Selling on Amazon Part 1: Winning the Buy Box
So you’ve decided to hock your wares on Amazon.com? Amazon can be a great sales channel for retailers of many types of products, because they have BIG visibility, loyal customers with a perception of security behind the site, and a well-defined technical platform to support third-party retailers. However, there are several things that you need to learn and absorb if you are going to sell on Amazon. This post is the first in a series about selling on Amazon.
One of the most important things you need to do as a third-party retailer on Amazon is referred to as “winning the buy box”. To understand this concept, let me back up and explain how products are sold on Amazon. Let’s say we have a product such as the Human Body Floor Puzzle (shown below) that is sold by a number of different retailers, and possibly also by Amazon themselves. Instead of having an individual product page for the same item for each retailer, Amazon combines them into a single product page .
When a customer visits a product page, the most obvious thing about making the purchase is the “buy box” on the right side of the page near the top. It features a quantity dropdown box and an “Add to Shopping Cart” button. Most customers who wish to purchase the product will make that simplest selection. When they do, the sale is given to the retailer who is currently “winning the buy box” – in the case of this example product, that retailer is The Clanton Company (as seen in the middle of the screen under the green “In Stock” status).
So how do you win the buy box? According to Amazon:
Customers can add products into the shopping cart through multiple paths. One of those paths is by using the Add to Shopping Cart button (in the “Ready to Buy” box, or the “Buy Box”). One merchant “wins” the Buy Box. There are multiple factors that we take into account when we select the winner of the Buy box these can include Price, Availability, Volume, Refunds, Customer Feedback and A-to-Z guarantee claims. You can take steps to increase your chances of winning the Buy Box.
In most cases, it appears that the buy box for a particular product rotates among different vendors who currently have the item in-stock, so unless you’re the only one selling the item, you’re shooting for a win “percentage” – the number of times you win the box divided by the number of pageviews for this product.
There are some key things you can do as a retailer to increase the percentage of times you win the buy box:
- Focus on your pricing. The ability to win the buy box is based on the combination of the product price and the shipping price. Simply lowering your price for the product and raising shipping costs to cover the difference won’t help you win the box.
- Make sure you keep the item in stock! If you are out of stock, you can’t win the buy box.
- Maintain good customer feedback. This is mainly your basic customer service considerations. Ship quickly, keep your customer informed of the status, make sure you ship the correct item, and don’t accidentally list a product as in-stock if it’s not.
That’s basically it. Certain categories have lots of retailers, so if that’s the case, you may need to keep an eye on your competition daily. When you manage your inventory and look at listings, you can see the lowest price being offered by your competition. Amazon also provides tips on encouraging feedback. With practice and diligence you can increase your percentage of buy-box wins.
Watch for our next installment when we discuss different ways to listing your products on Amazon.