What is the Amazon Buy Box: Expert insights to win it in 2023
Among the most influential tools for sellers in the Amazon toolbox is the Buy Box (or Featured Offer functionality). And it’s now responsible for impacting the majority of purchase decisions made on Amazon’s platform. Current estimates indicate that 75-82% of Amazon sales go through the Featured Offer (or the Buy Box) functionality and that the percentage is even higher for mobile purchases. Here’s why.
What is Amazon’s Featured Offer?
Amazon sums up Featured Offers (often still referred to by sellers as the Buy Box) like so:
“The Buy Box is a window that appears at the top right of a product detail page above the Buy Now button. This automated component lifts products above the competition to help customers find what they need and compare alternatives based on factors like product price, condition, and shipping speed.”
For third-party sellers looking to sell on Amazon’s marketplace, Featured Offers let you showcase your products to a massive audience. It also provides credibility by showcasing products prioritized by Amazon and makes the most of prime real estate at the top of Amazon product detail pages. All the while, Amazon stirs up some healthy competition among seasoned sellers to ensure every seller has a fair shot at landing a Featured Offer slot atop a product page.
Note that not all sellers are eligible to win the Buy Box, but thanks to a bit of buyer psychology and Amazon’s customer-obsessed business approach, the Buy Box can be sellers’ straight shot to becoming the first choice for customers who are on the hunt for products like yours.
Why top sellers retain control of Featured Offer’s prime real estate?
Per an interview with Inc., one seller engaged in the ongoing Featured Offer pricing wars shared just how important it is to retain that visibility:
"We see a very precipitous drop in our sales if we ‘lose the buy box.’, Sales tend to plunge, and all of the sudden, you're slowing the growth that you could have [had]."
It’s an opportunity squandered if you’re a business selling via Amazon, yet not putting your best foot forward when it comes to competing for a buy box prime slot. Although that slot is often assigned to the most reputable businesses selling items at the best prices (all in an effort to have the best deal be the one that’s also most convenient for the customer to make), price isn’t the only consideration at play when it comes to winning a piece of the Featured Offer page real estate.
Here’s a bit more of what goes into the algorithm behind the component.
Understanding the Amazon Buy Box Algorithm
The secret to unlocking Amazon’s Featured Offers formula and becoming a competitive third-party seller? Understanding it — and then using its levers to work to your advantage, rather than against you.
While many businesses still refer to the goal of winning the Buy Box, it is not quite as black and white as winning versus losing. Let’s explore how it works.
- First and foremost. sellers hoping to win must meet Amazon’s eligibility requirements.
- Then, the algorithm further ranks sellers based on a handful of criteria — including comparing sellers and how they hold up on each variable for the same product.
- Often, especially with popular items, multiple merchants rotate their spot as a Featured Offer.
Ultimately, Amazon tries to balance giving the consumer the best value for their money, by weighing low prices with impressive seller metrics.
How can you win the Buy Box: Expert insights
The latest Amazon statistics tell us that products from small- and mid-sized businesses (SMBs) account for roughly 60% of sales in Amazon stores. Plus, currently, there are almost 2 million third-party selling partners on Amazon.
At a time when competition among sellers is fiercer than it ever has been, achieving this brings many unique and often tricky challenges to navigate.
We spoke with ChannelEngine's CEO, Jorrit Steinz, and VP of Product and Technology, Feike Groen and we’ve summarized their key recommendations for success below:
The good news is that most variables that impact “winning the Buy Box” are within your control. A mixture of variables is factored in when sites like Amazon decide which seller appears in the BuyBox for a particular product. Generally, these fall into three key overarching categories; seller performance, delivery time, and price.
Seller performance: Reputation and speed go a long way.
As the name suggests, seller performance covers metrics related directly to your reliability as a seller on the marketplace. This includes things like stock levels, fulfillment scores, number of returns, reviews, on-time delivery, pre-fulfillment cancellations, and customer response times—for every logistical KPI. There is a set percentage you need to maintain. If you drop below that, your sales score is negatively affected.
We still see many businesses overlooking the value of this metric - not realizing how big an impact it can have on your BuyBox share. You actively have to build effective fulfillment and automation processes to become and stay competitive on these platforms. Sure, some newer marketplaces only factor in price and stock levels. However, the more advanced platforms—like Amazon and Bol—use more intelligent algorithms to assess all of these contributing factors.
Delivery: 24 hours or bust and tactical fulfillment
You’ll almost always need to offer 24-hour services to be competitive in the buy box when it comes to delivery times. There are occasional cases, with specialist items like furniture, where this doesn’t apply—but typically, if it’s a popular product, next-day delivery is a must.
When shaping your delivery strategy, you’ll also need to decide on Marketplace Fulfillment—for example, Fulfillment By Amazon (FBA) / Fulfillment By Bol (FBB—or Fulfillment by Merchant (FBM) / Merchant Fulfilled Network. This can be tricky, as the method favored by the marketplaces regularly switches, particularly as we approach major shopping holidays like Black Friday or Prime Day.
When it comes to fulfillment methods, the Amazon algorithm gives an advantage to sellers who use Fulfillment by Amazon or Seller-Fulfilled Prime - a big boost when battling for the BuyBox. Sellers using fulfillment-by-Amazon (FBA) are automatically eligible to be Prime sellers. However, during busy periods, marketplaces need to ensure they don’t overload themselves, so the preference often switches to FBM.
That would mean as a seller, if you had relied solely on Marketplace Fulfillment for your shipments, any chances you had of winning a share of the BuyBox suddenly disappeared during one of the busiest online shopping days of the year.
This is where hybrid fulfillment solutions become priceless, allowing you to switch between both Marketplace Fulfillment and FBM easily.
Realistically, you need to be able to support both methods, which places huge importance on really understanding your stock levels. At ChannelEngine, we know exactly how much stock is in each fulfillment channel, allowing you to switch and prioritize accordingly quickly.
Price: Compete but resist racing to the bottom
Last but not least, you have the all-important metric of your product - price. If you and your competitors have a similar ranking in all of the KPIs we’ve previously discussed, then ultimately, the BuyBox goes to whoever’s product is cheaper.
However, things aren’t always as straightforward as this. Sometimes, a seller’s performance rating is lower than yours, and to compensate for that, they drop their price. That doesn’t necessarily mean you have to drop your own price to match, as your higher seller rating is already boosting your overall BuyBox score, so you can afford to be a little more expensive.
This is where ChannelEngine’s dynamic repricer proves so valuable to businesses, allowing you to truly optimize your product prices and maximize your chances of winning the BuyBox. To effectively carry out this process manually would simply be impossible, especially when talking about keeping track of and updating thousands upon thousands of listings many times a day.
Again, this doesn’t just apply to ensuring your prices are low enough to compete with others. Suppose you’ve already won the BuyBox thanks to an initially low price. In that case, once your competitor runs out of stock, you can automatically increase your price, boosting your profits while still securing the BuyBox spot.
Ready to win? Prepare accordingly — and know what to look out for.
Clearly, there is much that needs to be factored in as you compete for the BuyBox. It’s not as simple as merely making your product cheaper than everyone else, nor can you rely on Marketplace Fulfillment and expect your BuyBox space to be secured. It’s about finding the balance between all of these elements, and being agile as you adapt to any shifts in the algorithm utilized by the platform to decide on the BuyBox position.
You also need to know how to remain competitive, and that means keeping your finger on the pulse of any updates to how Featured Offers work moving forward.
For example, earlier this July, Amazon committed to limiting its use of data on marketplace sellers so its retail business cannot gain an unfair advantage over other sellers. This equal treatment on the battlefield now applies to all sellers, including Amazon itself, setting the stage for fierce competition as the Featured Offer capability evolves. It’s time to get ready, stay ready, and position your business to win.
ChannelEngine specializes in empowering brands, retailers, and wholesalers to connect you to marketplaces and other sales channels worldwide. It offers a complete ecommerce and marketplace management solution with seamless integration so that you can expand your reach internationally and grow your customer base and sales, all while staying in control of branding and optimizing profits.
Book a demo with ChannelEngine today to understand how we can help grow your fashion ecommerce brand.