Success on Amazon is ALL about the Buy Box! Of course there are other factors, but if you can win the coveted Buy Box, your chance of success increases exponentially. Amazon provides a few recommendations for how to get your item in the Buy Box but they do not reveal the complete science behind how they select the vendor. So part of the challenge is monitoring your position and continually improving to earn the position.
Amazon Buy Box Formula
To be considered for the Buy Box, you must first qualify for Featured Merchant Status, a performance-based achievement. Although Amazon does not disclose exactly the formula they use to determine who gets Featured Merchant Status, Amazon points out that the standards very high and are centered on developing customer trust. Criteria vary by category and Amazon does not publish specific metrics for each, however these are some of the areas that are monitored:
- Listing accuracy
- A-to-z Guarantee claims
- Timeliness and frequency of customer communications
- Customer feedback
- Speed of delivery
- Shipping options
- Price (price + shipping)
- 24X7 customer service
- Longevity as an Amazon Seller
- Order volume
- Pro Merchant status
Two areas Amazon highlights in their formula are price + shipping and item availability. Although price is not the only factor for consideration in winning the Buy Box, the combination of price + shipping must be competitive. You also cannot win the Buy Box if you do not have an item in stock. Stock-outs also results in negative feedback which affects your ability to reach Featured Merchant Status.
You can win the “Buy Box” if you use Fulfillment by Amazon or if you handle your own fulfillment
What you can do to get your item in the Buy Box
You may think that you can meet Amazons performance expectations for one item, or maybe even ten. That may be doable, but what if you have hundreds? Or thousands? To consistently perform at an optimal level means you need visibility and control of the purchasing process from start to finish across all items. Although many companies try to do this manually, they incur a tremendous labor burden to do it, which ultimately cuts into their already lean margins.
But there is technology available that can help you improve your performance dramatically without a large investment and give you an edge over your Buy Box competition.
Multi-channel management (MCM) solutions integrate Amazon (as well as any other eCommerce or point-of-sale system) directly into your order management system so that common tasks such as item, inventory, order and shipping management can be completed electronically. Compared to manually retyping data from one system to another, MCM speeds processing, dramatically reduces errors and allows you to reach the accuracy and customer service levels you need to win the Buy Box.
Improve item management Match items from your item database to Amazons internal catalog to list more items faster so you can increase listing accuracy, order volume and speed to market.
Process orders faster As orders are placed on Amazon the MCM solution captures them and pushes them to the appropriate system (ERP or accounting) or third party (drop-ship supplier or warehouse) for fulfillment. Processing orders electronically improves accuracy as it eliminates data entry and orders can be turned around faster, decreasing the amount of time between order placement and delivery.
Provide accurate and timely shipping information Once an order is received and shipping data is generated, the MCM system can collect it and send it directly to Amazon enabling accurate tracking information and quicker shipment to buyers. Furthermore, since data is no longer being entered by hand, shipping addresses are more likely to be correct, meaning items are more likely to reach the intended buyer. Good shipping practices such as these leads to reduced chargebacks.
Update inventory in real-time As orders are fulfilled and inventory is decremented in your back-end systems, updated stock counts are automatically sent to Amazon to ensure accurate inventory levels are presented to customers. Not only does this reduce stock-outs, improving customer service, but it also helps to plan purchasing.
Provide exceptional customer service MCM systems collect customer and order data from Amazon and all other sales channels in a single location where all employees can access it. So should there be a customer inquiry, anyone can quickly view all the activity related to that customer and their order to resolve the issue swiftly and correctly. Quick responses will help to limit the number of A-to-z Guarantee claims filed.
Ongoing monitoring Its important to note that status, eligibility and criteria to earn Featured Merchant Status and win the Buy Box may change at any time, meaning not only attaining but maintaining stellar performance is a must. One way to do that is to look at the Customer Metrics page on Amazon. It offers insight in to customer satisfaction, a key contributor to how Amazon evaluates Seller performance.
- Perfect Order Percentage (POP) The percentage of orders that are perfectly accepted, processed, and fulfilled
- Order defect rate (ODR) The percentage of orders that have received a negative feedback, an A-to-z Guarantee claim or a service credit card chargeback (target: < 1%)
- Pre-fulfillment cancellation rate The in-stock rate for items sold with Amazon.com (target: < 2.5%)
- Late ship rate Rate of orders with shipment confirmations that are three or more days beyond the expected ship date (target: < 4%)
- Refund rate Rate of refunded orders (high refund rates may be an indicator of item stock-outs)
To learn more about how nChannel can help you win the Buy Box, contact us today!