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HOW TO WIN THE AMAZON BUY BOX
Lisa Byrne
eCommerce Specialist
XSellco
Welcome!
The importance of the Buy Box
82% of purchases on Amazon are made via the Buy Box
Future is mobile with only one option to buy - from the Buy Box winner
Black Friday 2016: Mobile accounted for 36% of total online sales, translating to $1.2 billion in US
Importance of the Buy Box
★ CUSTOMER SUPPORT ★ FEEDBACK★ FULFILLMENT★ PRICING★ GET WITH THE DATA
Contents
Amazon performance metrics
Amazon metrics: minimum targets
Customer
➔ Seller Rating: >90➔ Stock Level: meet demand ➔ Contact Response Time:
<24 hr➔ Perfect Order Percentage
(POP): >95%➔ Order Defect Rate
(ODR)<1%➔ Pre-fulfillment cancellation
rate➔ Late Shipment Rate➔ Valid Tracking Rate➔ Return Dissatisfaction Rate
(RDR) ➔ Customer Service
Dissatisfaction Rate (CSDR)
Feedback
➔ Feedback Score: sum of all feedback - Negative feedback must be <5%
➔ Feedback Count: total number of customers who left feedback. Highest number possible.
➔ Order Defect Rate (ODR): <1%
Fulfillment
➔ Shipping Time: as promised➔ Order defect rate: < 1%➔ Pre-fulfilment cancel rate:
< 2.5%➔ Late shipment rate: < 4%➔ On-Time Delivery: >9➔ Valid Tracking Rate: >95%
Customer Metrics
Customer metrics
➔ Seller Rating: >90➔ Stock Level: meet demand ➔ Contact Response Time: <24 hr➔ Perfect Order Percentage (POP): >95%➔ Order Defect Rate (ODR): < 1%➔ Pre-fulfillment cancellation rate: < 2.5%➔ Late Shipment Rate: < 4%➔ Valid Tracking Rate: >95%➔ Return Dissatisfaction Rate (RDR) ➔ Customer Service Dissatisfaction Rate (CSDR)
Seller rating
Target: As close to 100 as possible, +95 recommended.
Definition: The level of customer experience you provide, scored on a 0 to 100 scale. Each of your orders in the last 365 days is assigned a score, called an Order Quality Score
Impacting factors: The most recent orders have the greatest impact on your overall score
Impacting factors
➔ Feedback➔ Perfect Order Percentage
(POP)➔ Order Defect Rate (ODR)➔ Pre-fulfillment
cancellation rate➔ Late Shipment Rate➔ Valid Tracking Rate➔ Return Dissatisfaction
Rate (RDR)➔ Customer Service
Dissatisfaction Rate (CSDR)
Need to know:
● Perfect orders score: 100 points
● Loss of points for a problem
● A late shipment: 0 points● A-Z claims can result in a
negative score of -500● For multiple issues, the
most significant problem is counted
Calculate the rate: Total order quality scores for last 365 days ÷ Total orders
Stock Level must meet demand
Implications for Buy Box: Amazon won’t award the Buy Box to a seller with not enough stock to meet potential demand
Threat to Seller Rating - customers will leave negative feedback if the sale is cancelled: Pre-fulfillment cancellation rate
Stock level
Contact response time
Definition: Sellers must respond to customer queries within 24 hours as per Amazon Service Level Agreement (SLA)
Minimum target: 90% of responses need to be sent within 24 hours, including weekends and holidays
Calculate: average response times over 7, 30 and 90 days, comparing your speed to your competitors
Need for speed: Customers who receive a response within the 24 hour guidelines leave 50 percent less negative feedback compared to those who receive a later response.
Threats: If you have responded to 10% of customer queries late, you are at risk of losing eligibility for the Buy Box.
Future: Trends toward real-time responses
Tip:
➔ Use templates to speed up responses on your most common queries - cut response times in half with a minimum of 5.
Return dissatisfaction rate
Definition: Valid return requests that have not been answered within 48 hours, incorrectly rejected, or received negative feedback.
Customer expectation: The ability to return purchases, and receive a prompt response and fast resolution.
Aim: Reduce negative feedback, disputes and claims.
Tips:
➔ Speed up response times with templates
➔ Reduce negative feedback: reach out to the customer by taking a human approach - apologize, listen, work to resolve the issue. When resolved, ask the customer or Amazon to remove the negative review.
Customer Service Dissatisfaction Rate
Definition: The percentage of customers dissatisfied with your responses.
Function: Amazon created these metrics to help sellers identify performance strengths and weaknesses.
Penalties: Currently, there are no account penalties associated with these measures but it is likely there will be in future.
Amazon Monitoring: Amazon surveys customers to assess their experience with your service.
Download survey responses to improve your service.
3 Tips:
1. Craft the perfect response2. Personalize your
responses3. Use listings to anticipate
customer needs
The branded approach to winning the Buy Box
Having a known brand allows sellers to easily cross-sell and upsell through follow-up messaging.
Recommend other products related to a customer’s previous purchases in your thank you email, and personalize the experience even further
Amazon cross-selling: ‘More from this seller’
Customers search for brands when seeking items that they associate with a company
Implications for the Buy Box
Amazon's algorithm is rewarding sellers who drive traffic to their Amazon store from other channels - Amazon expert and entrepreneur, Ezra Firestone
Feedback Metrics
Feedback metrics
Feedback
➔ Feedback Score: sum of all feedback - Negative feedback must be <5%
➔ Feedback Count: total number of customers who left feedback. Highest number possible.
➔ Order Defect Rate (ODR): <1%
Positive feedback is essential to selling more and increasing profits.
1 in 10 Amazon customers leave feedback.
Amazon encourages sellers to request feedback
- Don’t directly ask for positive feedback
- Don’t offer incentives for positive review
Tips:
1. Be smart with your timing2. Be selective of who you
ask3. Choose the right products4. Go above and beyond5. Anticipate customer needs
Like a pro: Check out your competitors’ feedback to identify any potential issues with products and resolve problems before they occur.
Reverse negative feedback
Fulfillment Metrics
Fulfillment metrics
Fulfillment
➔ Shipping Time: as promised
➔ Order defect rate: < 1%➔ Pre-fulfilment cancel rate:
< 2.5%➔ Late shipment rate: < 4%➔ On-Time Delivery: >97%➔ Valid Tracking Rte: >95%
Reduce the risks of an A-Z claim
1. Ship promptly using a reliable shipping company
2. Use tracking on all orders - provide the buyer with these details on dispatch confirmation.
3. With high value items, request signature confirmation with the tracked delivery, or insure the postage.
Methods of Fulfillment
FBA - Fulfillment by Amazon
FBM - Fulfillment by Merchant
Fulfillment by Amazon
Benefits of FBA
1. Save space - scale your business with Amazon’s facility to store large quantities
2. Save time - Amazon pick, pack and post orders to customers3. Increase sales - two thirds of FBA sellers saw a 20% increase in sales on
Amazon US4. Win the Buy Box - Amazon assumes a perfect score for FBA orders5. Access Prime members - 73% buy 2-3 times per month
Downside to FBA
Fees - paying to store products that aren’t selling - storage cost potentially higher than product value
Fulfillment by Merchant
Steps to fulfillment for FBM sellers
1. Amazon notification of sale2. Order dispatch - 2 days to dispatch - must confirm dispatch with Amazon3. Packing -
Interior: Packing slip, company contact information, professionally presented and carefully wrapped.Exterior: Labelling ‘Your Amazon [region] Marketplace Order’ on the outside of each package. Clearly print shipping address.
4. Confirm Shipment : inform customer of method of shipment and tracking details. Include the ‘Ship from’ address in the shipment confirmation message
Pricing Think profit, not just sales
Price smarter than the competition
1. Target competitors at the busiest shopping times2. Target your competitors based on your strengths
● Fulfillment: If you are competing on a product that is FBA, you can price higher than competitors who are FBM on that product. If you and your competitors are FBA, you will need to consider your other strengths.
● Feedback: With a higher feedback rating than your competitors, you can price higher. If your feedback score is lower than your competitor, it would be recommended to set a competitor rule to price below the higher performing competitor
● Seller rating: With a high seller rating, you can price your competing products higher than the competition.
● Domestic v international shipping: If you are a domestic seller targeting domestic buyers, you can price your competing product higher than an international competitor - buyers are more likely to purchase from a local seller for convenience, speed and confidence in the safe arrival of the product.
● Stock levels: Make more profit when your competitors are likely to run out of stock, - price the competing product higher than your competitor. Amazon will not award the Buy Box to a seller who is low on stock
● Many more...
Target the competition
Examples of competitor rules in XSellco Price Manager
A competitor changes their
price on Amazon Amazon
notifies XSellco of the
change
XSellco calculates the
new price
Background safety checks
are performed
XSellco notifies
Amazon of the price change
Amazon’s Pricing Error
System checks the new price
New price is updated on
Amazon
How does it work?
5 Billion Times Last Month
How does repricing work?
Price wars
Bust the Myth: The lowest price does not always win the Buy Box
Repricing is not a race to the bottom.
● Ignore out-of-bound sellers● Know your competitors pricing
trends: predict next moves● Is the competitor eligible to win
the Buy Box?● Optimize your chances for
maximum Buy Box share with high performing ratings - so you don’t have to constantly compete at the minimum price.
Get with data
Get the full picture by asking the right questions
➢ Who is currently winning the Buy Box and how many times have they won?➢ What is my pricing history on each product and at what price have I won the Buy Box?➢ Where in the world can I sell my products for a higher profit?➢ When should I schedule my price changes for the ultimate profit?➢ Why am I losing the Buy Box to another competitor?➢ How many sellers are competing on my product?
Remove guesswork from your pricing strategy - Don’t reprice blindly, make informed decisions
Get visibility on your Amazon store performance
Check your Amazon store performance
Know how to improve on your seller metrics and improve your Amazon store grade
Check your Amazon store performance
XSellco eCommerce experts can help with a free analysis on how your products are performing to win the Buy Box
Every metric is achievable
Thank you!
www.xsellco.com
@xsellco