To master the art of winning the Buy Box, sellers need to understand how Amazon determines who wins the Buy Box.
For some sellers, winning the Amazon Buy Box might feel like a race to the bottom: the aim of the game being to undercut their competitors. Sadly, this one-track focus often ends up eroding sellers’ profits, which ultimately leads to businesses closing.
When setting your price points, it’s important not to lose sight of the forest for the trees—that is, don’t lose focus of your real goal, which is to increase your profit. Sometimes, lowering the price is the way to accomplish that—and sometimes it’s not. As your business grows in size and complexity of needs, it will behoove you to examine how to apply the following insights to your Amazon business model.
Insight 1: Protect your profit with an algorithmic repricer
Protecting your profit means paying close attention to two essential elements: the way your ASINs work, and making sure you’re not leaving money on the table.
Your price strategy needs to include a price range—a floor and ceiling price that reflects your profit-making goals. An algorithmic repricer will be able to determine the sweet spot that will allow you to price as high as manageable without losing your share of the Buy Box, or your potential customers.
Another advantage to using an algorithmic repricer is that it won’t entangle you in a price war. That’s because unlike rule-based repricers, algorithmic software takes more variables into account than merely your competitors’ prices.
Insight 2: Excel in customer service
Exceeding expectations in customer service should be a priority for every seller. Together with optimized prices, seller performance has a very high impact on winning the Buy Box.
Stay on top of your metrics by regularly checking up on your Performance Checklist on Amazon Seller Central. This feature allows you to quickly identify any problem areas that could be holding you back from Buy Box success.
Remember: every metric counts towards the Buy Box. And Amazon upholds a minimum standard for all metrics that you never want to dip below. But if you notice more than one problem area, focus your initial efforts on getting up to snuff with the high-impact metrics. Maintaining a high Perfect Order Percentage (POP) score–which takes into account multiple variables including cancellation and late shipment–is key.
The bottom line is, if you keep your customers happy and price right, Amazon will reward you with a greater share of the Buy Box. And once you see tangible improvements in your customer service performance, you won’t necessarily have to price so low to win the Buy Box.
Insight 3: Understand How Competing With Amazon Works
Most sellers are intimidated when it comes to competing with Amazon for the Buy Box, and that’s understandable. It’s no secret that Amazon has perfected its customer service and shipping process. While it’s unlikely you’ll ever completely dethrone Amazon from the Buy Box, it’s very possible to share the space with them.
You’ll increase your chances of this happening by using FBA or Seller-Fulfilled Prime, which inevitably boosts your credibility and seller performance. In cases where Amazon uses drop shipping to fulfill products, you will have the advantage by using FBA or Seller-Fulfilled Prime.
Insight 4: Stay in stock
It sounds obvious, but you can’t win the Buy Box unless you have actual physical stock of an ASIN that’s ready to be shipped to the customer. If you don’t, Amazon will simply rotate your share of the Buy Box to another seller. You will need to have an in-stock strategy that will allow you to maintain enough inventory for the next 30-60 days–Amazon’s expected timeframe.
You’ll need to anticipate periods of high demand, including the holiday shopping rush and even the surge of sales that (happily) comes with winning a larger share of the Buy Box. Inventory depth and sales volume has a relatively low impact on winning the Buy Box, but you can’t sell that which you don’t have. So stay ahead of the game through good inventory planning practices.
As you can see, there is no magic potion that will guarantee the Buy Box. There is also no way of “beating” or “outsmarting” the Buy Box. You simply must understand which variables Amazon prioritizes, and then adjust your strategy accordingly.
This article is a guest post by Feedvisor , the creators of the Buy Box Bible the pioneer of Algo-Commerce – the discipline of using Big Data and Machine Learning Algorithms to make business-critical decisions for online retailers. Feedvisor’s cloud-based Algorithmic Repricing and Revenue Intelligence solutions power millions of pricing decisions daily; providing retailers with actionable insights to maximize profitability and drive their business growth.