Think back to when you were young. It was clear from an early age you were destined to own a restaurant. After years of saving and contemplation, you decide to pull the plug and buy a mobile coffee truck. You’ve assembled the coffee, equipment, and branding but now you must consider an important question: Where do you secure prime real estate to drive sales?
You could end up on the outskirts of town on Sketchy Street, where the potholes outnumber the people. Or, you could capture a spot in downtown, home to the heaviest foot traffic of caffeine guzzling office workers in the area.
Anyone who’s ever operated a food truck knows you need to go where the people are to make the sale. The same goes for online sales.
When it comes to e-commerce, the Amazon buy box is prime real estate, a place where multiple sellers vie for optimal positions, with positive and negative ramifications for publishers. Visibility into what is happening there is as important as knowing where your books are in brick and mortar stores and, even better, where within the stores themselves, in what condition, and more.
What is the Amazon Buy Box?
The vertical rectangle on the right side of an Amazon product page where customers can directly add items to their shopping carts. In Amazon’s now-legendary consumer-centric approach, the buy box was created to give the consumer visibility into the different ways they can get the best possible value for their money. There is no limit on the number of third-party sellers, or the number of items third-party sellers can offer on Amazon’s marketplace. The competition to be the first option presented to consumers is fierce.
Why is the Amazon Buy Box Important for Book Publishers
Amazon marketplace represents different types of sellers: for clarity’s sake, there is Amazon itself and third-party sellers. Third-party sellers or resellers represent every book retailer or individual selling on Amazon that isn’t Amazon.
While the goal is to “win” the buy box (meaning the sale is being made by Amazon to the consumer, thereby selling the book the publisher provided to Amazon), it is more accurate to say that a seller wins or loses a share of the buy box. For example, a high-ranking third-party bookseller could hold the buy box for 75% of the day, while a lower-ranking third-party bookseller with, say, a lower price holds the remaining 25% of the day.
For example, data from Marketing Insights shows 81% of a specific publisher’s titles have “lost“ the buy box to third-party booksellers for at least some period of time over a span of two months. This is often due to pricing or availability issues and, again, Amazon trying to show consumers the best value (as determined by their algorithm, of course). In this set, on average, third-party pricing was $8 less than the publisher suggested pricing. In many cases, this represents a form of lost revenue the publisher will never see.
Yes, they may have made the first sale to the reseller but a third-party sale is often taking place as a sell-through of their inventory at Amazon. Significantly, 82% of Amazon website sales go through the buy box and the percentage is even higher on mobile devices.
“Other Sellers on Amazon”
Place yourself in your consumer’s shoes. Are you going to purchase from the “Other Sellers on Amazon” at the bottom or simply one-click “Add to Cart” without a second thought? Have you ever noticed the “Other Sellers on Amazon” below the buy box? I didn’t think so. Don’t worry, you’re not alone in this — everyone else does the same.
Hence: the indisputable importance of the buy box.
What Does it Look Like to “Win” the Buy Box?
The below is considered a “won” buy box. For publishers, a “won” buy box is when you see “Ships from and sold by Amazon” verbiage. This means Amazon bought the book from you or a wholesaler and is selling it to the consumer.
Like most things on the internet today, the Amazon buy box is fueled by an algorithm that considers myriad data points. Amazon’s stated hope is to provide the consumer with the best possible value and experience, while also ensuring efficiency and resulting profitability for themselves.
4 Key Data Points that Feed the Amazon Buy Box Algorithm
- Fulfillment by Amazon (FBA)
- Amazon has purchased a book from you or a wholesaler and plans to fulfill the shipment. Or, a third-party seller who is taking advantage of Amazon’s FBA program for marketplace sellers.
- Seller-fulfilled Prime
- A third-party seller uses the benefits of Prime but manages their own shipping.
- Landed price
- The total price an Amazon product goes for, including shipping.
- Shipping time
- A simple metric but vital to winning the buy box. Amazon will look at the time in which the seller promises to ship the item to the consumer, taking into account the consumer location as well as the nearest location of that product to the consumer when possible. This means it is possible for different buy box conditions and messaging to appear to different consumers.
The price and availability of your book will drive success in “winning” the buy box, ensuring an Amazon first party sale.
What Does it Look Like to “Lose” the Buy Box?
The above is considered a “lost” buy box for the publisher but a “win” for third-party bookseller, Old Yeller Books. In this case, presumably Old Yeller Books bought the book from you or a wholesaler and is selling to the consumer via the Amazon marketplace. (Note: there are “bad actors” who procure books outside of standard channels and misrepresent them – this is not one of those cases.)
A “lost” buy box simply means Amazon’s algorithm has decided a third-party bookseller provides either…
- a.) What Amazon considers a better experience (lower price, faster delivery, safer stock buffer, etc.
- b.) They are out of stock themselves and either can’t or don’t wish to replenish.
Often a “lost buy box” does not mean you as a publisher are doing anything wrong, unless it has to do with availability.
The third-party bookseller may or may not be a “bad actor”. Rather, it is simply a bookstore that bought the book and is reselling it online using Amazon as the marketplace.
What is a “Bad Actor”?
- Selling ARCS as new
- Selling used as new
- Selling counterfeits
- Selling at $0 with $20 shipping
- Selling international editions into US market when rights prohibits doing so
The Amazon algorithm does a solid job finding “bad actors” and eliminating them from the buy box contention and they have announced further intentions to improve their identification of “bad actors.”
At any given moment, your entire list is not going to have a favorable buy box situation. Amazon is a highly dynamic retail environment. Things change constantly. A decent percentage of your titles may “lose” the buy box on any given day. However, the balance of your titles will “win” the buy box and you should see 100% of your marketing efforts driving sell-through for the title on which you’re focusing.
Where Do You Go from Here?
Four out of every $10 spent online in the U.S. is with Amazon (43%) and a majority of the sales are going through the buy box. So how can you know which of your titles are winning the buy box and which are losing?
Ingram’s Marketing Insights platform monitors all buy box scenarios for a publisher’s list, providing the current status every day in ranked order of importance. Such reports will aid you greatly in spotting patterns and the exact scenarios when you’re losing the buy box. It will identify when Amazon perceives low inventory or too high pricing. You can see if third-party booksellers are selling finished ARCs as new books and ask Amazon to remove these booksellers.
At the end of the day, you may be able to utilize buy box trend data in discussion with Amazon to point out what you’re seeing in the marketplace. Marketing Insights will constantly reassess your titles’ performance and keep you “out in front” of the information to cut down on being surprised when, say, an author or agent calls wondering what is happening.
Perhaps most importantly, this transparency can keep you from spending money and time marketing books with unfavorable buy box situations.