In 2017, $142 billion of Amazon’s sales went directly through the Buy Box, and nearly half of that amount went back into the pockets of third-party sellers. With facts like these, it’s clear that the Buy Box is, and will continue to be, the single largest revenue-generating opportunity for online marketplace sellers.
However, selling on Amazon is also becoming increasingly complicated. It’s never wise to completely ignore any metric that impacts the Buy Box, since an extremely low score in any one area will always negatively affect a seller’s Buy Box share. However, once sellers master what Amazon considers to be the most the most important metrics, they can focus on the lesser known, customer-centric nuances driving its elusive algorithms.
Sellers might be surprised to learn that there are a lot more factors that determine the Buy Box winner besides price point. To win the Buy Box more often and sustain greater profitability, sellers should adopt proactive, holistic e-commerce strategies that consider how factors like inventory, shipping, returns, and pricing will affect one another in both the short- and long-term. Most importantly, sellers should maintain a customer-first strategy to establish an engaging buying process and encourage repeat purchases.
Here are four lesser known variables that impact Buy Box share, and what you can do to effectively navigate them:
Customer Response Time
While initially believed to have little effect, this metric now plays a big role in Buy Box outcomes and encourages communication, transparency, and overall better customer service from third-party sellers. Based on brackets for reply times within 12 hours, 24 hours, and beyond, Amazon checks the average customer response time for the last seven, 30, and 90 days, and then compares these times to competing sellers. If a seller replies to more than 10 percent of messages after 24 hours, chances to win the Buy Box significantly decrease. To improve this metric, set an internal goal to reply to all customer messages within 12 to 24 hours, and pre-draft standard language to use for quick replies.
Cancellation and Refund Rate
Cancellation and refund rates are the number of orders canceled by the seller pre-
fulfillment, and the number of orders refunded to the customer post-fulfillment. While a positive score does not have a strong impact on the Buy Box share, a pre-fulfillment cancellation rate greater than 2.5% will have a strong negative effect because canceled orders and refunds can demonstrate a larger trend of customer dissatisfaction. Double check inventory for backordered or out-of-stock products and shipping fulfillment processes so that customers get the products they want through an easy, stress-free experience.
Amazon prefers to give the Buy Box to high-volume sellers who have enough inventory to deal with the increased demand and customer service volume that winning the Buy Box often creates. For those reasons, sellers with a larger inventory, consistent sales, positive customer reviews, and a strong stock history may be granted a greater Buy Box share. If you’re new to Amazon or are having a hard time winning the Buy Box, consider analyzing inventory trends and increase stock behind one of your most popular products.
Similar to the idea of high-volume inventories, Amazon favors sellers who have available stock of the items a customer is looking for. Typically, if the item is not in stock, the seller cannot win the Buy Box, so it is crucial that inventory best planning practices are followed to keep popular products in stock. The only exception to this rule is backordered items, which can be listed as “backordered,” with a note that is visible in the product page. However, items that are immediately fulfillable will always be favorered.
Beyond these hidden variables, there are several other factors that impact the Buy Box share and many others that could have an impact in the near future. While there is no one-size-fits-all solution to winning this real estate, sellers can devote time to studying their store’s metrics and trends over time, and translate that data into plans of action. With a comprehensive understanding of how your store stacks up against Amazon’s algorithm, you’ll be able to make quick adjustments that could result in big wins.
Victor Rosenman is CEO of Feedvisor