Buy BoxThis refers to the situation where a sel... More eligibility continues to be a hot topic for Amazon sellers. We’d like to tackle the issue with a few tips and visuals, in the hope that you’ll be able to apply them to your business.
In our previous blog post on the Amazon Buy Box, we’ve revealed the perspectives that buyers and sellers have when it comes to this most coveted of Amazon seller goals.
In today’s post, our Product Owner, Emin, put together an array of graphs and brief interpretations to help you visualize the effects of an alternative pricing strategy on your chances of securing the elusive Amazon Buy Box. As eligibility continues to be one of Amazon’s best-guarded secrets, Emin’s recommended approach is to focus your decisions on facts rather than pure luck, as so many other sellers may be inclined to do.
First Scenario: One seller, the Amazon Buy Box and the profit question
The above example depicts an instance where a seller owns the Buy Box at $14. The price will stay the same, and the Buy Box will continue to be theirs. Perhaps a slight increase in price may yield somewhat higher profits. However, when there is little or no competitive information, it is hard to find other variables (aside from sale price a.s.o.) that could be used to build the best price point.
The next example shows us the same item. However, in the scenario below, our user has set up a pricing strategy to gradually increase the price after he gets the Buy Box. Once the price hits a certain upper limit, he loses the Buy Box and reverts to the original price, and the process starts all over again. This strategy can be easily implemented with Sellery, and is meant to bring you higher profits when you’re riding the Buy Box wave, so to speak.
Buy Box Fact: You can lose the Buy Box if you price too high, even when you’re the only seller.
Second Scenario: 3 competitors fighting for the Buy Box in a classic price war
Have you ever wondered how a price war looks like? Check out the below image:
So what have we here? There are 3 sellers involved in the Amazon Buy Box rotation:
Seller 1 (our customer in red), Seller 2 (a competitor in blue who springs up from the bottom of the graph, fluctuating between the two upper dotted lines), and Seller 3 (also in blue, but hanging around at the bottom of the graph, on the lowest dotted line).
Seller 1 and Seller 2 increase their price as soon as they win the Buy Box. Their frequent price changes (always going up) causes the Buy Box to switch from one to the other, and the overall price to increase. Seller 3 doesn’t reprice, though. They sit tight at $14.50. Every now and then, they also get the Buy Box, which causes the other two sellers to reset their prices, and the story to start anew.
Using a repricing tool, such as Sellery, can be of great help in such situations. When fighting for the Buy Box, manually changing your prices is practically impossible with several price changes per hour.
Buy Box Fact: The Buy Box rotates when sellers change their price (you can trigger a Buy Box rotation by changing your price).
Third Scenario: Repricers raising prices in a competitive market
Increasing the price when you own the Amazon Buy Box is a great strategy in most cases. Let’s take a look at a factual example:
Here, our customer (red dot) managed to hold on to the Buy Box for a little over an hour, and their competitor followed them up the ladder. Eventually, when the competitor took over the Buy Box, the market price of the item had increased by more than 10%.
Two popular strategies that are easy to set up in Sellery are:
- if I don’t have the Buy Box, overcut the Buy Box price
- if I do have the Buy Box, increase my price until I lose it
Used in tandem, these strategies naturally tend to lead to rising market prices.
Repricing Fact: When applying the right strategy at the right time, you can pull the price of an item up just enough to cover the value the item might have lost over time due to aggressive undercutting It’s a technique many sellers u... More.
We hope our list of Buy Box facts and real-life scenarios has helped spark some ideas that you can apply to your Amazon businessAmazon Business is Amazon’s wholesale ... More. We’ll be following up next week with some more facts and pricing hints, so please stay tuned as the Amazon Buy Box series draws to a close.
Iulia is one of SellerEngine’s Repricing Experts. She takes pride in being kind and helpful and goes by the saying ” sharing is caring”.
