So, how does a seller snag a sale on Amazon? They try to get in the buy box. The buy box is the coveted real estate of the product listing that shows which seller is benefiting when a customer clicks “Add to Cart.”
Many Amazon customers are unaware that there are usually multiple sellers for products. When they decide to purchase a product, they click the yellow “Add to Cart” button, instead of viewing all purchasing options. The seller in the buy box gets the most sales.
Each seller gets in the buy box a certain percentage of the time. Amazon has a proprietary formula that determines this based on these factors:
Sellers attempt to earn more of the buy box by having lower prices than their competitors. This price dropping significantly harms brand perception by lowering the perceived product value, in addition to hurting traditional brick and mortar retailers who are honoring the product MSRP.
Next time, we will discuss how enforcing a Minimum Advertised Pricing (MAP) policy can level the playing field for your authorized sellers.
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