Howdy! [ Register | Login | Forums ]

Multichannel eCommerce Software
Amazon Amazon Buy Box

Published on July 17th, 2012 | by Matthew Ogborne

53

The Amazon Buy Box – You know the Secret Formula Right?

Amazon UK

If you’ve not read this article before, then you’re in for a treat as the Amazon Buy Box pretty much obey’s the formula and has been proven to do so time and time again.

If your new to Amazon, then in short the holy grail of Amazon is the blue buy box and if you’ve not come across the buy box before, you cannot miss it, it’s blue and on the right hand side of almost every product on Amazon.

Hey, they’re infectious! There is one over to the right :)

When there is only a single seller fighting for the buy box, there can only be one winner, but when there is two or more sellers, then assuming that everything is even, you can win the Amazon Buy Box with the formula in this article.

The Amazon Buy Box Factors

However there is a but… This assumes that everything is equal and we know that nothing is ever a level playing field, especially when it comes to marketplaces and Amazon, well is not always even either (see this article Why do eBay Sales Stay Consistent? for further reading).

There are many factors that influence who gets the buy box on Amazon and ChannelAdvisor points out the obvious in their help file,  as a reference, I have put an amended table below.

FactorWhat Amazon is ConsideringWinning Practices
Featured Merchant StatusHow trust worthy you are based upon account history.Being noticed by the Amazon account managers.As ChannelAdvisor suggest, it doesn’t hurt to ask Amazon support about your “Featured Merchant Status”
PriceWhat is your product price? What is your shipping charge?Low total price, including product price and shipping
AvailabilityHow many do you have in stock? How quickly can you ship?Quick and consistent fulfillment
VolumeDo you sell many of this product?Consistency
RefundsHow often do you issue a refund for seller error?Low refund rate
Customer FeedbackHow do customers rate your service?Low negative feedback ratings
Customer SupportHow quickly you deal with customer queriesAnswering in less than 24 hours, 7 days a week (yes that’s weekends included)
A-to-z Guarantee ClaimsHow often do you get returns?Low A-to-z claims

A Special Note on FBA

But that’s not all, because we have not included the “motherload” which is “Fulfilment By Amazon” AKA “FBA”.

FBA means that the seller has one or more of their products in Amazon’s fulfilment centres and because Amazon have it, have verified it’s condition and knows it can get the product out to its Amazon Prime subscribers, then it promotes FBA held items heavily against seller fulfilled items and routinely it’s going to take a hefty price difference to shake FBA products out of the buy box, or is it?

The Amazon Buy Box Rule?

If you have had a slap from Amazon, whether that’s an account warning or a suspension and very worryingly even if it was not your fault and a mistake on Amazon’s part (we have this documented in a support email back from Amazon) then this can count against you if everything is even.

But course your business exceeds in every area on Amazon, you are the perfect seller, well second to Amazon that is, so for the following to work, we’re assuming that everything is level.

So to the “Amazon Buy Box Formula”:

(Lowest Selling Price – 2.7%)

- £0.01
= The Buy Box, For Longer

By taking away 2.7% off the lowest selling price (including postage) and an extra penny, you receive the Amazon buy box for much, much longer.

It took me ages to work this out, testing, refreshing over many days its this worked out to be the lowest % and value I could get trigger the buy box and for it to stick.

The minus one penny is in the formula for the lower priced goods in the sub £20 area, it always seemed to take that extra penny to kick the box into action.

There are a few clauses, on the accounts I tested this out on, they were ALL of a great standing with Amazon, no major issues and all had long track records of great service. The other is none of these accounts were using FBA (Fulfilment By Amazon). FBA is a lethal advantage as I mentioned above, to shake FBA items takes a little bit more.

Also none of the products that were tested on were over £50, I am sure there is alterations in the trigger for the buy box, the percentage is likely to be a lot less than 2.7% at these levels.

Your Feedback

I would like for you to try this on ONE product for ONE day and let us know your results.

I know that several of the readers here have used this formula to great success over the past year since I first published this article, what I’d for you to do is try it for yourself for a day and let me know your results here by leaving me a comment below.

Alternatively if you have been using it, let us know your feedback as the formula does move around in different categories and price brackets, again let me know in the comments box and of course if we lost you anywhere in this article, don’t hesitate to ask in the forums.





Want More Plain-English Advice?

Want more eCommerce tips from Matt learned over a decade of working as, for & with the largest marketplace businesses that are in Plain English delivered to your inbox?

If Yes! Enter your details below:

Your Name:
Your Email Address:
PS. I hate spam more than you

53 Responses to The Amazon Buy Box – You know the Secret Formula Right?

  1. Rebecca says:

    Hi Matthew,

    We are working with Channel Max too and would love to know how to set this formula and if the formula still works.

    A response would be appreciated,
    Thanks!
    Rebecca

    • Hi Rebecca,

      I used the same formula for similar priced items on a repricing tool a couple of weeks back, works great and they’ve seen a decent increase in sales.

      As for the settings in ChannelMax, it’s best that you speak to the team there to set this up for you.

      Matt

  2. Greg says:

    Almost forgot, the reprice is different if Amazon is on the listing vs if Amazon is not on the listing for the item.

  3. Greg says:

    Formula is different for FBA sellers vs non-FBA sellers.

    Non-FBA Sellers the percentage is much greater. Amazon wants to keep the sales in house as much as possible. It makes them more money. I can be as much as $2.00 higher on my items and still retain the buy box from a Non-FBA seller.

    Amazon changed this about 9 months ago. It use to be FBA and Non-FBA followed the same rules. Amazon made it so Non-FBA is the last resort for the buy box.

    Yes, I automatically reprice. I have developed my own algorithm and I can retain the buy box for at least 12 hours of a 24 hour day. Once Amazon figures out you have the buy box, they will reprice and take it back.

    It use to be that Amazon would wait for you to sell the items before they would reprice and take it back. That is no longer the way. It’s all timing, and as servers get quicker the time you get the buy box for will be shorter and shorter.

    The 2.7% for an FBA seller is way to much. You’re giving away too much of your profit. That’s all I’ll say.

    I have worked on my algorithm for over 4 years. I have seen the changes that Amazon does to the formula for the buy box.

    It was much easier 4 years ago to keep the buy box.

    Pricing low and lower isn’t a win situation for vendors on Amazon. You are fighting Goliath, David. You can only sell at a loss for so long before Amazon will put you out of business.

    You need to think about it. What is Amazon doing to you? They are pushing your price further and further down. They are eliminating competition. You need to use this against them. Instead of letting them control you, you need to control them.

    Who wins when it comes to Amazon? The person with the most inventory. That is the person in control. If Amazon has 100 units and you have 200 units. You have the advantage. Albeit, the item you are selling needs to be in high demand.

    The issue is Amazon hides how much inventory they have by using the 999 number. If you could see actual numbers on Amazon you could time it too fill your inventory when they are about to run out. It’s easy to determine how many they sell per day. You can easily determine then when they will run out, then check with the vendor to see how many they have left and when their next shipment is. Buy up all the inventory so Amazon doesn’t get any and you’re in control.

    You can push their price low and make them take the loss. Once you deplete their inventory, raise your price. Works very well during the Holidays.

    Amazon is about volume. Volume means discount pricing. You’re not going to get full retail on a product and do volume. There are too many other avenues to obtain the item cheaper. Once the consumer has seen an item at a cheap price they are less likely to buy at a higher price ever again. Which means, lower volume at a higher price.

    If an item normally sells at $19.99 and Amazon is selling it for $14.99. What happens when Amazon runs out and you raise your price back to $19.99? Volume slows significantly. The consumer knows, they will buy something else.

    Now, it has come to the point Amazon is letting their vendors be their enforcement. Vendors are no longer selling to anyone with a web page or will cut you of if you sell on the Amazon network. Amazon is controlling the market place blaming FBA sellers for prices being so low.

    They will soon realize that Amazon is the ultimate cause and be controlling who sells on Amazon, they are giving too much power too amazon that is controlling the cash flow to their businesses.

    Amazon is very cut throat. If you are not on the Amazon pay roll, then you are just a disposable tool. They use their resources until they are all dried up and kick them to the curb.

    This is what will happen to Vendors that don’t diversify their sales. Come the 2nd – 3rd week in December, if Amazon has too much of a vendors merchandise, they will mark it down up to 75% off retail, that is cutting below the wholesale price. Because they need to get rid of their inventory before the end of the year and will want to clear their warehouse.

    If the vendor complains to Amazon, they will put them off for 2 weeks before they get back to them and make the excuse that they were so busy it took extra time to get back to the vendor. Meanwhile, consumers have seen the price of the item very low. They will never pay full price again for the merchandise. Amazon may and can ruin a company and their product line by relieving their inventory at the end of the year.

    MAP pricing is a dysfunctional bi-product. More and more companies are going to it, but in my opinion it is price fixing and the consumer loses out because the vendor eliminates competition. One day a law firm will file a class action law suit against any company that uses MAP pricing. It is controlling of the free market place.

    In conclusion, it’s about control. The person with the control has the power and yes, it is possible to have control on someone else’s server.

    Stepping down from the soap box.

    Next.

  4. Edward says:

    If the formula works, once I reduce my price down by 2.7%, then other competitor reduce it again by 2.7%, wouldn’t it be price wars where at the end, amazon is the only one who wins?

  5. rowan says:

    Hi Matt
    I used to have the buy box on my products on amazon but its gone and somebody else has taken in, i have read what u have asked to do taking the 2.7% off and i have still don’t have the buy box .I am selling mine for 9.99 + 2.95 as postage and the other seller is selling for the same price and i have got a better feedback but he has still got the buybox. Please help .

    Regards
    Rowan

    • Hi Rowan,

      The buy box is not 100% of all of the time, Amazon will rotate it, especially if the sellers are close.

      The 2.7% + 0.01 is to knock the buy box to your favour for a lot longer, if you are the same price as the nearest competitor as you suggest, then the buy box will just rotate over time. Assuming that neither of you are using FBA that is, as the rule above does not apply when it’s FBA items.

      Matt

  6. jimmy says:

    Hi Matt

    Your Formula is working , its unbelievable . i still cant believe it happened .. i am in BUY BOX .

    Many Thanks for sharing this ..

    Jimmy :D

  7. mark says:

    FBA is 100% working for me, one item I was selling at £3.89, and another seller appeared, so i dropped the price and the other seller did the same, within 2 days the item was £3.49, and I was only selling half as much, so I sent product to amazon and on FBA I am now getting £3.99 and 100% buy box every-time. Now the sales of that item are 4 times what they were in the first place!

  8. Murat says:

    I have been trying different methods to win that buy box and funny and i had funny results with a few items. One of my item was costing me £3.99 so i was trying to sell at £5.95 or over but i wasn’t getting any result due to 11 competing seller for the same buy box. So i slowly started to dropped the price but no joy. I was so angry i just wanted clear the stock i have so i dropped it to as low as £2.95. For about 3 months i sold only 2 items. Then some voices in my head told me to write this stock off and bump the price to £7.99. And weird thing happened i started to sell 2-3 items a day at highest price. Where sellers there selling it as low as £2.79 . It seemed to work in a few more items that i sold. I have no explanation and i am not complaining

  9. Joe says:

    I am big seller in the health & Beauty industry on Amazon.

    I have the buy box on many item’s, but the fragrances that amazon them self’s sell no matter what percentage I lower it by even 3.2% they still get the buy box. Is there any ways to beat that ?

    Also can you please contact me to my personal email address thank you

    • Howdy Joe,

      Yes, this only works when it’s one merchant against another, FBA and Amazon directly, it won’t work and you’ll need to drop a decent amount to grab the buy box and even then it’s not guaranteed because Amazon will always favour FBA and their own stocked products.

      I’ll also shoot an email over to you now too.

      Matt

  10. Stewart says:

    Hi Matt, would you mind emailing me how to set this formula in Channel Max. I’m not sure where the -1p is set.

    Best Regards.

    Stewart

    • Howdy Stewart,

      I’m not sure either, so I’ve emailed Paul at Channel Max directly to ask.

      Matt

      • Not sure if this will copy across here, but try this in box 1

        **You can put a negative amount to raise the price.
        (a) Competitive Adjustment Amount (ex 0.01 for 1c)
        Amount by which you want to lower your offer than your competitor.
        OR
        (b) Competitive Adj Percent (put 5 for 5%, not 0.05):
        Percent by which you want to lower your offer than your competitor.
        If you put percent, amount will be ignored.

  11. vkp says:

    Hello
    I have tried but does not work.only fulfilled sellers listing comes up on buy box. For example.
    lowest selling price is £5.49. so I kept the price £5.49 – 2.7% – 0.01p but still my listing does not come up.Even though Cheaper and have having better feedback rate.

  12. Pingback: Q&A Free Delivery Versus Reasonable Delivery Costs On Amazon - The Last Drop of Ink

  13. Greg Black says:

    [Feedback] – Okay so I took one of the Amazon accounts under my care and identified 124 lines that were set to 2% below, were lowest price, but weren’t winning the buy box. I amended the 2% to 2.7% (unable to add the penny) last night, about 16 hours later the account has gained an additional 100+ buy box positions. I will wait to see how many stick over the following few days. Great tip. I certainly wouldn’t advise anyone to blanket reduce their bidding, but targeting it to products that are close to winning the buy box makes good strategic sense, you can get a significant uplift in sales with minimal margin erosion.

    • Howdy Greg,

      I’m glad to hear that it’s working for you.

      Oh totally, it’s not meant to be used on all products and as you note, not at the expense of 0 or negative profit, sometimes, it’s just best to let cheaper items to sell through.

      Matt

  14. wayne says:

    Hi Matthew,

    I have a listing on amazon for 2.00 and 99p for delivery, I dont understand if i knock of 2.7% of the delivery price and the actual item? (i’ve applied the formula for the listing and its now its £2.97 +99p delivery) but i’m still not in the buy box, im sure i’m doing it wrong?? please help :)

    • Howdy Wayne,

      So if you item is 2.00 and the shipping is 0.99, that give us a total of 2.99.

      Assuming that your competitor(s) is there at 2.99 also you take 2.7% off the total price, as it is sensible to tweak the item price and not the postage, the item price should now become £1.91

      (that is 2.7% of 2.99 = 0.0807 + 0.01 = 0.9, so 2.00-0.09 = 1.91)

      Try that and see what happens.

      As noted in the article, this is also assuming that you have access to the buy box and things are pretty much even between you and your competitor(s).

      Matt

    • Justin M. says:

      Hey Wayne,

      Assuming your customer metrics are similar — you need to combine the total cost of the item+shipping and then subtract 2.7% +1 penny from that amount.

      So if the current Buy Box is $2 + .99 shipping. You’d have $2.99 – .09 = $2.90 total.

      If you still want to have the .99 shipping you would then subtract .99 from 2.90, so your listing price will be 1.91 + .99 shipping and you should win the Buy Box.

  15. The #Amazon Buy Box – You know the Secret Formula Right? http://t.co/F7MiOJqX <=Still works

  16. Julie Powell says:

    We tried as you suggested Matt and it worked!!

    We sold 4 items more than we normally do yesterday and I tried this on some more amazon listings and we already have had more sales this morning than normal. We are using repricing software to do the maths for us so we don’t make a loss, cannot wait to the sales tomorrow as we have hundreds of listings.

    Thank you Matt.

    • Simon says:

      Hi Julie,

      You sound surprised? Since Matt showed me this over a year ago, i have been using it ever since and my amazon business has been doing exceptionally well.

      Some items i cannot compete on, so i do not try. Matt’s other suggestion of using channelmax has helped me greatly as i can process the rules on pricing and allow channelmax to do the grunt work for me.

      He also spent around four hours working though minute details with amazon with me and I feel this is why we are doing so well. After moving into FBA in January, the pricing rules needed to be profitable are slightly different, I am very sure Matt knows these, but he doesn’t appear to be sharing, I suppose he has to keep some secrets to himself after all.

      Simon

  17. Change ONE product’s pricing on #Amazon for ONE day & see if you get the #Results too http://t.co/Z6e9EVJB

  18. Jamie says:

    I’m fairly sure the formula is calculated in different ways depending on the category and whether Amazon are selling it or not.

    For example I don’t think you can get the buy box in media products unless you use FBA – and if you do use FBA and Amazon also sell it then you must beat them by 20% – that’s what we’ve been told anyway.

    • Howdy Jamie,

      I’m very sure that this works in the media category for non FBA items, try it for a day and see how you get on.

      Matt

      • Jamie says:

        Just gone through a few listings of ours – checking where we’re lowest priced and Amazon neither sells or fulfils – many of them we’re more than 2.7% lower than next price but there is no buy box.

        I’m sure media items are special cases – you never see a buy box for them – even when Amazon doesn’t sell or it’s not fulfilled by Amazon – I know for a fact that those two are criteria for it.

        In fact, I can’t remember the last time that I saw a buy box in the category that I sell in.

  19. The Amazon Buy Box – You know the Secret Formula Right?:
    If you’ve not read this article before,… http://t.co/U6emCzU3 @lastdropofink

  20. The #Amazon Buy Box You know the Secret Formula Right? http://t.co/F7MiOJqX <= TRY this for one day on one product & let us know the results

  21. The #Amazon Buy Box You know the Secret Formula Right? http://t.co/rh4Gv0B3 <= TRY this for one day on one product & let us know the results

  22. The #Amazon Buy Box – You know the Secret Formula Right? – http://t.co/0F6b1IN3

  23. Justin M. says:

    Thanks for this info, Matt. I’ve been testing this myself lately and I’ve arrived at 2.4% being the magic number. This is also for an item under $20.

    I really wish Amazon took the performance metrics in greater consideration. Just today we were knocked out by a competitor with only one 3-star feedback and ZERO history selling our product — where as we have near perfect scores and hundreds of sales. Ouch!

    I’m going to look into FBA as a lethal advantage. I have question, have you had any experience with RAISING your prices? If you felt you had a huge performance metric advantage and you switched to FBA — do you think you could actually raise your prices a bit and maintain the Buy Box?

    Cheers!

    • Howdy Justin,

      Oh Sweet!

      FBA can be used in a couple of manners, one of which is to obtain a higher price. But that only really works when there is little competition or the competition cannot get near your price points.

      Matt

    • Christina says:

      FBA doesn’t guarantee the blue box. I just had a problem with being beaten by a competitor by price, but we had better customer rating and were in stock FBA, whereas the other was from the USA and had a worse rating, but better price. I contacted seller support, and their response was blah blah -metrics, and I replied, but our metrics are better than theirs, at which point they said it was because we had our account suspended in the past (their fault, not ours).

      They don’t mention this on their website, but do say ‘Since seller-performance metric targets can vary by category and are subject to change, we do not disclose specific targets needed to qualify for Buy Box eligibility. Eligibility requires meeting very high standards, and excelling in the qualifying criteria is the best way to work toward achieving this status.’ Nice.

      Anyway, so just being FBA doesn’t always guarantee buy box (but there are loads of benefits to being FBA). I used Matt’s equation today and we won it instantly, though we didn’t really want to compete on price with yanks, as they can undercut us due to exchange rate.

      • Justin M. says:

        Thank you for writing this reply on Matt’s blog, Christina! I was almost willing to take the steps to switch to FBA, but I was really having reservations about whether or not it’d be worth it. I had a gut feeling that price was all that matters (lately?) after some recent experiences I had. It made sense that the big A would favor FBA sellers, but I wasn’t sure how much. After seeing that you have experienced that same thing (having better metrics by every standard, but still losing the buy box just by price) I will continue to just try and compete on price only.

        It’s a shame! Because sometimes it’s the customers who are the most negatively effected by these sort of races to the bottom.

        I know we’re the smallest of the smallest sample. But I wonder if others are seeing the same thing, but not really noticing?

      • Justin M. says:

        Just thought I’d mention, I don’t mean to complain too much :) We love Amazon Sellers Central! But I think it’s becoming obvious that Price is factor 1A, 1B, & 1C. Whether or not this has to do with heat coming from Walmart’s latest web or ventures, it’s definitely a “ranking metric” that has been turned up a few (all?) notches!

  24. jinji says:

    its less then 2.7%, specifically fro high ticket items. I would say 1.2% for items over $1000

    • Howdy Jinji,

      Yes, items over say £120 would need a separate rule for these and especially over £500 or $1000.

      1.2% might be too much at a price point of 1000 or an even field or even not enough for an unbalanced field where FBA and non FBA items are involved.

      Matt

      • SN says:

        Hi Matt – great insight, thanks for sharing.
        If the product price list is higher than 100$ then what would be the percentage used in the formula in this case??

      • Howdy,

        Seeing as $100 is roughly £50, this should still be valid for you.

        The trick here is to test. Pick on one item and see if works at this price point and tinker the percentage until you get the buy box for longer.

        Matt

  25. Pingback: How To: Win the Amazon Buy Box | The Last Drop of Ink

  26. Hi db,

    How glaringly obvious.

    To clarify, its 2.7% off the lowest price including shipping. Thank you for pointing this out, I will update the article.

    Matthew

  27. db says:

    2.7% of what. What do you do with 2.7% of something less a penny?

  28. 2littlemonkeymoos says:

    Are you serious?

Add Comment Register



Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Back to Top ↑

More in Amazon, Business, ChannelAdvisor, Featured Story, Market Places (95 of 308 articles)
Making an eBay Second Chance Offer


Not such a daft question as you first think and in this article I'll do my best to exceed what ...