What Is the Buy Box?
The Buy Box is the primary selling method on several eCommerce marketplaces, such as Amazon and Walmart. With these marketplaces, the Buy Box is represented by a prominent button labeled “Buy Now” or “Add to Cart”. In marketplaces where multiple sellers can offer identical products or SKUs, competition to control or own the Buy Box can be fierce.
Who owns the Buy Box?
Each marketplace calculates Buy Box control or ownership differently. In most cases, it considers both seller reputation and product pricing. SellerActive's primary tool for winning control of the Buy Box is intelligent product repricing.
A typical Buy Box on Amazon displays an “Add to Cart” button and near the bottom, an “Other Sellers on Amazon” box. The owner of the Buy Box controls the “Add to Cart” button.
How does the Buy Box impact my business?
The Buy Box produces most of sales for a product. For example, on the Amazon marketplace 82% of sales for marketplace products are made in the Buy Box. This figure rises to 90% for mobile shoppers, a market share that grows in importance every year.
In addition to improved sales, Buy Box ownership gives your company visibility and credibility. When you own the Buy Box, the marketplace has declared that they put their trust in you. That trust is valuable!
For some marketplaces, the algorithm is simple: if you have the item in stock and offer it for the lowest price, the Buy Box is yours. Most marketplaces also consider other factors such as seller reputation when awarding Buy Box ownership.
How do I own the Buy Box?
Marketplaces don't reveal their Buy Box algorithms, so the rules for ownership aren't straightforward. The most complicated and mysterious Buy Box algorithm belongs to Amazon, the largest marketplace. In addition to price, the following criteria are also considered.
- Order fulfillment – products that are Fulfilled by Amazon (FBA) receive Buy Box priority.
- Seller-Fulfilled Prime – products that are Fulfilled by Merchant (FBM) while offering the benefits of Amazon Prime get a boost.
- Order handling success ratio – Amazon tracks a Perfect Order Percentage (POP), which is the ratio of sales which are handled professionally and generate a positive customer experience. The higher your POP, the better the chance you'll own the Buy Box.
- Seller status – on Amazon, if you're not a featured merchant, you will not own the Buy Box. To become a featured merchant, you need to maintain a customer approval rating of at least 98%, with few returns and fast shipping.
How do I keep control of the Buy Box?
Once you own your product's Buy Box, the next challenge is keeping it. If Buy Box ownership were just based on the best price, the solution would be simple: as long as your prices are better than your competition, you should own the Buy Box. Unfortunately, the relationship between pricing and the Buy Box is more complicated than that. For example, if you own the Buy Box, maybe you could list at a higher price and still own it. That means you could be making more profit.
Manually changing pricing to win the Buy Box for each product is time consuming. If you are selling hundreds of SKUs on a marketplace, it is difficult to perform this task manually without losing Buy Boxes to more responsive sellers.
Speed and responsiveness are critical to winning the Buy Box. If you're selling thousands of SKUs across multiple marketplaces, it's impossible to manually manage pricing effectively.
In this example, a new product is added to the Amazon marketplace and configured in SellerActive with the Algorithmic Buy Box strategy. The product has a maximum price of $50 and a minimum price of $30. SellerActive adjusts the price until we not only win the Buy Box, but provide the best price with the best profit margin for the seller.
SellerActive intelligently and algorithmically conquers the marketplace repricing issue. To learn more about what we can do, read Winning the BuyBox