If there is one thing that sellers on Amazon should want is to win the Buy Box. In fact, winning this white box on the top right side of the product pages is so powerful that it literally determines the sales performance of a product on Amazon. So, what should a brand be focusing on in order to win it? There are multiple variables that are taken into account by the Amazon’s Buy Box algorithm but some of them have a higher impact.
Before jumping into these variables, let’s first see what are the necessary criteria in order to be eligible for the Buy Box.
- You must have a Professional Seller Account.
- Your order defect rate (ODR) must be lower than 1%.
- Your pre-fulfillment cancel rate must be below 2.5%.
- The late shipment rate must be under 4%.
- The products you sell must be new (no second-hand) and in stock.
Your Amazon Seller Central account is the place to check whether you are currently eligible or not.
Once you have met all of the above criteria, you can start competing with the rest of the sellers in your category. One could hardly keep under control the entire set of elements taken into account by the Amazon Buy Box algorithm so we have prepared for you an overview of what matters most to increase your Buy Box share over time.
1. Rely on a smooth and timely fulfillment method.
The fulfillment method is probably one of the most important elements to take into account when looking to win the Buy Box. Although any fulfillment method is accepted, those that opt for FBA (Fulfillment by Amazon) or SFP (Seller-Fulfilled Prime) generally have a higher chance of winning the Buy Box. This is because Amazon is already storing, handling and delivering millions of products so it is much easier for them to handle all of the required steps and have back up plans should something go wrong along the way.
2. Your landed price should be affordable and endurable.
Although price has a big impact on winning the Buy Box, it is just one part. For this reason, sellers should pay attention to the price at which they are selling their products so they do not end up in a vicious circle in which their business on Amazon could die. The lower the price the lower the margin so it could soon become unprofitable to sell on Amazon. Remember that the landed price also includes shipping costs. You should then offer a competitive price that includes shipment and that can last over time. Monitoring competitors’ pricing strategies is key to adapt on time and do not lose potential sales on Amazon. A few numbers to always keep in mind when determining the right price for your products are the Amazon fees, your margins, shipping costs and the cost of returning an order.
3. Excel in your shipping times.
The sooner your customers receive their orders, the better off you are not only in terms of customer satisfaction but also in terms of Buy Box wins. Needless to say that, with Amazon Prime, customers expect their orders to arrive fast.
4. Aim high for your seller’s customer service standards.
Customer service standards are a set of metrics that heavily impact the Buy Box share. Below are the most important indicators on which you should focus.
Order Defect Rate (ODR): the number of times an order has a defect over the total number of orders. An order is considered defective if one of the three situations applies:
- A buyer leaves a negative feedback.
- An A-to-Z guarantee claim is registered by the buyer.
- A chargeback is claimed (credit card charges disputed by the buyer) due to fraudulent charges (in this case the sellers are protected by Amazon) or to service complaints (e.g. order not received, order returned but no refund received).
ODR should be kept under 1%.
Return Dissatisfaction Rate (RDR): the customer satisfaction related to the return experience. This indicator is negatively impacted by:
- Return requests incorrectly denied.
- Return requests responded in more than 48 hours.
- Return requests that have negative buyer feedback.
RDR should be kept under 10%.
Seller-Buyer Contact metric: the amount of time a seller takes to get back to customers. Response times under 24 hours should represent more than 90% of orders.
Valid Tracking Rate (VTR): the number of orders that can be tracked. This metric is key to find out where orders are and when customers can expect to receive them. At least 95% of shipments should have valid tracking numbers.
5. Monitor seller feedback.
The Seller feedback rating is an average of all of the ratings received on orders generated during the last 365 days and gives more weight to the orders of the last 90 days. Often, Amazon Seller ratings are confused with Product ratings so it is important for a seller to keep an eye on Seller ratings and contact Amazon whenever a negative product rating is provided in place of a seller rating. The same thing can be done for negative Amazon reviews related to packaging or delivery of an FBA product since, in this case, Amazon is responsible for the correct handling and delivery of the product. Monitoring seller feedback is then key to avoid being negatively impacted by mistake.
6. Be good at forecasting and managing your Amazon inventory.
Without inventory you cannot sell and so you will not be eligible for the Buy Box. Amazon’s primary goal is to ensure customer satisfaction and, for this reason, Amazon inventory management is an important criteria considered by its Buy Box algorithm. If a customer buys a product and the order needs to be cancelled because the product is out of stock, not only the seller will probably receive a negative review, but also the chances of winning the Buy Box will go down. Always make sure to have enough units in stock to satisfy the demand, especially for best-seller products.
Focusing on the Buy Box will definitely help increase your sales on Amazon. In terms of what to act on, it is important to keep in mind that working on a single metric (e.g. price) could help you in the short-term but will not work in the long-term. It is key to find the right balance of different metrics that is profitable for your business on Amazon. At Gradient we have worked hard to make our clients succeed at winning the Buy Box. Not only have we developed a platform that helps keep track of the most important Buy Box influencers, but also we have provided users with a system of alerts to be notified whenever something requires their attention (e.g. significant drop in inventory, price change). Create your free Gradient account today to monitor what matters most and increase your Buy Box share!