The journey to the Buy Box on the Amazon marketplace can feel like an excursion for hidden treasure in the Amazon jungle.

It's like you're wandering around, holding a map with no clear trail and a compass that doesn't really work.

You're also racing to find it against countless other explorers. But your aimless wandering and naiveté to the landscape can all change with data.

Data can turn a novice explorer into Indiana Jones. It gives you a better view of the marketplace's competitive landscape and offers actionable insights that allow you to make decisions with confidence.

The path to the coveted Buy Box still is a difficult one to take.

Amazon is known to host some of the most vicious price cutting in ecommerce, and it's all in an attempt to win the most valuable box on the internet.

The Buy Box is responsible for 70%-82% of sales on Amazon. When a lot is on the line, some sellers tend to make poor decisions, like slashing their prices and eliminating profit margins just to win some sales over the competition.

Data can help you turn those irrational pricing decisions into well calculated ones that help you earn sales while posting impressive margins.

Here are the different kinds of data you need in order to have your Buy Box cake and eat it too.

Assortment data

Assortment data is the best way to measure who you're going to be directly competing against in order to win the Buy Box.

This is important when you're trying to understand how you stack up against your competition's inventory.

You can also use assortment data to identify new opportunities where you're the only seller. In this case, you might sell out of these products faster than you previously anticipated.

Remember, having poor inventory levels can seriously hurt your chances of earning the Buy Box, so stay on top of it.

Assortment data, when delivered in real-time, can also help you identify competitors who are "in hot pursuit."

You can spot competitors who recently began to carry the same products as you, and you know that you're about to face stronger competitive pressures from these sellers.

You can get a head start and plan accordingly. Knowing the differences between where you're the only seller and where you have a lot of pressure is important when it comes to your pricing strategy.

Pricing data

Price is one of the most important factors that goes into Amazon's mysterious Buy Box algorithm.

Since the marketplace has a reputation for low prices, you know that it's important to stay competitive.

But pricing data can keep you from going too low and hurting your margins to get a sale. When you use an algorithm to find a price, you can discover one that also takes your seller rating and inventory levels into account to earn the right Buy Box price.

Combining pricing data with assortment data can help you capitalize on times where you're the only seller of a product.

It can also help you stay extra competitive when you're going toe-to-toe with dozens of other competitors. Because when you have pricing power over the competition, you can command a premium price and earn more. 

You've won it, now what?

If you land in the Buy Box, then congratulations! While you can enjoy a victory lap, make it a quick one because Amazon will cycle you out no matter what you do if there are a lot of competitors.

That means you have to stay on your toes at all times and get ready to change your price at any given moment.

But while you're enjoying your time in the Buy Box, you can increase your price incrementally over time to maximize profit. Once you lose it, reprice lower.

Unless you're the only seller of a product, in which case you're going to have the ability to command a price premium.

If you've enjoyed your Buy Box ownership and no one has overthrown you in a week, then maybe a 1% increase can be justified. Setting up a repricing algorithm to do this is the best and most effective way of going about this.

Winning the Buy Box can take a lot of work, but that doesn't make it impossible.

Let data guide you to the Buy Box and make sure you keep your seller rating satisfactory by having an awesome fulfillment process or signing up for FBA.

Once you have this in place, you can let data guide your pricing and assortment decisions that will boost you into the Buy Box.

For more on this topic, see:

Ari Shpanya

Published 19 April, 2016 by Ari Shpanya

Ari is the co-founder of HomeShare and Zent , Graduate of the GSB Stanford Ignite program, and a contributor to Econsultancy.

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Comments (1)

Paul Tebbs

Paul Tebbs, Account Manager at Econsultancy, Centaur Marketing

All things being equal, having your products fulfilled by Amazon is another factor that helps sellers win the buy box.

Whilst it's true that Amazon retail can occasionally go out of stock of popular products / is unable to source them, these opportunities are few and far between.

As a general rule, I'd advise only selling products on Amazon for which you have exclusivity rights. Otherwise, the moment the products get popular (typically 1,000+ sales / month), Amazon retail will source the same product and typically will beat you to the buy box.

Source: I previously worked for Amazon UK Merchant Services :-)

almost 2 years ago

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