Amazon’s Value Proposition: The Buy Box

Amazon is a beast.

The e-commerce giant boasted $386 billion in net revenue last year, smashing all previous years by a healthy margin. In fact, Amazon’s net revenue increased 6,333% between 2004 and 2020, representing significant year over year growth. Perhaps the most convincing piece of evidence regarding this explosion is captured in Amazon’s corporate mission statement:

“We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.”

Translation: The #1 thing that Amazon cares about is the customer experience.

Amazon makes money when conversion happens; a portion of every item sold on Amazon goes to the company in the form of fees. Thus, it can be easily inferred that Amazon will promote practices that lead to conversions, and higher conversions signal better overall shopping experiences.

Traditional e-commerce platforms devoted one product listing to one seller, resulting in multiple listings for the same product. Amazon’s unique system combines all available offers for a particular item into one listing, providing an easier way for customers to see what is available to them without extensive searching. In order to regulate and incentivize healthy competition, Amazon introduced the Buy Box to determine who, of all the sellers, gets the sale based on a hefty, data-driven algorithm. Long story short, Amazon balances seller price with seller performance to determine the winner.

Because they care about healthy conversion, Amazon puts the seller that they trust the most in the Buy Box. Getting in this spot becomes the #1 priority for Amazon sellers. If you lose the Buy Box, you die.

So, how exactly do you get into the Buy Box, and stay there?

  • Eligibility

The cheapest product does not always get the Buy Box. Amazon looks at the full product cost (unit price plus shipping, but not including taxes) and compares that to other sellers’ price and performance. Seller performance does trump price, so a seller with a higher price can sit in the buy box over a seller with a lower price if their performance metrics convince Amazon that they are a better seller.

  • Order Fulfillment

Fulfilled by Amazon (FBA) items will always receive the Buy Box over Merchant Fulfilled Network (MFN) items. This has the greatest impact on the Buy Box algorithm, as Amazon trusts its own process more than anyone else’s. FBA sellers make up 66% of the top 10,000 sellers in the U.S. because of this distinct advantage. Essentially, any sort of issue that could happen between Amazon’s fulfillment center and the customer is Amazon’s liability and doesn’t touch the seller’s performance metrics.

  • Customer Feedback

Bad reviews hurt your chances at the Buy Box. As well, sellers with more reviews and questions will beat sellers with fewer reviews and questions. Answering questions quickly and being active with seller support can help you out when vying for the coveted position.

The sheer importance of the Buy Box led us to incorporate its namesake into our own company name. The entire mission of BuyBoxer services is to elevate brands to the point of full trust with Amazon, resulting in a great customer experience. Through our expertise and in-house proprietary software solution, we have become a go-to consultant for many sellers that wish to grow their brand presence and performance on Amazon. We can do the same for you!

Amazon. Done.

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