Building a business around Amazon’s “Buy Box” is a road to ruin. Here’s why.
Last week, panic went through the Fulfillment by Amazon (FBA) selling world when the Buy Box for books temporarily vanished from Amazon product pages.
Panic ensued. Read Amazon seller forums, and there was candid conversation about people literally laying off employees, shutting down their accounts, and pulling their kids out of college over this news.
Then a few days alter, the Buy Box reappeared, and everything returned to normal.
This is a good time to say publicly what I’ve been saying in private for several years:
“You should not base your Amazon business around the Buy Box.”
More fundamentally: You should not base your business on what you cannot control.
Especially the Amazon Buy Box. Amazon can and does change the Buy Box formula often, capriciously, and without warning.
What happened last week was just a sample. Sellers were also put into turmoil earlier in the year when Amazon’s Buy Box formula seeminlgy went crazy. Many sellers who had relied on it for some time suddenly were no longer eligible. Some sellers saw their eligibility change several times a day.
My message in this article is that you should not build a business around the Amazon Buy Box for three core reasons:
- The Buy Box is inherently a game with many losers but only one winner.
- The Buy Box is volatile.
- The Buy Box can be influenced but never controlled.
Conventional Amazon seller wisdom goes like this:
“Success as an Amazon seller depends on winning the Buy Box.”
The Buy Box is the prom date we all want, but it only goes to one “lucky winner” (at a time). It doesn’t mean you don’t go to the prom, you just work with the options you have.
If everyone jumped ship from Amazon because they didn’t have the Buy Box, no one would sell on Amazon. Because no one gets the Buy Box all of the time. And no one can control when they do. It just makes no sense.
So if you base your Amazon hopes and dreams around the Buy Box, here’s the future you’ve signed up for:
- Emotional turmoil whenever another “less worthy” seller get the Buy Box.
- Constant confusion about why someone else has the Buy Box when you don’t.
- Being caught in an endless loop of chasing your tail to “win” the Buy Box.
- Being at the whims of Amazon’s secret Buy Box formula that they’ll never share with you.
- Your entire business hinging upon something you have a small ability to influence but no ability to control.
How Amazon sellers should look at the Buy Box
“An awesome cool bonus thing when Amazon gives it to us, but we should never expect it or rely upon it.”
We do those things within our power to increase the odds we are Buy Box eligible, then consider it gravy when we get it.
As Amazon sellers, that’s all we can – and should – do.
Who gets the Amazon Buy Box?
As with all of Amazon’s algorithms, no one really knows the formula. But we can assume it is based on some or all of the following:
- FBA or not.
- How long you’ve been an FBA seller.
- Item condition.
- Item price.
- Offer quantity.
- Seller refund rate.
- Seller’s account standing (feedback, etc)
- Sales volume.
…and probably many more. Again, no one knows the true formula.
Can you “game” the Amazon Buy Box?
You can’t trick it into submission. And even if there was a way, there’s a thousand sellers much bigger than you would write programs to game it better than you.
You can increase the odds you’ll get the Buy Box. But this is not control. This is the illusion of control.
It’s not just a matter of the lowest price. You will frequently see the Buy Box go to sellers who don’t have the lowest price.
It’s not just feedback score. You will frequently see the Buy Box go to sellers with a worse feedback score.
Ultimately the power is in Amazon’s hands. Basing your business on the Buy Box is like basing your business around the weather. You can do a rain dance, but it doesn’t mean it will rain.
Theory: Randomness may be what really controls the Buy Box
As one of my many eccentricities, I am always binge reading on some weird subject I have no business caring about. I did that a couple years ago with algorithms, and one item stood out from that research that is relevant to Amazon sellers:
Good algorithms have an element of randomness built into them so they cannot be tricked, gamed, or reverse-engineered.
It is extremely risky (actually suicidal) for Amazon (or Google with its search results, or whoever) to have a formula that can be reverse-engineered. Then the system could be “tricked,” and the Buy Box would always go to the tricksters.
Ever see an offer that has the Buy Box and think:
“Wait a minute – this seller has worse feedback than me, their book is in worse condition, and their offer is priced higher than mine. How do they have the Buy Box?”
That’s an extreme example, but it does happen. And a built-in element of randomness in Amazon’s algorithm may be to credit.
This further reinforces the reality that as third party sellers, we have no real control.
Warning: This is not a “Buy Box does not help sales” argument
The Buy Box does boost sales. I don’t believe it does nearly as much as people say, but it does help. So it is not irrelevant.
I have been guilty of repeating speculative “statistics” like: “80% of all sales happen through the Buy Box.” Fact is that these numbers are made up 100% of the time. No one knows the real number. It’s all a guess.
What’s more, the actual figure will vary wildly from category to category, even product to product. For example, we can safely assume a dramatically larger percent of sales are through the Buy Box in the Computers category than Books. The former is more heavily trafficked by buyers with money, who are are more likely to check out through the Buy Box (vs searching for the lowest Prime price, or lowest price overall) than in Books.
For this reason, I think the Buy Box matters for Books less than most (if not all) other categories, but it is not my intention to say “the Buy Box does not matter.”
It matters in the way your preferred prom date matters: Make yourself as attractive as you can, but the ultimate decision is not yours to make.
Buy Box dependents: It gets worse for you
Let’s say you do everything right. Impeccable feedback score. Impeccable pricing. Low returns. Everything is perfect.
Amazon still isn’t rolling out the red carpet for you. Anytime there are multiple Buy Box eligible sellers, Amazon tends to rotate through them, giving the Buy Box to each for however long (or short) Amazon chooses.
So even when you win, you don’t really win.
The three reasons you should not rely on Amazon’s Buy Box
- It’s a zero sum game. Only one winner (at a time). Only one person wins, everyone else loses. Welcome to the worst odds in the universe.
- You should never base your business on something so volatile. You have the Buy Box. Then you don’t. Then you do again. And just when you think you have Amazon’s formula figured out, they change it. You’ve just gone on an emotional roller coaster before you’ve even had breakfast.
- You should never base your business on something you cannot control. Amazon can take your Buy Box eligibility away at any time, with no explanation. Amazon doesn’t even owe us the existence of a “Buy Box.” It’s a castle of sand.
PS: If you disagree, jump in the comments below.
PPS: After my Amazon Altitude product launch last month, I’m not about to fill your inbox with more “new product” news. But I just did a complete overhaul of Book Sourcing Secrets, and relaunched it as an extensive video course.
This is it: Every source of cheap books to sell for big profits on Amazon, in over six hours of training.
PPS: Drum roll for some big news if Amazon trade-in is your thing. Another announcement coming…