The Amazon "Buy Box" - What product brands can learn from it.

Understanding the Amazon Buy Box will tell you more about your company than you may be aware of. You may be a start up, you may have an established retail footprint, you may be selling on Amazon already (and you may not even be selling on Amazon at all). Whichever scenario understanding the Amazon "Buy Box" could be giving you insight into many elements of your business.

According to latest figures over 50% of Americans and 40% of UK buyers search on Amazon ahead of Google. Technology is allowing customers to have unprecedented transparency on pricing. In a recent US survey, 96% of buyers said they were influenced by Amazon in the way when they purchased online whether checking prices or reviews. So whatever your view on the platform you'd be a little crazy to ignore it.

What is the "Buy Box"?

Amazon Definition: "The Buy Box is the box on a product detail page where customers can begin the purchasing process by adding items to their shopping carts. A key feature of the Amazon website is that multiple sellers can offer the same product."

Utilising sophisticated algorithms Amazon detects sellers based on a number of factors including, most notably, seller price and seller performance. You may have seen phrases such as "winning the buy box" which relates to how you can be the seller who receives the sale when the "Add to Basket" button is clicked. This assumes multiple vendors offering the product. Studies show that 80% of sales go to the Buy Box when there are multiple vendors for a product, so it's powerful stuff. In most instances the dominant factor for a seller winning the buy box is price, before other factors affect preference.

So what could the Amazon Buy Box tell you?

First of all it can tell you that others are selling your products. Not too inspiring perhaps. This may not bother you if you are getting the wholesale returns you expect for your sales but we have seen over the years that it came as a surprise to many brands. Wouldn't you rather be getting the higher returns yourself? If you are selling to retail stores do you want consistency in your RRP?

As an example, around 8 years ago we were selling our tech products wholesale to a Japanese seller who was looking to grow that market for us. We were selling to Amazon in the US and were marketing in this region. Suddenly products started appearing on Amazon USA and like any channel, when there are two people selling the same product, there was a price war down to the bottom. We were able to track the sales back to our wholesaler in Japan. They were not developing the Japanese market but diluting our North American efforts. We couldn't own the buy box in the USA because of what we were doing in the Far East. Our analytics allowed us to assess the impact of shutting down our deal and we proceeded in stopping the sales through this resource in Japan.

In this modern globalised market you have to be aware of what is happening for your brand in all parts of the world. Can you restrict these parties selling your products? You can but it is important to be aware of who has access to your products and in a perfect world have supply chain controls that can detect who is selling them. In our scenario above we would have weighed up the benefit if the other party had actually been developing the Japanese market for us. We were able to make decisions because our "Buy Box" was being impacted in the US and we could make a supply chain decision in Japan off the back of it.

If you're getting the Buy Box 100% of the time it will hopefully be telling you that you are in control of your brand globally. It gets confused by anti-price fixing in the European Union or Minimum Advertised Pricing (MAP) in the US but those are subjects for another time. If you're in control of your supply chain, legal contracts and maximising revenue this should be reflected in this key piece of the Amazon architecture.

Feedback on your marketing.

Run a campaign on PPC or social media and you may not be seeing it's true impact. For a client recently who had a direct to consumer strategy in the UK we provided insights on their marketing activity.

Their marketing was increasing brand awareness, which we were able to see from their Google Analytics but also we showed them their Amazon data. We were able to show where they were losing margin from a deal they were doing in another European territory. Through analysis of the Buy Box and other contributing data, we highlighted the activity which could provide significant upside to the business. Traffic to their Amazon listings increased at the same time their direct to consumer sales plummeted.

Another company in this instance was benefiting from the marketing efforts of our client. Having the buy box data from Amazon allowed our client to make more informed decisions over both marketing and supply chain.

N.B. Also worth noting at this point is that if you are running headline banners and relying on the Acquisition Cost Of Sale data. Are you aware this is not showing you your sales but all sales of that product. If you have other sellers on your listings and you are using headline advertising make sure to factor in your actual sales.

Not selling on Amazon?

We have many conversations with brand owners who don't want their products on Amazon. Scared by forums or industry conversations. I remember a famous fashion brand saying this a couple of years ago (prior to their win in the German courts). A quick piece of research showed there were 3,500 of their products on Amazon. (Some they hadn't even made themselves.....)

It is also possible for rival companies to tap in to your absence by showing products similar to your own. How is that making your brand look with your customers? If you're building your brand to a notable level on other platforms, chances are somebody is using your brand name in their searches on Amazon.

From analysis of the Buy Box, you are able to see if others are selling your products, the activity of search and take the necessary action to reclaim your sales. Amazon is doing more to help brands from a few years ago and whilst you may not understand some of their methods, you are now better able to protect your brand. Protecting your supply chain is often more important to avoid failure.

If you want to learn more about bringing Amazon data into your channel strategies drop the team a line at www.a8uk.com