As the customer-centric company, Amazon’s goal have always been to offer the best possible end-to-end experience for their customers.
The Amazon Buy Box was created with the objective of comparing multiple offerings of the same product in order to determine which will give the customer the highest level of satisfaction and showcase Amazon’s commitment to operational excellence, says new report by Feedvisor.
The Amazon Buy Box winner functions on an algorithm targeted at giving the customer the best possible value for their money. When determining which product offering will win the Buy Box, the algorithm considers which of the competing offerings meets all of the necessary minimum requirements. It then breaks down each eligible offering into many different variables and evaluates each one relative to the other sellers offering the same product.
How does Amazon Buy Box works?
When a shopper lands on a product detail page, Amazon choose one seller whose details appear in the Buy Box — the white box on the right-hand side of the page. When a customer clicks on the “Add to Cart” button, the sale goes to the seller in this box.
This brand, retailer or merchant, commonly known as the Buy Box “winner,” will make far more sales than any other merchant for that product. More than 80% of Amazon’s ecommerce sales take place through the Buy Box, and this percentage greatly increases with Amazon mobile sales. It is vital for brands to understand how Amazon determines who acquires the desired Buy Box position, as it has the capacity to greatly impact profitability.
Nuances of Amazon Buy Box model
Amazon’s Buy Box algorithm treats Amazon as a seller with perfect customer experience metrics. That is, if a merchant has near-perfect customer metrics or a very low landed price, that seller will often share the Buy Box with Amazon, or even beat it if the price is low enough.
Buy Box Suppression
There are two instances that cause no seller to win the Buy Box, known as Buy Box suppression. In these cases, the Buy Box will show a ‘See All Buying Options’ button, and the buyer will be taken to the Offer Listing page, also known as the ‘More Buying Choices’ page, which lists all merchants who sell the product in order of landed price only.
The two instances are listed below:
When no seller meets the requirements to win the Buy Box or sellers that do meet the requirements have substandard seller metrics.
When the sellers’ prices are deemed unreasonable because they are higher than the list price. The list price is the full retail price — suggested by the manufacturer or supplier, or estimated according to standard industry practice — found below the product name on the product detail page.
Typically, Amazon suppress listings so it no longer shows up in search, to reduce sales until costs go down, or to protect consumers from paying more than the manufacturer’s suggested retail price (MSRP). In most cases, resellers can slightly exceed the MSRP if there are no competing retailers, but not by much.
3 Responses
I always thought it was 99% price and fulfilment method.
99/100 if price is the same then it will be based on fulfilment method (FBA vs SFP vs FBM).
99/100 if fulfilment method is the same i.e. FBA then it will be based on price.
This is just my opinion based on my experience, maybe more high volume sellers who sell more competitive items have more info!
A couple of years back at the eCommerce Expo I was speaking to a company who did repricing and they said price was pretty much the main factor. They gave me a tip and said you should always price match, not undercut – by all accounts this is where sellers go wrong as they end up driving down which means that other contribution factors are not considered. If you are all matching then you get a stable price with fair buy box rotation.
Many items if not most do not have a RRP and some of the RRP prices on products are wrong, even though I pointed out the error on some 18months ago. I get automated updates each week telling me it is still being investigated. And people moan about eBay CS.
I use a repricing tool that adjusts prices to +/- 20% of the RRP that I imput into my system and have always undercut by £0.10p
Following what crackerjack said above I have adjusted my price to match the lowest price and will monitor the results over the w/end.
Amazon are always trying to drive the price down so not sure why they would not see a price war as being good for them.