Buy Box Owner Analysis
“Add to Cart” or “Buy Now”-- two phrases that every Amazon shopper is familiar with. We expend substantial energy scrolling through the Search Engine Results Page (SERP) product options and assessing listing details. When we finally make our purchase decision, we mindlessly click either of these buttons in the "buy box." However, the Amazon buy box can make or break a brand on this platform.
What is the Buy Box?
The buy box is an area to the right of an Amazon product detail page that customers use to add products to their shopping cart or immediately make a purchase. For any particular product (ASIN), the “winner” of the buy box is the brand whose product is added to the cart or purchased in this process. The buy box winner is estimated to capture the sale roughly nine out of ten times. For products with multiple competing sellers, winning the buy box can be the difference between a sale and a missed opportunity. The majority of shoppers won’t take the time to evaluate all sellers for an ASIN; if Amazon has designated one seller the buy box, it’s probably the best choice anyway.
Winning the buy box isn't just important for organic sales. For brands with Sponsored Product ads, maintaining control of the buy box is the only way to keep these ads running. Even worse, with Headline Search Ads (HSAs), losing control of the buy box means that your ads will direct traffic to a product page where another seller is likely to capture the sale.
How Can You Win the Buy Box?
There can be only one winner of the buy box at a time. Just like Amazon’s A9 algorithm, the algorithm for this is a well-kept secret. However, it’s widely believed that ownership is determined by two factors: price and availability.
Amazon is focused on pleasing customers, and a major component of that is saving them money. The buy box owner will almost always have the lowest price. While prices shouldn't be so low that they become CRaP (Can't Realize a Profit), they need to be competitive. Establishing a Minimum Advertised Price (MAP) for each product is a great way to understand where prices need to be.
No online shopper wants to find a product they want, only to realize that it's unavailable. If your brand can’t keep the stock needed to meet demand, it can’t win the buy box. If you’re out of stock, buy box ownership will almost always transfer to another seller that isn’t.
One way that your brand can prevent stock outs is by becoming a hybrid seller. Opening an additional account on Seller Central to accompany Vendor Central will enable additional influence over pricing and will provide a back up solution in the event that the Amazon's vendor side runs out of inventory.
Ownership Across Categories
Examining the buy box ownership for the top 100 best selling products reveals distinct differences in each category. While certain products, such as technology and books, are largely owned by vendors on Amazon, others, like photos and crafts, are controlled by 3P sellers. There are a variety of reasons why buy box ownership distribution varies so greatly across categories. The most probable of these is the prominence of 3P sellers competing for the buy box in these categories.
FBA sellers may find that they don't have buy box ownership even though they have inventory if the sale price is higher than MSRP for that product. Another reason is if the price has increased substantially, even if it's still under MSRP. In order to encourage lower prices for customers, Amazon will suspend buy box ownership.
Just as ownership varies across categories, so does stock. The overwhelming majority of winning merchants will have stock in abundant supply. A small percentage of the time, the owner will be out of product, so the buy box will display product options available from other sellers. In certain categories, particularly those with a smaller number of competing sellers, unavailable stock from the buy box owner can be observed.
Using Pricebox to Monitor the Buy Box
Keeping track of each of your online listings can be a challenge. However, it's important that you're continually monitoring essential stock and pricing metrics. Pricebox simplifies monitoring buy box ownership, competitive sellers, MAP compliance, and more. All you need to do is upload ASINs into the tool for the products you wish to monitor.
Below we have listed a sample set of Electronics products. Pricebox continuously monitors each listing's buy box owner and its associated price and stock levels. It also tracks the number of competitive sellers to find the highest and lowest price listed for the product. As we mentioned previously, price and stock levels determine buy box ownership. Our price tracking tool makes monitoring these easy; in fact, it will even alert you when MAP is violated or stock levels are low.
Each product tracked by Pricebox can be looked at in more detail if desired. Below we have a sample of sellers for the iRobot Roomba from July 25 to July 31, 2019. Our plot displays the pricing of the top three sellers over the week. The buy box owner for each day tracked is listed with an X; in this case, it's Amazon every day.
Ensuring Continuing E-Commerce Success
While price and stock levels are the largest differentiating factors in determining ownership, there are certain other criteria that your brand should meet to ensure it is buy box eligible. These include your order defect rate, length of time selling on Amazon, and overall shopping experience. Whether you're trying to become eligible for the first time or maintain buy box ownership for your brand, focusing in on the needs of the customer is key. We've compiled a list of the most important components of your product listing to focus on.
- Understand factors that determine buy box eligibility
- Maintain sufficient stock
- Keep prices affordable
- Provide quality customer service
- Establish a Minimum Advertised Price (MAP) to prevent unauthorized sellers from undercutting your brand
- Use Fulfillment by Amazon (FBA)
- Speed up shipping times (if using FBM)