Winning the Buy Box
Brands and Amazon Buy Box
The buy box on an Amazon product page is the golden key to product sales. What is the buy box? It's the "Buy Now" button located on the right side of the product detail page, where customers can add product to their cart. For items that are eligible for the buy box, this is where a majority of the sales happen as most consumers will click the buy box and not look further down the page to see where the item may be available from "Other Sellers on Amazon".
However, if you do a search on Google for anything about the Amazon buy box, you will see that the information available is geared towards the third party seller winning the buy box. What about brands and manufacturers? Should they care about the buy box? Definitely!
First, let's talk about margins. When a brand sells a product via Amazon, they are getting a return on investment into their product. Some brands believe that it's okay to not sell on Amazon because they are still receiving profits from the purchase of products that third party sellers are selling. However, almost 50% of all eCommerce sales made in the US are made on Amazon. That's a large chunk of the market brands are missing out on if they choose not to sell directly on Amazon. For brands that are on Amazon, losing the buy box means losing sales, as a majority of sales on Amazon go through the buy box.
Second, let's talk about brand integrity. Customers seeking out products on Amazon will purchase from a third party seller if that seller has the buy box on a product. But what if that third party seller is selling defective, used, or counterfeit stock? The customer may leave a negative product review, driving down product rating and consumer confidence.
So what happens when the brand loses the buy box?
The consumer has three choices here:
- purchase a similar item from the brand's competition,
- move away from Amazon and try and find the item on another channel,
- or, the most likely option, purchase from a third party seller who has the buy box on the product.
In addition to seeing sales plummet, a 3p seller who wins the buy box can change content on product detail pages. Oftentimes sellers will post incorrect or misleading information which can cause major customer service headaches for venders.
What happens when the buy box is lost too often?
According to Amazon Advertising expert, Jason Ross of Conquest, a high lost buy box percentage - or high LBB% - can cause a myriad of issues for vendors.
- High LBB% can cause costly inventory problems. Amazon purchases inventory from vendors to store in Fulfillment Centers (FCs) based on a demand forecast. If third party sellers are consistently undercutting the vendor, Amazon won't sell enough of its inventory. Down the road this will lead to vendor-funded markdowns and difficulty in forecasting.
- High LBB% can cause Amazon to cut POs. Basically, the vendor's inability to win the buy box most of the time indicates they aren't controlling their distribution properly. A common industry phrase for loose supply chain practices is "vendor X has stuff is falling out of the back of trucks". Amazon demands the vendor clean this up on their own.
- High LBB% causes problems with CPC advertising. Vendor's cannot confidently promote ASINs in Amazon Advertising CPC ads when 3P wins the buy box regularly, unless they also want to drive sales for 3P ASINs.\
- High LBB% can wreak havoc in organic search, enabling the buy box winners to gain valuable relevance on important search terms. Typically the vendor's ASIN will perform best in organic search when the vendor is meeting Amazon's retail requirements, e.g. LBB% <5%. However, sellers winning the buy box for an extended period may surpass the vendor in traffic and sales, making it difficult to win back the lost organic placements. This situation is exacerbated when sellers also have Prime offers.
What can brands do to win and protect the buy box?
Some tips to help brands win the buy box:
- Create a MAP policy to prevent 3p sellers from underpricing you.
- Develop an Amazon specific distribution policy.
- Register your brand with Amazon Brand Registry 2.0.
Some tips and tools to help brands protect the buy box:
- Become a hybrid seller by opening an account on Seller Central. This will allow you to have some additional influence over pricing and will provide a back up solution in the event that the Amazon fulfillment center runs out of inventory.
- An important element for your product detail page is to maintain a high star rating on products by paying attention to customer reviews and responding immediately to negative reviews. A product like Reviewbox will help you stay on top of this with alerts and automation.
- Employ a product like Copybox to monitor your product content for changes. Receive alerts to any changes made to product listings.
- Add Pricebox to your arsenal of tools to help monitor inventory and receive alerts on low-stock and out-of-stock products.