Nozzle Insights

The latest news and industry insights for all things Amazon advertising, both for agencies and sellers. Keep in the loop for Amazon search and display stories, as Nozzle helps brands leverage success in the e-commerce world.

Conquering the Amazon Buy Box in 2020

    Although many consumers are not even aware that it exists, Amazon’s ‘Buy Box’ is a highly valuable piece of online real estate. The Buy Box refers to the white box on the right-hand side of an Amazon product detail page where customers can click ‘add to cart’ or ‘buy now’. Winning the Buy Box is vital to a retailer’s success on Amazon, where multiple third-party Sellers (3P) and first-party (1P) Vendors  (i.e. products sold by Amazon) often offer the same product. 

    How valuable is the Buy Box? The numbers say it all. According to Amazon data, more than 75% of non-media sales come from the Buy Box. With 92% of American online shoppers and nearly 90% of UK customers regularly using Amazon, the value of the Buy Box cannot be overstated. Losing out on the Buy Box can cost your company a significant number of sales. And likewise, winning the Buy Box can make your business vastly more profitable.

    Winning shares of the Buy Box

    Before we dig into the strategy, it’s worth explaining a few things about the Buy Box and how Amazon divvies it up. 

    You don’t just “win” the Buy Box outright. It’s probably more accurate to think of the Buy Box as offering shares. If you are ‘Buy Box eligible’, you will win the Buy Box some percentage of the time. Of course, only Amazon retailers with excellent performance metrics are eligible to compete for shares of the Buy Box. Once you’ve met Amazon’s Buy Box eligibility requirements, its algorithm gets to work breaking down the variables. The more competitive your product, the more often you will win placement. 

    Although the details of the algorithm haven’t been made public, the gist is this: if one retailer is stronger than the others, that retailer earns a higher percentage share of the Buy Box. For instance, a top-ranking seller might hold the Buy Box for a particular product for 75% of the day, leaving the remaining 25% to a lower-ranking seller. 

    The essential point to bear in mind is that Amazon awards the Buy Box to the best option for its customers. To stay competitive, you need to deliver both quality and value. But to really conquer the Buy Box, you’ve also got to build a smart, targeted strategy. Here are our top five tips for creating a winning strategy.

    Nozzle Amazon Customer data

     

    Make sure your basics are on-point

    First things first, you need to make sure your basics are on-point. These performance basics include:

    • Star rating
    • Customer reviews
    • Shipping time
    • Low defect rates
    • Customer service

     

    Overall, customer satisfaction can drive higher conversation rates and organic rankings. To ensure this outcome, always take the time to respond to negative reviews and work to maintain a good relationship with your customers.

    Ultimately, positive customer experience and these other metrics form the bedrock of winning your share of the Buy Box. If you’re not delivering on these points, all the strategy, technology and data in the world isn’t going to help you. Deliver the basics first to ensure you’re laying a solid foundation.

     

    Competitively price your products

    Amazon aims to deliver value to its customers. Amazon aims to give its customers the best possible product for the lowest possible price. If you want to earn a share of the Buy Box, you must be one of the cheapest listings. It’s worth mentioning here that when Amazon compares pricing between retailers, it uses a plus or minus 2% factor. Any price (including shipping) within that 2% range is considered by Amazon to be the same price. Things like shipping time, Prime eligibility and reviews are the tiebreaker. 

    In eCommerce, it helps to price your products competitively. But to win the Amazon Buy Box, competitive pricing is a necessity. Amazon features some of the most competitive and fluctuating pricing of any eCommerce platform. Dynamic pricing will enable you to maximize profits and earn a share of the Buy Box. 

    Dynamic pricing can help you in other ways. Amazon’s competitive environment often drives down prices, but sometimes prices spike. When this happens, competitors can capitalize on a price spike and simultaneously raise prices. If you keep up with pricing trends, you can join in, which will help you maximize profits and maintain your competitive advantage.

    How do you achieve competitive, dynamic pricing? 

    The short answer is that you must stay on top of pricing trends. You could choose to do this by manually monitoring your competitors. Many brands gauge trends and set prices this way. However, with manual monitoring, it’s easy to fall behind because prices change multiple times a day. This is where tools such as analytics platforms can be incredibly useful.

    An analytics platform allows 3P Sellers to sync data with Amazon Seller Central and 1P Vendors to sync data with Amazon Vendor Central. Sellers and Vendors also gain access to dedicated “re-pricer” tools that auto update prices.  

    Analytics platforms also provide you with a dashboard so that you can review product-specific pricing trends — even deploying machine learning and AI to make predictive assessments. Visualizing the data will empower you to stay on top of trends and make the most of any profitable price spikes.

     

    Create targeted bundles

    Analytics tools are critical to staying on top of pricing. But these same tools deliver valuable customer data, which can be helpful in other ways. Data about your customers can help you give them what they want when they want it, as well as anticipate their future needs. An incredibly valuable application of this data is to craft targeted product bundles. If done right, this is a great way to get into the buy-box. 

    When another retailer is offering the same products as you, your products compete against each other for the Buy Box. But product bundles count as a ‘specific product’. If you bundle two products together in a unique way, even if those products are sold independently by another Seller, your unique product bundle won’t have competition for the Buy Box. 

    An additional benefit of bundling is that it helps increase your average order value because customers are buying multiple products from you. For instance, you might bundle together a pair of running shoes with a pack of athletic socks. But this will only work if you pick the right products to bundle together.  

    Picking bundles that actually sell

    Although bundling products is a smart way to win the Buy Box, many brands struggle to pick the right bundles. After all, bundles force customers to buy more than one product. You can also only list a bundle in one category — usually the category of the highest priced item. If customers don’t want or need everything in the bundle, they probably won’t choose your product. If no one wants your product, your Buy Box ‘win’ is irrelevant.

    Analytics tools help you create bundles that will actually sell. Advanced analytics enable you to see ‘buying trajectories’, predicting which products are likely to be purchased in direct succession. By pairing these products together, you can generate the highest possible chance of creating bundles that incentivize conversions. Data will help you create curated deals for your target market. 

    A well-considered bundle can increases sales and profit margins. And Buy Box dominance can ensure that the customers are making their purchases from you instead of your competition.

     

    Make sure your PPC ads are working for you — not against! 

    On Amazon, pay-per-click (PPC) ads highlight your products as ‘Sponsored Products’. In order to place a PPC bid, you have to be Buy Box ‘eligible’ for that product. However, simply being eligible doesn’t mean you will actually win the Buy Box, even if you win the PPC bid. That means it’s possible for your PPC ad to lead buyers to a competitor's Buy Box.  

    To avoid wasting money funneling shoppers to what are effectively your competitor's listings, you need to understand what percentage of the Buy Box you are winning for different key terms. For 3P registered brands, this information can be accessed in Seller Central. By looking under “business report” and selecting ”view by ASIN”, you will get a breakdown of your Buy Box percentages per ASIN. For everyone else, this information is hidden in Amazon MWS. 

    Specifically, when it comes to understanding Amazon MWS data, third-party analytics tools, again, hold the key to easy assessment. Simplicity in this process is important because, in order to focus your bidding on only the search terms for which you are winning a high percentage of the Buy Box, you need to isolate the right terms and target your bidding in exact match campaigns.      

    The process of focusing your bidding on specific terms is a strategy on Amazon known as Search Term Optimization. This is a multi-step process that we have already written extensively about. We recommend checking that out for the details. However, the quick and dirty basics are using broad match and auto campaigns (either focused on keywords or products) to identify converting search terms, and then move those specific terms in exact match campaigns. To then put this in the context of the Buy Box, you need to cross-reference these high-converting exact match terms with your Buy Box win rate. 

     

    Leverage outside resources, if possible

    The last point on our list only really applies to registered brands that ‘own’ the product in question. However, if you are the brand that owns the product line, there are contractual options open to you that can limit your need to compete against resellers for space in the Buy Box. 

    For example, during contract negotiations (or re-negotiations) you can require resellers/distributors to increase their prices (in general or on Amazon specifically) so that you always price under them. You could also consider limiting sales volumes on the platform. Both of these moves will limit the competition you face across Amazon and increase your Buy Box wins. 

    You should also make sure to investigate unauthorized resellers in order to ensure that you aren’t competing for Amazon sales against Vendors that shouldn’t even be selling your products. 

    With all that said, this contract-driven approach is obviously only available to brands, not resellers of products. As a reseller, making sure that these kinds of restrictions aren’t put on you is critical to maximizing your potential to win the Buy Box. 

    Optimise ads with ease

    To conquer the Buy Box you need a plan and data

    Winning the Buy Box requires diligence, planning and a solid grasp of your own metrics and customer data. Ultimately, pricing and the quality delivery of products form the bedrock of Buy Box eligibility. You need to stay on top of these key metrics to optimize your operations to give yourself the best possible shot at winning the Buy Box, time and again. 

    A solid understanding of transactional customer data is also important. This allows you to form ‘buying trajectories’ to craft creative and unique bundles that will guarantee you a slot in the Buy Box, and can form the backbone of Amazon product bundling strategies that drive sales in their own right.   

    Data management should be an ongoing priority within your Amazon strategy. As most business owners know, the data analysis process can be time-consuming and yield inaccurate results. However, investing in analytics software can automate the lengthy manual process, provide you with more accurate data insights, and free up time for you to strategize solutions and deliver outcomes. 

    Analytics software can not only help you understand your customers, but it can give you an edge over your competition — when it comes to the Buy Box and your overarching approach to Amazon. 

    bundling strategies