In his April 2017 letter to shareholders, Amazon Founder and CEO Jeff Bezos said the following:
“There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it…” – Jeff Bezos
If you are considering starting an Amazon based business, or you simply want to take advantage of this huge marketplace to grow the business that you already have, I have some good news for you. The Amazon Marketplace is a great platform that allows you to not only establish a brand, but to sell your products and to earn a lot of money – if you know how to Win the Buy Box.
The buy box is not simply awarded to one seller, but instead, several sellers often share the buy box. In order to determine who will be listed in the buy box, Amazon uses an advanced algorithm, honed and tuned via trillions of clicks and customer interactions. And while some people may claim that you can beat the system and get listed in the buy box by doing specific things, the best way to win the buy box is to be a good seller, with highly rated products and not charge unreasonable prices (gouging).
When no one is listed in the buy box, or you simply do not see on a product page, it’s often because none of the sellers have met the requirements of the buy box. This is an example of an item with no Buy Box.
In April 2017, Sofia Vergara from ABC’s Modern Family posted a video on her Instagram where she interacted playfully, with this product in her pool. That video went viral, receiving a few million views, and the product became a red-hot search on Amazon.
In these situations, it really is simply Economics 101 – supply and demand. What was a $39.95 item on Amazon one day, started to sell very quickly (you often see 1,000’s of units move in a 24-48 hour time frame) and sellers reacted, trying to maximize margin and take advantage of a unique opportunity. Just one day later, the low price was above $100.
Amazon’s reacts to this by often ‘pulling the buy box.’ See example above, there is no Buy box, you have to click to see all the prices.
The item is still for sale, but Amazon forces an extra click so customers can see that there are other options, and while they may not be lower priced, that is what the marketplace dictates.
In order for a seller to be listed in the buy box, the product that they are selling has to be new. It cannot be used because used items will have their own ‘buy used box.’
The product must be in stock in order to win the buy box. If the product is not in stock, then the seller will not win the buy box. In other words, the buy box is not going to show products that are out of stock, instead, they are going to rotate to the next seller in line for the buy box.
The only exception to this rule is when a product is listed as back ordered. If a product is back ordered, it means that the seller is accepting orders for the product, however, the product is not ready to be shipped and it will be mailed out at a later date. Amazon.com (the seller) often employs this tactic; stockpiling orders against stock they believe will arrive shortly into their own warehouses. More on that later…
Excepted from my soon to be released eBook, Selling on Amazon – Strategy and Tactics that Help You Succeed.
Have you seen anything else ‘strange and unusual’ with your Amazon listings? As always, if you have any questions you can contact me at firstname.lastname@example.org or visit my Blog at timothyscottburns.wordpress.com