Building a business around the Amazon Buy Box is a road to ruin. Here’s why FBA sellers should stop trying to win the Amazon Buy Box.
FBA sellers are literally addicted to the Amazon Buy Box
One day recently, panic went through the Fulfillment by Amazon (FBA) selling world when the Buy Box for books temporarily vanished from Amazon product pages.
Panic ensued. If you 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 Amazon 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 FBA business around the Amazon Buy Box
More fundamentally: You should not base your business on what you cannot control.
Especially the Buy Box. Amazon can and does change the Buy Box formula often, capriciously, and without warning.
What happened recently was just a sample. Amazon sellers were also put into turmoil earlier in the year when the Amazon Buy Box formula seemingly went crazy and made many sellers Buy Box ineligible. Many sellers who had relied on it were plunged into panic. 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.
Why conventional FBA wisdom is wrong
Conventional Amazon seller wisdom goes like this:
“Success as an seller depends on winning the Amazon 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. So chasing the Amazon Buy Box makes no sense.
So if you base your 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 “wins” the 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 “hack” the Buy Box?
You can’t trick the Buy Box 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 who wins
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.
Yes, the Buy Box does matter
Warning: I am not making a “the 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. Maybe it’s accurate, maybe it’s not. But all statistics are 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.
More bad news for Buy Box addicts
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 the Amazon 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.
-Peter Valley
I have never even thought about the BB when pricing a book, and have only checked a few times to see whether I even had it or not. And, I never had a prom date either, lol.
It’s ok, I didn’t go to prom either.
I seem to sometimes win more often because my inventory appears to be larger, at least for products other than used books. Maybe AMZ just wants to empty their warehouse space?
I like a situation where 2 or 3 of us are at the same price and the Buy Box is passed from one to the next one on an almost daily basis, or so it seems. I am happy sharing as long as I get my turn.
Agreed. And even if the Buy Box has no randomness at all, it likely uses information that you and I can’t access. For example, the Buy Box might be given to sellers with items in overstuffed warehouses, to make room for incoming inventory. Or for other reasons that are visible to Amazon but not to us.
Since we don’t have this information, it’s simplest to assume that it’s random. For us, it works out the same. That holds true until you’re so big that you’re allowed to peek behind the curtain. That’ll never happen to me!
I suspect the Buy Box is also based on location.
It could sometimes benefit Amazon to sell an item that is closer to the buyer – lower shipping cost and faster delivery. So perhaps for a shopper in CA, the item in the Buy Box is one that’s in CA or an adjacent state, while a buyer in the other side of the country might be shown an item that’s in their region. I can’t prove that by myself but I’ve always wondered if that’s a factor. Do we know if the Buy Box is the same for every buyer at the same time?
You’re right, there is a location element I neglected to mention. Good catch.
Removing the buy box altogether … at least the playing field is leveled AMONG 3P sellers. But NOT when eligibility was given/taken sporadically.
Really, the buy box does make a difference. Like it or not, understand it or not. When it was taken away, sales went down. Many, many sellers noted this.
It can’t be ignored, really, when you see your sales fall when it is taken away. Deal with it, suffer it, sure, but you can’t pretend it does not make any difference. If it goes away altogether, then we can ignore it.
I agree it should be focused on only to the extent it can be influenced (which is very little).
When I have bought books–as a bookseller or an individual, I look at the buy box choice. I read the descriptions for the exact value I need and the BB choice seems like a bizarre choice. So I don’t consider the BB for books as a seller either.