The Brass Ring: The Amazon Buy Box

“Give it to me straight,” you might be saying. “What exactly do I have to do?”

Formula: You’ve got to be the featured seller who wins the Buy Box each time.

How: Use the Amazon FBA method.

Background: Like many Americans, I believe in lending a hand when we can and teaching others what we’ve learned through fortuitous ingenuity or out-of-the-ordinary God-given talents. I have been gifted with a good mind for this sort of observation and analysis. The surprising breakthroughs I experienced in the field of finance were a result of a combination of my fervent interest in the field, painstaking research and good-old-fashioned perseverance. I refused to put an idea down until I’d tried first to disprove every angle. I had to find the weak links and make sure they wouldn’t crack under pressure. This led to insights I may not have had otherwise. It was a thrill to be able to figure out how to not only meet my material needs and provide for loved ones, but to be able to put into words what seemed at first too ephemeral to describe. I’m happy to have learned what I did in this one particular classroom in the school of life. It’s a boon to be able to teach others in turn.

Let me tell you about my first stream. But first, we’ll layout out a few necessary concepts:

  1. Buyers and Sellers, of What?
  2. So Who Becomes Top Dog? How Do I Qualify For a Buy Box?
  3. The Formula for Winning The Buy Box

And here’s a heads up that’ll have you breathing a sigh of relief: With products that are fulfilled by Amazon (FBA) you won’t have to worry about several of these seller tasks, as it’s a done deal with FBA.

Buyers and Sellers, of What?

If you’re an avid Amazon “watcher”, or if you jump into the ring yourself once in a while, it may come as no surprise that those sellers who always seem to take home the best deals have developed some sort of pricing strategy. Before we proceed, let’s take a moment to ensure that you know exactly what online marketing is. It’s an online platform that brings together goods or services and their corresponding buyers and sellers. “Hmm, services,” you’re thinking. “I know about products, but surely you don’t mean services like job provisions or apartment rentals. Are these traded online, too?”

Yes, they absolutely are! We’ll go into all those services when we tackle my other income streams. For now, let’s stay with Amazon—and the venue where you will most see a fascinating philosophy played out—one that the renowned Pareto’s uncanny observation may be applied quite nicely to0. It all comes down to numbers—the law of averages, if you will. Stay with me, now. Success online is inevitable—if you can arrive at a successful price strategy and become the winner of the Buy Box. Chew on this for a minute: It is usually 20% of the sellers who are taking home 80% of the marketplace profits. Who’s to say you can’t be one of those 20%?

So Who Becomes Top Dog? How Do I Qualify For a Buy Box?

Good question. Now let me ask you one. Did you know there is no limit to how many of one single product can be sold on Amazon? That makes for a bevy of offers. (Talk about comparison shopping!) In fact, the many merchants vying for a buyer often compete with Amazon itself! How’s that for online intrigue?

amazon-buy-boxBefore we jump into Amazon’s novel (and all-important) FBA concept, you need to know the basics about selling, Amazon’s way. The Buy Box was developed by Amazon as a way to ensure that the purchase is awarded to the “deserving” winner.

Where does it appear? If you were to win the Buy Box, it would appear on your product’s Detail or Product Pages, which are constructed to make the entire shopping experience a good one—pleasant and convenient—for the shopper. (Go to Amazon’s help page, here, for a picture of a Detail Page)

Now let’s touch on a few all-important pieces of the Buy Box puzzle:

  1. Product Pages – These online pages are where you list your products and where the Add To Cart link can be accessed. They were designed so the consumer/buyer can figure out at a glance what they’re getting. Each page includes a photo, description and if needed, technical information. You, as a seller, are creating a product detail page to list your wares with as much consumer-relevant information as you can c muster. Hopefully, this will entice the consumer to buy.
  2. Ownership of the Buy Box – Keep in mind that Buy Box ownership is constantly being updated. You can’t rest on your laurels if you DO own the Buy Box for a product page.
  3. Who Decides – “Just so I’m clear,” you’re saying, “Amazon makes the decision of who owns the Buy Box, right?” You’ve got it. And as you may have figured out, since Amazon is in the business of retaining customers, they’re going to carefully weigh who, based on price, availability, seller ratings and a few other proprietary factors, will be designated THE top-notch “winning” seller. (Stay with me; in a little while, we’ll be discussing how that can be YOU.)
  4. New or Used Winning Category? – OK, so let’s jump ahead of ourselves, to help you visualize this a bit. Let’s say you win the Buy Box. If your winning product is in the New category, it appears first on the Add to Cart button. The customer, if s/he wishes, may also view the winning Used offer, which appears somewhat lower, position-wise. (As an interesting side-note, Amazon creates a master product page, so buyers can check out all the listings which have won the Buy Box.)

At what point do I need to start switching to FBA?, you’re probably wondering. Here’s my answer: use FBA if you’ve spotted that the product you’re selling has popped up in other offers! Yep, at that point, you’ve got to up the ante.

The Formula for Winning The Amazon Buy Box

Take notes! My research and hands-on training have shown you can win the Amazon Buy Box every time if you:

  • Focus on The Landing Price — This is the total item price (including shipping). Pricing is crucial! It’s one of Amazon’s major draws. Amazon encourages merchants to compete for that Buy Box… and what better variable than pricing? (Again, keep in mind that Amazon computes the price to include shipping.) It won’t surprise you to know that Amazon sellers are constantly tweaking product prices to edge one another out of the Buy Box.
  • Choose Your Products Wisely — To determine what products you want on your Buy Box wish list, check out the Buy Box winning prices, and the products/categories that “win”. Here’s how: On the Manage Inventory page, click the Preferences button, and then select Show–when it’s available for the current Buy Box winning price. (These will be displayed for New listings only.) Are you looking at something within your projected (desired) price range for the customer? If so, keep tabs on what the products are.
  • Lock in a Super-Satisfactory Fulfillment method — Amazin’ Amazon knows that many merchants want to package, ship, sort and send Amazon purchases on their own, using their own fulfillment headquarters or fulfillment providers of their choice. Yet a third popular choice that sellers can choose for some or all of their items is Fulfillment by Amazon (FBA). Many sellers who are looking to win the Buy Box choose to use Fulfillment by Amazon (FBA)—a paid option for sellers who take advantage of Amazon’s expertise with sorting, packaging, and shipping out of their 13 warehouses. So if your margins, product category, and other seller variables jibe, FBA lessens shipping time and cuts your fulfillment costs. Another GOOD thing is that Amazon is more likely to highlight its own products and services. And what seller in cahoots with Amazon wouldn’t want that? A recent study revealed that FBA actually increased sales by more than 20% for 73% of Amazon sellers that used this program. (This topic is covered in greater detail in Chapter 3).
  • Availability — It comes as no surprise that Amazon WANTS shoppers to find exactly what they’re looking for, when they’re looking for it. So guess what happens if your item is out of stock? Amazon will get it from another seller. Take steps to ensure this doesn’t happen. For merchants using Fulfillment by Amazon (FBA), of course, you’ve got no worries there! Availability is determined not by which products are in your warehouse, or which might or might not be shipped to Amazon. Rather, they’re determined by which products are in Amazon’s warehouses—and remember that Amazon has 13 warehouses! It’s fair to say you’ve got to stay on top of fulfillment processing and delivery time when sending products to Amazon—and that utilizing FBA is in your favor.
  • Polish Your Seller Rating — How is seller rating tracked? Simple. It’s based on seller performance, including feedback, shipping performance, and customer response rate. You’re starting to see why reliable sellers are viewed by Amazon as a better option for consumers. Amazon’s pretty aggressive when it comes to going after, or removing, sellers who don’t perform. That’s what the Amazon’s performance targets for sellers are about. In essence, Amazon gives sellers a thumbs up when they demonstrate the following:
    • Less than a 1% Order Defect Rate;
    • Less than a 2.5% Pre-Fulfillment Cancel Rate; and a
    • Less than a 4% Late Shipment Rate.

Amazon’s strict fulfillment standards also impact price competitiveness, as quicker shipping often costs more, and can increase the total cost of the items sold on Amazon. So stay on top of your game!

Let’s Delve Into Feedback Score 

Amazon’s carefully designed Feedback Rating is constantly updated based on aggregate reviews from Amazon orders. The Feedback Rating is comprised of orders from the preceding 365 days but the real laser focus is on orders from the last 90 days. Here is a look at how the formula breaks down:

  • Order Defect Rate (ODR): Sellers must have an ODR of less than one percent.
  • General Customer Service: Sellers should offer reasonable prices, convenient shipping options, and speedy shipping.
  • Stock/Inventory: Simply stated, if you have no current stock, you cannot win the Buy Box. Use inventory planning best practices to keep your popular products in stock. Customers who submit orders for products that are not in stock are likely to leave negative feedback. This is especially the case around the holidays when expectations (and frustrations) flare.
  • Pricing: The importance of this variable cannot be overemphasized. You want to price your products competitively. Customers trust that they will find low prices on Amazon.com. Watch your competition to stay competitive. With the valuable repricer app, you can stay on top of the price of the offer that is currently winning the Buy Box.

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