something doesn’t seem right are the real keys to success for selling on Amazon.

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5 Responses to “What eCommerce Merchants Need to Know About the Amazon Buy Box”

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[…] This post was mentioned on Twitter by magisterrex – Dan, myblogutopia, TheBrewsNews, TheBrewsNews, abullrun and others. abullrun said: RT @TheBrewsNews What eCommerce Merchants Need to Know About the Amazon Buy Box http://tinyurl.com/yh7xpkr […]

Dear Brews, thank you for the informative post! I did not find the buy box percentage in my Amazon seller account. When I called the customer support, they told me they do not provide it. I am wondering if you got your report from Amazon since you are maybe a “power seller”, or did you get the report from 3rd party? Thank you.

Brian, I’m not sure what type of account you have. I have a Pro Merchant account so perhaps this is a service that is provided to Pro Merchants as included in the monthly fee we pay.

Well, I’ve been a pro merchant for a while. Could you tell me where in your seller’s acct the buy box percentage chart is?

Hi,
Thank you for your post. i need some information about amazon.com. i am not in usa. like to learn about amazon.com. but much mattirial so duf. no compeletely professonal information. kindly tell what i can to for learning ?

Regard Zahid


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