With more than 40 percent of online sales happening on Amazon, the ecommerce website is essential to online retailers. Your success on Amazon, however, depends on winning the Amazon Buy Box — and to do that, you need to understand the Amazon Buy Box algorithm.
Ready to learn all about the Amazon Buy Box formula? Keep reading!
What is the Amazon Buy Box?
The Amazon Buy Box refers to a white box that appears on the right side of a product detail page. Shoppers use the Buy Box to add products to their cart or to use one-click ordering. The seller that wins the Buy Box is the default choice when a user clicks, “Add to Cart,” or, “Buy Now.”
As the default choice for shoppers, the Amazon Buy Box accounts for almost 85 percent of sales on Amazon. Meaning, less than 20 percent of sales go to sellers outside of the Buy Box — these sellers appear below the Buy Box.
That is why the Amazon Buy Box offers immense value to online retailers. If you win the Buy Box, you can expect to earn more sales as most shoppers choose to purchase from the seller in the Buy Box, versus comparing all the available sellers.
Due to the value of the Amazon Buy Box, however, it comes with a lot of competition.
Why is there an Amazon Buy Box formula, anyway?
Amazon operates like a search engine, such as Google. Like Google, it wants to provide users with relevant results. If users searched for, “orthopedic dog bed,” and Amazon returned a list of cat beds, people wouldn’t use Amazon.
The same concept applies to the Amazon Buy Box. If Amazon allowed any seller to have the Buy Box — or even offered it as a paid advertising option — it would risk delivering poor results — and negative customer experiences.
By developing a formula for the Buy Box, Amazon ensures that only vetted and trusted sellers with reasonable prices win the Buy Box. The result? A positive experience for consumers, which encourages them to shop at Amazon again.
How does the Amazon Buy Box algorithm work?
For businesses new to Amazon — or established companies now optimizing their stores — it’s essential to learn how the Amazon Buy Box algorithm works. By understanding how the formula operates, you can start winning Buy Boxes and driving more sales.
The Buy Box formula depends on these seven factors:
Amazon built its Buy Box algorithm on eligibility requirements, which include:
- Professional Seller: The Buy Box is exclusive to Professional Sellers. These are businesses that sell more than 40 items per month and subscribe to Amazon’s Professional Seller service, which provides subscribers with additional features, like customizable shipping rates.
- New product: Amazon also eliminates used products from the Buy Box. If you want to win the Buy Box, you must sell a new product. This eligibility requirement helps ensure that shoppers receive undamaged, high-quality products.
- Strong performance metrics: These metrics focus on your customer service. Amazon’s Buy Box formula looks at your order defect rate (ODR), late shipment rate, cancellation rate, and several other factors. In short, you need to provide shoppers with a user-friendly experience.
- In-stock product: If you want to win the Buy Box on Amazon, then you need to master inventory management. The Buy Box algorithm only allows in-stock products to win, so if your inventory hits zero, you become ineligible.
If you want to check your eligibility for the Buy Box, Amazon makes it easy. Just follow these steps:
- Log in to your Amazon Seller Central account
- Select the Inventory tab and then click Manage Inventory
- Click the Preferences tab and look for Buy Box Eligible in the Column Display section
- Choose Show When Available from the Buy Box Eligible dropdown
- Check the Buy Box Eligible column for your product SKU
Keep in mind that Amazon requires you to meet all its requirements for two to six months. If you use Fulfillment by Amazon (FBA), however, Amazon fast-tracks your eligibility — FBA can also encourage consumers to purchase from your business.
2. PRODUCT PRICE
Besides your eligibility, Amazon also considers the price of your product. If you want to win the Buy Box, you need to offer competitive pricing. It’s also critical that you look at the landing price of your product, which includes the cost of your product, shipping, tax, and handling.
If you offer a low price, but charge a high shipping rate, Amazon’s Buy Box algorithm will notice. That can result in your product losing the Buy Box, which can lead to a decrease in product sales and an increase in unsold inventory.
Depending on the strength of your performance metrics, you can price your products higher than your competitors. If a competitor has a high order return rate, for example, their low prices won’t secure the Buy Box. That allows your company to increase your prices and boost your revenue.
3. ORDER FULFILLMENT
One of the most influential factors in Amazon’s Buy Box formula is order fulfillment. Amazon considers its FBA service to have perfect performance metrics, which is why investing in FBA can increase your chance of winning the Buy Box.
That doesn’t mean you can’t win the Buy Box if you fulfill orders in-house. It only means that it’s more challenging to win the Buy Box, which can require more time and effort from your team or agency. If most of your company’s revenue is from Amazon, however, it makes sense to use FBA.
4. SHIPPING TIME
The algorithm for Amazon’s Buy Box also relies on your shipping times. Since Amazon needs to provide shoppers with the best experience possible, it wants them to purchase from sellers that are fast and reliable when it comes to processing and shipping orders.
If you want to maximize this factor’s impact on the Amazon Buy Box formula, you need to match your promised shipping times. For many online retailers, this factor is another reason to use Amazon’s FBA service — it ensures your orders ship fast and on-time.
5. ORDER DEFECT RATE
Amazon also monitors your short-term and long-term ODR — this timeframe encompasses the past four months. If you want to win the Buy Box, it’s critical that you maintain an ODR of less than one percent. Exceed that number, and it’ll become difficult to win your product’s Buy Box.
6. CUSTOMER FEEDBACK
Customer feedback is another influence on the Amazon Buy Box algorithm. This feedback includes positive, neutral, and negative responses from customers in the past 30, 90, and 365 days. For the best results, you want a customer feedback score of at least 90 percent.
Amazon also looks at how many reviews you have, relative to your selling history. If you have a longer selling history, for example, the Amazon Buy Box algorithm expects more reviews. That is why it’s critical to encourage reviews from your shoppers, such as through Amazon Vine.
Response time is another feature of customer feedback that Amazon’s Buy Box formula assesses. Amazon prefers that sellers answer shopper questions within 24 hours. If you reply outside that period — or don’t reply at all — it’ll lower your likelihood of winning the Buy Box.
7. IN-STOCK CONSISTENCY
If you want to win the Buy Box, then you need to keep your items in-stock. Amazon monitors your inventory on a routine basis. If your stock becomes low, it’ll decrease your chance of winning the Buy Box.
That is why inventory management is critical.
Amazon also checks your cancellation and refund rate. If you have a rate above 2.5 percent, it becomes difficult to win the Buy Box. Whether you manage your inventory in-house or through FBA, you should request routine updates on your inventory.
3 quick tips to win the Amazon Buy Box
Now that you know how the Amazon Buy Box algorithm works, are you ready to learn how to improve your chances of winning?
Here are three quick tips to get you started on winning your Amazon Buy Box:
- Personalize your interactions with shoppers: It’s critical that you prioritize your customer interactions. If you fail to respond to questions or feedback, you not only place your brand at risk but also your products — users won’t buy from businesses with bad reviews. That is why review management is essential to winning the Buy Box and succeeding on Amazon.
- Optimize your inventory management: Companies often overlook the role of inventory management in Amazon’s Buy Box formula. No matter how great your customer service is, if you mismanage your stock, you won’t win the Buy Box. Review your current inventory management practices and look for ways to improve, such as by using FBA.
- Automate your product pricing: Optimizing your prices against competitors is time-consuming. That is why it’s helpful to invest in software that monitors competitor pricing and adjusts yours automatically. A few software options include Sellics and Informed.co — Sellics even includes features for managing your inventory and reviews.
With these tips, you can start winning Buy Boxes across your entire product line-up.
Need an Amazon Buy Box algorithm expert?
Do you want to increase your sales on Amazon? Partner with WebFX, the industry’s trusted source for marketing and advertising on Amazon. Contact us online or give us a ring at 888-601-5359 to chat with one of our award-winning Amazon Buy Box algorithm experts.