Tuesday, August 23, 2016

Turnover Tuesdays - The Buy Box

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

The previous posts in the series can be found at the bottom of this post.

The Buy Box

What is the Buy Box?  The Buy Box is the main page for any particular item on Amazon that features only one seller with the current price.

Here is a picture:

The Buy Box is Really Important

The Amazon Buy Box is probably the single most important factor in making sales on Amazon.  You will commonly see on various websites that 82% of sales on Amazon go directly through the Buy Box.  I couldn't find extremely reputable sources that give out this research but the percentage is definitely high, but knowing the factors that go into whether you may may "win" the Buy Box can really affect your sales and increase your profit on those sales.

Factors for Winning the Buy Box

Unfortunately, Amazon has a complicated algorithm that determines who wins the Buy Box and they don't publicize how that works, but they do publicize the factors that go into it and they worth looking at.  


If you are interested in winning the Buy Box, your price needs to be competitive, but that is certainly not the only factor and you don't need to be the cheapest to win the Buy Box.

Professional Sellers Only 

This is the Amazon ransom for the Buy Box.  In order to win the Buy Box, or at least to have a much better chance of winning when you are competing against professional sellers, you need to have a professional account.

A professional account costs $39.99 a month, but it comes with some benefits that can easily pay for itself.  If you do not have a professional account you will pay an extra $1 per item fee to Amazon that you sell.  If you sell more than 40 items a month, becoming a professional seller is a no brainer.  In addition, you cannot become ungated in gated categories like Health and Personal Care, Groceries or Beauty.  

Even if you are not selling 40 units a month, you may want to consider a professionals account to make it more likely for you to win the buy box.

Shipping Speed - Prime Eligible and other

Shipping speed makes a major difference in whether you will win the Buy Box.  If your listing is Prime eligible (FBA or merchant fulfilled prime), you can reliably price much higher than a seller who is not prime eligible. If you ever see an FBA seller undercutting an FBM seller by $0.01 on a listing that has a reasonable rank, they are throwing away 10% of their profits or more unless they are trying to avoid Long Term Storage Fees.

I don't know the exact percentage as Amazon doesn't publish this information but play around with your prices see if you still keep the box when you are 10%, 11%, 12% higher than FBM.

Customers expect items to be delivered fast from Amazon and sometimes they don't realize when something isn't prime eligible and are upset a few days later when it hasn't come yet.  That's one of the reasons Amazon favors Prime eligible sellers.

For the same reason, if you are backordered (your inventory hit the first Amazon Fulfillment Center but they are transferring it to another FC) you won't win the buy box unless you are significantly lower than other sellers.

Another unconfirmed theory is that where your inventory is located (which FC) relative to the buyer makes a difference as well.  Two customers can go to the same product and see two different sellers in the buy box.  I have seen this on many occasions but I cannot be positive the reason for it.


Reviews matter.  You want a lot of reviews and to be at 100% on your reviews.  I use Feedback Genius.  They will send 100 emails a month for free to customers asking for reviews after purchases.  I started paying $9.99 a month for it but I didn't think the added features were very worthwhile so I went back to the free version,

I also actively monitor my feedback and try to have any feedback below 4 stars removed.  4 star review do not affect your percentage of positive rating, 3 stars and below do.

Time and Experience Selling

Self explanatory but nothing you can do to change this besides selling more.

Customer Service Issues

If you have a high order defect rate or A-to-Z claims against you (FBM), that will affect your ability to win the Buy Box.

Random Factors to Keep in Mind

Does Amazon Give Up the Buy Box?

I've had listings where the rank is 7,000 in office supplies and I will sell 1-3 a day even though Amazon is in stock because randomly I will win the buy box even though I am priced $1 higher than Amazon.  I've also had a listing where the rank has been 3,000 in Home and Kitchen and I know it sells better than 7,000 in office supplies but I will sell 1-4 a month because Amazon won't give up the buy box at all.

You Don't Need to be the Cheapest within FBA 

Some people think that they need to be the cheapest FBA seller in order to win the Buy Box.  It's not true.  The Buy Box is shared among sellers based on all the factors that we discussed.  If you are cheaper by $0.01 you will likely not get a larger share of the buy box since it isn't a significant difference.  You will, however, encourage the seller to undercut you back.  If you match the Buy Box you are just as likely to share your time in the Buy Box.

Suppressed Buy Box

All this is true when there is a Buy Box but in the last 6 months or so there was a change that many noticed (hard to know if there was truly a change but it certainly seemed like it) where Amazon decided to remove the buy box altogether.  Instead of one seller, you won't see any sellers and you won't see a price either.

Here is what that looks like:

In order to buy from that product, customers need to click on the link to all available sellers.  Many times this has happened even when prices haven't changed, the buy box just disappears for no obvious reason.

A few things happen:

One is that the products don't sell as well.  If your listing loses the Buy Box you will probably see the rank collapse.  I am thinking of one particular listing where the rank went from 5k kitchen for a year to 30k in a couple of months despite the price decreasing by over 20%.  People are lazy and don't want to click other links.  When the rank collapses, the Amazon search algorithm is less likely to show your listing high up on the searches so the rank goes down further.

You will also see that FBA sellers are not likely to command much of a premium over FBM sellers.  When given the choice people are far more likely to chose based on price without giving Prime as much of a premium as Amazon gives Prime.  Being backordered is also less of a big deal when there is no Buy Box.

Losing a few buy boxes despite no price increases has made me more weary of "going big or going home."  You might have sold 15 a day in the past so you bought 100.  If the buy box goes away you may only start selling 1 or 2 a day and all of sudden you are paying massive storage fees.

I don't buy as much at any one time and I only repurchase when I'm very close to out of stock.  .  IN addition, if I feel the need to buy more than usual (a sale that isn't likely to repeat itself), I will leave some in my basement until more sell.  I may miss some sales this way but I am far less likely to pay storage fees