Amazon’s Buy Box – The Place to Be Watching

What is Amazon’s buy box? Simply put, it’s the place on the product page where the default seller and 3 other top sellers appear. Amazon takes into account things like price, seller rating, inventory availability, and fulfillment options[1] when determining which sellers end up in the buy box and which don’t. Depending on the source you consult, somewhere between 82% and 90% of all sales on Amazon are from sellers in the buy box. Clearly, it’s a reasonably competitive space for retailers.

Why the Buy Box Matters to You, the Manufacturer

While the buy box might be considered primarily a retailer’s realm, it’s actually something you should be keeping a close eye on. Because it’s so competitive, and because price is a major factor affecting which sellers show up in the buy box, there is a lot of incentive for retailers to keep lowering their prices. They may lower them so much, in fact, that they violate your minimum advertised price policy.

Think about how quickly this could become a major problem for your brand. Once one seller violates MAP and “wins” the buy box, other sellers will immediately begin dropping their prices even lower in an attempt to take over the winner’s buy box position. Without any policing, this results in a situation in which your brick-and-mortar sellers become unable or unwilling to compete and could even cause your product to lose value in the eyes of consumers. If they can obtain it for a fraction of what it’s actually worth, it’s no longer actually worth that amount at all and is no different from other options on the market.

What Can You Do to Prevent This?

There are two crucial pieces of strategy you’ll need to implement to keep the buy box from causing these problems. First, you must aggressively and consistently enforce your MAP. Monitor vigilantly and move fast whenever you find any MAP violations. Don’t hesitate, don’t be lenient. Follow your policy to the letter and send sanctions immediately. This will keep your physical retailers from distrusting you – they’ll know you don’t tolerate violators and that you are upholding your policy for everyone equally.

Second, you’ll want to methodically weed out unauthorized third-party sellers. These are the retailers that have not agreed to follow your MAP policy, and they’re the ones who will potentially be undercutting both you and your trusted sellers. According to Nathan Grimm of Multichannel Merchant, Amazon won’t help you in this regard. Amazon doesn’t remove sellers or enforce prices. But “[m]any third-party sellers will disappear as they run out of stock.”[2] Although it might seem risky to cut out so many distributors who are promoting your products, in fact, more sellers on Amazon is not an asset of any kind. Remember those statistics about the buy box? Upward of 82% to 90% of all sales on Amazon are from the seller who has won the buy box. So, no matter how many other sellers are offering your products, they are not likely even to be noticed by the consumer.

Set yourself up so that the sellers in the buy box are your trusted retailers who follow your MAP policy, and you’re setting yourself up for success on Amazon and beyond. Learn about a manufacturer who is following this strategy and is anticipating positive results in this case study.

[1] Amazon.com. (2016). Increase your chances of winning the Buy Box. Retrieved from http://www.amazon.com/gp/help/customer/display.html/ref=hp_rel_topic?ie=UTF8&nodeId=201687830

[2] Grimm, N. (2014, July 15). How to win the Amazon buy box every time. Multichannel Merchant. Retrieved from http://multichannelmerchant.com/marketing/marketplaces/win-amazon-buy-box-every-time-15072014/