How Does the Amazon Buy Box Work?

How Does the Amazon Buy Box Work?

For the millions of brands and sellers on Amazon, “winning the Buy Box” is vital to increasing sales due to its high impact on driving conversions for product listings. If your product is featured in the Buy Box, then consumers are much more likely to purchase your product. In fact, over 82% of all Amazon sales go through the Buy Box. And that percentage is even higher for mobile users on the platform, so winners of the Buy Box have the huge advantage of a colossal 150 million mobile users on the Amazon marketplace.

In this post, we will highlight how the Amazon Buy Box section featured on the right side of a listing works, and the many variables that factor into the algorithm that vendors should be aware of to increase their chances of winning it over their competitors.

Many aspects factor into why a vendor wins the Buy Box, such as the speed at which an item ships to a consumer, its fulfillment method, the price, whether it is Prime eligible, coupons and other offers, and the selling account metrics. But Amazon does not guarantee 100% Buy Box ownership, as third-party sellers need to make money too, so this is where the battle for the Buy Box gets interesting.

Amazon Buy Box Buy Now Button - Pacvue

What is the Amazon Buy Box Algorithm?

If there are multiple sellers on the listing, the seller that’s shown is determined by Amazon based on their proprietary system for rotating the Buy Box to other parties to keep things fair. Amazon's Buy Box algorithm assembles the same products from various sellers, recognizes who is giving the best offers, and then recommends that offer to consumers searching for that product. The Amazon Buy Box then shows its customers that you are a trusted vendor who provides quality products with excellent customer service.  

Amazon operates as a search engine because it's important to provide users with relevant results. The Buy Box formula ensures that only vetted and trusted sellers with reasonable prices win the Buy Box. This equation results in a positive consumer experience and repeat Amazon shoppers.  

What happens often is that for more popular items with several sellers, multiple sellers may rotate their spot on the Buy Box. The Buy Box algorithm constantly produces different winners within the same spaces. It's common to win the Buy Box at the beginning of the day and then lose it at the end of the day.

Factors the Buy Box Algorithm Depends On

Product Price

The most important factor in winning the Buy Box is, of course, your price. If the Amazon algorithm is all about giving customers the best deal and the best experience, price is paramount.

For 1P vendors, it’s important to have tight control over your listings on other marketplaces, as Amazon is a price follower. It’s important to note that while 1P vendors don’t have control over price, they do have control over profitability. Understanding your profit margins will help you offset the Cost of Goods Sold and run the right promotions, enabling Amazon to keep your pricing competitive with other sellers.  

Although 3P sellers have more control over pricing, Amazon still monitors prices listed on other marketplaces and requires your offer to be priced in-line or lower than those other marketplaces.  

According to Inc.com, Amazon removes the one-click buy button from certain product listings if offered at a lower price outside of its platform. Now, instead of saying “add to cart,” it will display all buying options. An Amazon spokesperson had this to say about the phantom buy boxes: "Sellers set their product prices in our store. If a product is not priced competitively by a seller, we reserve the right not to feature that offer. Customers can still find all offers on the offer listings page."  

To learn about some compelling ways to achieve a competitive price, check out this article on the importance of product pricing and effective pricing tactics for your eCommerce store.

Eligibility

For a seller to be eligible for the Buy Box, they must be registered as a Professional Seller Account, and the seller's account health should remain in good standing. Another factor contributing to your eligibility status is simply having an accurate product listing. Sellers must carefully craft a title, description with relevant keywords, proper categorization for items, and any other select item conditions to avoid confusion with customers.  

Shipping Time

The faster delivery that you offer, the higher the chances are that you will win the Buy Box. A handling time of more than 14 days will greatly hurt your chances of winning the Buy Box.

Order Defect Rate

The order defect rate (ODR) is a key measure of a seller's ability to provide a good customer experience. Order defect rate represents the percentage of orders with one or more indicators of poor customer service during a given 60-day time period. To meet customer expectations, Amazon requires sellers to maintain an Order Defect Rate under 1% to sell in the Amazon marketplace.  

In-stock Consistency

If you want to win the Buy Box, you need to keep your items in stock, as Amazon continuously monitors your inventory on a routine basis. If your inventory becomes low, it will decrease your odds of winning or keeping the Buy Box.

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[GUIDE] How to Win the Buy Box on Amazon

To learn more about what factors determine who wins the Amazon Buy Box and tips for how to create a strong Buy Box strategy to win, download our new comprehensive guide on How to Win the Amazon Buy Box today!

Having once again set a new high bar for Amazon sales – what can advertisers learn from the event to help them win on Black Friday?
by 
Pacvue Corporation

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