It’s probably clear by now that if you want to sell product, you need to have the buy box at least part of the time. There are a few scenarios here.
If you’re doing retail or online arbitrage, it’s safe to say a lot of other people are too. Prepare to battle for the buy box.
If it’s a private label product you created, then the listing — and buy box — are yours. Remember, though, that anyone can jump on a listing at any point, meaning you need to keep a close eye on yours.
If you’re selling wholesale, unless you have an exclusivity deal with a brand (which you should definitely try to obtain), you will very likely be competing against other sellers.
Now, if you’re competing with other sellers, how does the buy box work?
Two big factors determine who wins it:
- Product price
- Fulfillment method
Typically, the seller offering the best price has a good chance of winning the buy box. However, like I discussed earlier, Amazon favors FBA over FBM. Thus, even if an FBM seller undercuts a bunch of FBA sellers, there’s a high likelihood they still won’t get the buy box (unless the FBM price is significantly lower).
What happens when it comes to competition between FBA sellers, then? Is it as simple as whoever prices the product the cheapest wins? Yes and no.
While you can play the whole “race to the bottom” game (read: reducing your price until you’re the cheapest) in order to get the buy box, this is a losing game for everyone involved. Even if you win the buy box, your margins will be garbage.
Instead, you should aim to match the price of the current buy box winner. When multiple sellers list a product at the same price, Amazon rotates them through the buy box.
Understandably, many sellers aren’t interested in “sharing” the buy box. But sharing is caring, and it sure as heck beats the alternative: tanking the price so that nobody makes money.
Amazon loves when its sellers make money, but Amazon also loves making money directly by selling products itself. Thus, it’s not uncommon for the marketplace to see a hot product doing well and jump on the listing.
This is bad news for other sellers because, as you know by now, you can’t compete with Amazon.
Can you control whether or not this happens? No. But you should take care not to put all of your proverbial eggs in one basket by relying on one product for your business’s revenue.
Want to learn more about how to get started on Amazon? Join our Amazon Insiders community and register for our next free training webinar and then continue on to read Part 3, where we’ll talk about product pages and some tips for success.