There are different types of sellers on Amazon. Either Amazon sells a product, or third-party sellers sell their items or purchased merchandise. If several merchants sell the same product, the product will not appear twice or more times in the search. All merchants are on one listing, and there is a competition for the so-called Buy Box. The Buy Box decides which merchant an Amazon customer will buy from when they click on the orange "Add to Cart" or "Buy Now" button.
The goal of every Amazon merchant is to win the Buy Box. This article explains why a Buy Box placement is important and how you can improve your chances of winning.
What is the Amazon Buy Box?
On the product detail page of an ASIN, you will find a white box on the right side where customers can add the product to their shopping cart or make a direct purchase. This box represents the Buy Box.
The moment you go to the product detail page, Amazon has already determined the owner of the Buy Box.
The Buy Box contains all the essential information about the purchase: the price of the item, the delivery date, and the merchant. Looking closely, you will see "Sold by" and "Ships from" at the bottom of the desktop view. This means that a Seller sold and Amazon ships the product. Alternatively, it could say "Sold and shipped by Amazon" or "Sold and shipped by XYZ."
If you scroll down further on the product detail page, you will see a smaller box below the more prominent white box with more offers:
Here you can find a list of all other sellers who also offer the product:
As a customer, selecting another seller who offers the product with a few clicks is possible. However, most shoppers are unaware of this feature or rely on Amazon's default settings.
Amazon's goal is to ensure customer satisfaction. Thus, it is evident that Amazon prefers merchants that provide customer satisfaction by, for example, excellent customer service or a favorable price. To determine the preferred seller, Amazon works with an algorithm. Amazon picks the select seller for each product, enabling this seller to generate (more) sales via the Buy Box.
Why is winning the Buy Box so important?
The Buy Box is important for sellers and vendors as it increases or decreases sales. According to Amazon, around 90 percent of customers buy goods via this button. This means that you will sell much more if you are the owner of the Buy Box.
Customers can also find other merchants with one click, but it is unlikely that customers will do that. Most customers don't know that they are not buying directly from Amazon, or they trust Amazon to suggest the best option to you.
However, the Buy Box is not only essential for sales success when the customer is already on the product detail page. The Buy Box opens up profitable marketing channels for you, such as using Amazon PPC campaigns. Note that if you are running a Sponsored Brands campaign for a product and lose the Buy Box, you may end up advertising for another merchant who holds the Buy Box at that moment.
How does Amazon determine who gets the Buy Box?
To receive the Buy Box, Amazon has set some requirements:
- You have a professional seller account
- You have a sales history of at least 90 days
- You sell items in "New" condition
In addition, Amazon specifies the following factors for winning the Buy Box, which make winning the Buy Box more likely:
- Your price is competitive
- Your items are shipped via prime, and free shipping
- Your seller performance is exceptional
- You have sufficient inventory on hand
A key component in winning the buy box is setting the correct prices. On the one hand, prices must be high enough to generate profit, and on the other hand, prices must keep pace with, and ideally undercut, competitors' prices. The goal is to set a price that generates the highest possible profit through increased sales or a higher margin.
Since Amazon wants to generate as many sales as possible, the seller with the lowest price usually wins the Buy Box. However, the lowest price does not always win. A competitive price and excellent seller performance are the best prerequisites for winning the Buy Box.
Using a repricing tool can help sellers find a fair price. A repricing tool reacts immediately to market changes and continuously adjusts your prices to the competition. This allows you to stay competitive and increase your margins.
Prime and free shipping
To increase customer satisfaction, the order must reach the customer as quickly as possible. Shipping should take no longer than two days; the shorter the shipping time, the better. Thus, retailers who ship via Prime or use Amazon FBA win the Buy Box.
To guarantee fast delivery, the sales processes need to be optimized. The quicker processes such as packaging, merchandise management, or the compilation of items run, the more satisfied the customer will be, as the product will reach him faster.
Amazon offers the "Fulfillment by Amazon" (FBA) program to guarantee fast shipping. Amazon provides storage capacity and takes care of packaging, shipping, and customer service.
"Seller Fulfilled Prime" is a shipping program where the seller's goods are marked as a Prime offer. Amazon selects a merchant and provides them with Prime shipping labels. You can learn everything else about the shipping program here (opens new window).
The Amazon algorithm favors products with Prime status, but whether labeled as "Fulfillment by Amazon" or "Seller Fulfilled Prime" doesn't matter.
Exceptional seller performance
To win the Buy Box, it is essential that customers are satisfied with your seller's performance. Seller performance is made up of various metrics. You must meet the following metrics to win the Buy Box:
|Order Defect Rate (ODR)||< 1 %|
|Cancellation Rate (CR)||< 2.5 %|
|Late Dispatch Rate (LDR)||< 4 %|
|Valid Tracking Rate (VTR)||> 95 %|
|On-Time Delivery Rate (OTDR)||> 97 %|
|Invoice Defect Rate (IDR)||< 5 %|
To check your seller performance, click "Account Health" under "Performance" in Seller Central. You can see the relevant metrics and check which ones you need to improve. In Seller Central (opens new window), you will find explanations of the metrics and see how Amazon calculates them.
Example: You want to improve the rate of order defects. Negative reviews, A-to-Z guarantee claims, and credit card chargebacks affect the order defect rate. You optimize the metric by adding a checkpoint that verifies that every order leaves the warehouse in perfect condition. Also, open and courteous communication with customers is critical. Seek solutions to dissatisfied customers.
To win and keep the Buy Box, your product must always be in stock and available. Due to delivery issues, you are not meeting Amazon's requirements if your inventory is too low or you cannot complete a purchase in time.
Example: Your "cancellation rate" will increase if the sale is canceled due to low inventory. This not only lowers your buy box chances but also lowers your seller ratings. Ensure sufficient inventory to avoid out-of-stock situations.
It's essential always to keep an eye on your inventory levels to prevent a high cancellation rate. With our Amazon Seller Tool (opens new window) and Amazon Vendor Tool (opens new window) AMALYTIX, you can do this. In AMALYTIX, we show you various key figures about your stock. All key figures are aggregated over the different marketplaces. You can see the number of products currently in stock and automatically get a hint if you need to replenish items. Furthermore, AMALYTIX calculates a minimum and maximum stock range.
In rare cases, it happens that a vendor without stock has the buy box, although other sellers with stock sell the product. However, the sellers sell the product at higher prices than the vendor.
One possible reason is that Amazon has an idea of product price. So Amazon estimates how low a price should be. If the price is too high, according to Amazon's statements, Amazon withdraws the Buy Box from sellers, even if they only have the product in stock.
In another case, Amazon gives a discount on the seller's price. Amazon wants to be the cheapest provider. For this purpose, Amazon compares its prices with those of other stores, such as Saturn, Media Markt, etc. If Amazon sees a lower price on another site, Amazon reduces the price so that customers buy from them instead of from the competition. So far, Amazon has only done this with products they sell themselves. Amazon is now intervening with sellers as well. In doing so, Amazon takes the difference: a seller posts a product for 65 euros. Since Amazon wants to undercut another price, Amazon grants the customer a discount of 2 euros. The seller receives 65 euros in a sale, and the customer pays 63 euros.
Also, no one may have the Buy Box, although several sellers exist. In such a case, Amazon sanctions the sellers because of too high prices or low seller performance. Also, private label sellers can appear only in the inconspicuous white box if Amazon is dissatisfied with the seller's performance, for example. If the buy box is missing, as in such a case, the customer can only purchase a product via an additional click. If there is no Buy Box on the product detail page, this is also noticeable in the search. Customers are only shown the product title and image but no price or shipping time. Such a search result has a deterrent effect on customers, who may think that the product is unavailable.
Buy Box for Private Label and Third Party Sellers
Private Label means sellers sell their products under their brand on Amazon. So they are the brand owners and hold the patent. Private Label merchants automatically win the Buy Box because they are usually the only sellers of the products. As long as the products are not sold to third-party sellers, and all requirements are still met, there is little risk of losing the Buy Box. However, it is not guaranteed that Amazon will always award Private Label sellers the Buy Box. In the event of poor seller performance or a price increase, private label sellers can also lose the Buy Box.
The situation is different for third-party sellers. If several sellers offer the same product, there is tough competition for the Buy Box. The seller who wins the Buy Box gets the most sales and can promote his product.
Winning the Buy Box is hugely vital for sellers on Amazon. Amazon's algorithm decides which seller is linked to the "Add to Cart" or "Buy Now" button, but sellers can actively influence their chances of winning. The lowest possible but competitive price, fast and free shipping, outstanding seller performance, and sufficient stock are decisive for winning the shopping cart field.
Our Amazon tool (opens new window) helps you always to keep an eye on the Buy Box. We show you if you own the Buy Box or at what price the merchant in the Buy Box is selling the product (Buy Box price). We check if anything changes. If so, you will automatically receive a notice and thus keep the complete overview daily.