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