Contributors: Keith Anderson (Profitero), Christina Vail (Profitero), Sarah LaVallee (Channel Bakers), Andrea Leigh (Ideoclick)
When you are selling your product as a 1P listing on a marketplace retailer, any moment you’re not winning the Buy Box is a moment you’re losing sales. Therefore, it’s important to both prevent it from happening and respond quickly to win it back when it does happen. In addition to sales loss, losing the Buy Box can jeopardize your brand, since the 3rd party seller winning the Buy Box often has the ability to overwrite content on the PDP. They may also provide a less satisfactory experience to your end consumers in the form of missed shipping deadline, damaged packaging and even damaged/expired goods.
Diagnosing the issue
The first step in winning back the Buy Box is to determine why you may have lost it in the first place. Retailers use automatic algorithms that are triggered by certain events to determine who owns the Buy Box. A few common issues that may be causing you to lose the Buy Box include:
- Availability - Your product is not able to be shipped right away using 1P fulfillment - e.g it’s out of stock in Amazon’s warehouses and the only way a customer can receive it is via a 3rd party seller. Additionally, the Amazon Buy Box algorithm is geo-targeted and availability is catered to a consumer’s specific locale, so whichever vendor can get to their location the fastest will be primarily listed.
- Price - Another seller has a lower price for the same item. This can happen when you don’t have tight control over your distribution network or MAP in place, allowing 3P sellers to purchase products at a cost lower than what you’re selling it to the retailer for.
- Profitability - Your item is not profitable (also known as Can’t Realize a Profit, or CRaP) for the retailer or another seller is more profitable (i.e. due to size, weight, margin, sales velocity, etc.)
- Convenience - Another seller is able to offer quicker shipping, or is Prime eligible
Having a trusted list of resellers is key. Possibly even interview them to ensure there’s a relationship and trust between manufacturer and reseller. -Andrea Leigh, Ideoclick
Resolving the issue
After figuring out why you have lost the Buy Box, you have to tailor your strategy for resolution based on the reason. Here are a few suggestions and best practices for winning back the Buy Box:
- Stay on top of inventory - If your product is consistently out of stock, you will need to learn how to get ahead of demand. Employ an effective tool that predicts demand for all of your products, so that you can stay in stock even during events like promotions, online shopping holidays and popular trends. If this continues to happen, consider increasing fulfillment orders or keeping a larger amount of backstock if possible.
- Fix supply chain issues - Sometimes, inventory issues are not completely in your control and involve going back to the supply chain system to find inefficiencies. Common supply chain issues include:
- Missed manufacturing deadlines
- Resources or materials become unavailable
- Stuck shipments or unreliable transportation companies
- Brand and supply chain managers are not communicating effectively
- Inventory forecasts are incorrect
- Run a promotional campaign - Instead of lowering the price of your product permanently, which only hurts your brand in the long run, consider running a promotion. Offering a discount on your product makes the price more competitive, without touching listing prices, and increases your chances of winning back the Buy Box.
- Enforce MAP policies - If the seller offering a lower price is below your agreed-upon MAP price with the retailer, take action on the violation. Get the violating product listing resolved or removed to win back the Buy Box. This can be done by reaching out to the retailer directly with proof of the violation or reporting the seller yourself for violating guidelines.
- Do your pricing research - In order to get ahead of profitability challenges, you need to do research on what the market and industry standards are for price. Since marketplaces like Amazon algorithmically decide prices for their products, which then influences the Buy Box, you should know what prices to offer in order for everyone involved to make a profit. This type of upstream thinking can predict profit margin issues before they occur.
- Solve profitability challenges - Determine what is causing your product to not gain enough profit and resolve them if possible. Some factors to explore if your product is not profitable include:
- Low conversion rates and product page traffic
- Price-to-weight ratio, or the bulkiness/heaviness of your item
- Additional handling or packaging your item requires
- Late or inaccurate shipments
- Use a hybrid 1P/3P distribution model - If a product is having profitability issues, using a hybrid 1P/3P seller model may fix it. In these instances, you sell your products to 3P vendors who then set prices accordingly, instead of Amazon, so the profit margin can be widened. When you have greater control of the listing and the sellers for each product, you have greater control over the average prices to solve profitability challenges.
- Enroll in convenience-boosting programs - Finally, if your items are not already enrolled, do research to help your brand become involved in convenience offerings, like Amazon Prime and Walmart 2-Day Shipping.