Not Enough Consumers Know What the Buy Box Is
What Is The Buy Box?
Amazon’s buy box is a concept that many shoppers don’t understand because they believe they are buying a product directly from the manufacturer every time. The reality for sellers is that, often, there is competition not only within the category but also competition on any given listing for who earns the sale when a shopper clicks ‘Buy Now’.
The buy box is Amazon’s opportunity for different sellers to compete on price, to keep their consumers from paying inflated prices. The buy box is the button that allows shoppers to purchase with only a couple of clicks, and the buy box competition exists down below the buy box, where you will find all of the different sellers who haven’t won the competition.
Any given product on Amazon should have only one listing, but any number of sellers can offer the same product so long as they have inventory. Amazon uses the buy box as a way of containing all competition for that particular sale in one place.
For natural food sellers, there should be less competition from 3rd party sellers than in categories like electronics and other non-perishables. But for grocery brands who work with major distributors, it’s a risk that those relationships often allow 3rd party sellers to purchase products and appear on Amazon listings, in competition for the buy box.
Buy Box Eligibility
You must have a professional selling account to win the buy box. Additionally, your account health must remain in good standing, meaning that orders are fulfilled on time and instances of negative customer feedback are rare.
For any seller hoping to grow on the platform, these two aspects should be a given.
How Do You ‘Win’ The Buy Box?
When there is competition between sellers, Amazon’s algorithm factors in two main components to determine who will win the buy box. Because it is a real-time marketplace, there are instances when the winner will flip back and forth fairly quickly.
Two main factors for winning the buy box:
Selling through FBA: Amazon gives weight to listings that can offer their shoppers Prime delivery
Lowest price: Price competition can be volatile, moving quickly and with the winner often being a matter of cents
What You Can Do When You Lose The Buy Box
Sellers won’t necessarily want to get into a pricing battle with resellers, who don’t always have the financial strain of R&D, payroll, marketing, and production. Overhead for a reseller can theoretically be as low as storage and shipping.
There are settings in Amazon’s seller central which allow a seller to automate their price within a given range. This sort of lowest bid war against resellers can be difficult for brand owners to keep up with.
In the end, there isn’t too much that you can do, even as the trademarked seller. Amazon likes competition for the buy box because it results in a better price for their consumers.
There are two ways for grocery brands to avoid buy box battles in the long term:
Negotiate with your distributor about how they sell the product and at what price. In this way, brands might force resellers to adhere to a price that won’t consistently undercut the brand owner.
Differentiate your offering in some way, either by selling a new pack size or packaging your product differently. In either case, you would be creating a new listing, either to attach it to the previous listing as a variation or to stand alone in the search results and hope that consumers will be influenced by the additional offering.
Losing The Buy Box Isn’t The End of The World
It’s important to keep in mind that losing the buy box on your own product doesn’t necessarily equate to lost sales. It does equate to lost Amazon sales, but your P&L is still being benefitted through the distributor sales.
It’s Not Great, Though
Because when you lose the buy box for your product, and especially your perishable product, you lose control over what the consumer is receiving. A 3rd party seller might have purchased your inventory from a distributor for a discount towards the end of its shelf life, and Amazon consumers won’t associate that poor experience with the seller, but with your brand.
Why Customers Don’t Know About The Buy Box
The Amazon buy box is one of the marketplace’s best-kept secrets, hiding in plain sight. There is a level of trust necessary to make purchases online, and especially to buy food products online. If shoppers knew that their afternoon snack was being sold by someone other than the authorized brand owner there could be pushback.
For sellers of natural food products, this can be frustrating. It does seem appropriate that a shopper should want to buy from the brand, from the manufacturer. There is something to be said about not wanting your CPG product handled in facilities outside of your control before getting shipped across America, where it will be representative of your work.
We have seen brands who put explanatory graphics in their carousel images, trying to educate consumers on the buy box and how to purchase from them, the brand owner. This is an option, but it relies on teaching consumers about a concept that they often don’t know exists and that may shy them away from the listing altogether.
Why You Should Upkeep Listings Even If You Can’t Win The Buy Box
We have worked with clients who do not have the rights to sell their products on Amazon. They still upkeep their Amazon listings because merchandising matters, and how a brand is presented on the world’s largest marketplace matters. An Amazon listing is one of the highest-trafficked representations of a brand’s presence.
Once images and copy have been added to a listing they should stay there, but over time as products change and the copy may become outdated, images could no longer be reflective of the brand and consumer base.
If you aren’t on Amazon, allowing your product detail pages to be populated by resellers, it is more likely that consumers will be misled by 3rd parties who may be buying and selling dozens of different brands, and who have no loyalty to accurately representing your message and no responsibility to answer to the consumers who bought from them but saw your logo.
Sometimes Amazon Removes The Buy Box Altogether
Usually this happens when a brand has raised its price and there are no other sellers to put in the buy box. It’s their version of a slap on the wrist for negatively impacting the consumers.
Sometimes there are multiple sellers and Amazon’s algorithm deems none worthy of having the buy box. We had a client who increased their prices across all nine of their SKUs, in response to Amazon having raised their fee structure. Amazon’s system fixated on one of those nine SKUs and decided the price was unfairly raised, flagging it as having a “brand health issue”.
In this case, there were other offers in the buy box, but all other prices were still higher than the newly raised pricing. Amazon removed the buy box for all sellers.
It took a series of seller support cases pointing out that the price increase was in response to Amazon’s own updated fee structure before Amazon eventually lifted the brand health issue and reinstated the buy box.
Inventory and The Buy Box
A product that is out of stock will naturally not be in the buy box. If there are multiple sellers competing for your buy box, then the listings will remain live and consumers will be presented with the next most favorable offer.
This is really the only positive of this competition, that a lapse in inventory can be fully covered and go undetected by shoppers so long as there is a reasonable offer behind yours in the buy box.
Advertising and The Buy Box
So much of Amazon’s power for sellers comes from their advertising reach and the scope of the PPC ad platform. When a product is not winning the buy box, though, Amazon’s PPC campaigns will not serve for that ASIN.
This is probably for the best, as it could save sellers from spending money to show up in search results only for a 3rd party to reap the sale.
Note that for ad campaigns not attached to ASINs, such as Sponsored Brands campaigns that feature out-of-stock products, those campaigns will continue to serve and should be manually paused if a product is consistently losing the buy box.
The ‘Buy Box Percentage’ in Amazon Reports
For brands in constant competition for the buy box, this report offers a look at how often any given product is winning the buy box.
Using Amazon’s dropdown in the top left go to ‘Reports’, then ‘Business Reports’. Within this dashboard click on the link for ‘Detail Page Sales and Traffic’ and set the date range for whichever month or week you would like to examine.
One column in this table is ‘Featured Offer (Buy Box) Percentage’, which will give you a sense of how each of your ASINs is performing over the given timeframe.
This can be a great tool for brands. By identifying which products are most often losing the buy box, you might gain a sense of what to focus your attention on in terms of distributor communications, advertising activity, and general Amazon strategy. Maybe you sell a 1, 3, and 10 pack of a product, and the 1 pack has the lowest margins and most consistently loses the buy box. You may restructure your selling approach to focus on the 3 and the 10 pack for Amazon, to allow the 3rd party sellers to take those lower margins for the 1 pack while you focus on the bulk sizes. Then, when possible, you can renegotiate with your distributors to allow more control over 1 pack pricing.
The Buy Box Shows Amazon’s Priorities
It can be surprising to Amazon consumers that an organization such as Riverboat would be necessary. Amazon has made buying as easy as consuming, so the fact that it could be difficult to sell on the platform is often difficult to understand.
In this way, the buy box situation is a reflection of Amazon’s general attitude: the buyer reigns supreme and the seller is so interchangeable that their buy box algorithm will often switch the seller of note without notifying anyone.
The world’s largest marketplace is structured on competition. There is competition within categories and between brands, and burrowed just below that there is competition for every single sale, even once a consumer has decided on the product they want. If it’s your product for sale then this matters, because how you are represented on the platform and how you are represented when the Amazon box arrives at a buyer’s front step is a reflection of more than just your e-Commerce presence, it is a first impression of who you are as a brand. Even if you weren’t the one who sent the product.
Fight to retain the buy box. Because even if consumers don’t know that it’s there, their shopping experience is being influenced.