How to Increase Conversion on Amazon
Amazon has come a long way since its humble beginnings as an online bookstore. Now the world’s largest internet retailer, Amazon offers an excellent opportunity for third party sellers to sell to millions of potential customers.
With an average of over £12,000 being spent every minute on the website last year, it’s no wonder that more than two million sellers are taking advantage of the vast marketplace.
However, with competition so fierce, what can you do to increase conversion, boost sales and earn more on Amazon?
The Buy Box
The Buy Box is essentially the holy grail of selling on Amazon. You’ve probably seen it before, it’s the little box that sits on the right-hand-side on every Amazon product listing.
Multiple sellers can offer the same product on Amazon, and when customers click "Add to Basket", you want it to be your offer that is added to their virtual trolley.
The Buy Box is no longer awarded to one merchant; it is rotated between the top sellers. With an estimated 82% of Amazon sales going through the Buy Box, it’s vital for sellers to know how it works and how to win a share of it.
According to Amazon, those eligible to compete for ownership of the Buy Box are “Professional sellers who have met performance-based requirements”. Therefore, if you’re a new seller, it could take time to build up the sales history needed to qualify for the Buy Box competition.
The eligible offers are then further evaluated to determine the winning offer. It’s generally owned by the sellers with the cheapest price, but Amazon also takes things like stock quantities, fulfilment (having a range of shipping options) and customer service into account.
So this sparks two questions: what can you do to become eligible to compete for the Buy Box? And when you’re there, what can you do to win your share of it?
Buy Box Eligibility
If you want to be able to compete for the Buy Box, you must have a Professional seller account and will need to show consistently high performance levels. There are a few things that can influence your performance:
- Selling history – Amazon needs to know that you are a consistent and trustworthy seller, which you can prove by successfully fulfilling a large number of orders.
- Customer service – communicate effectively with your customers and in a friendly and professional manner, and they will hopefully respond in kind with good reviews.
- Shipping – fast dispatch (Amazon requests that you ship within two business days), good packaging and an efficient shipping method will all boost performance.
Buy Box Factors
So you’re eligible to compete for the Buy Box, what can you do now to be featured as much as possible?
Whilst Amazon doesn’t disclose the specific performance metrics for the Buy Box, we can make an educated guess as to what the most likely factors might be. Excelling in these factors could greatly increase your chance of winning that coveted buy box and increasing your sales on Amazon.
Amazon offers two different ways of selling on their site – Fulfilment By Amazon (FBA) and Fulfilment By Merchant (FBM).
Using the Fulfilment by Amazon (FBA) service can fast-track sellers to Buy Box Eligibility and increased sales – it’s not a guarantee but it has hugely positive benefits.
Generally, if a seller uses FBA, Amazon will award that seller a perfect score for shipping method, on-time delivery and inventory depth, thus greatly increasing their performance metrics.
Unfortunately for Fulfillment by Merchant (FBM) sellers, this means they’re unlikely to beat FBA sellers unless they have a very high relative score in all areas and/or a very low price.
Seller-Fulfilled Prime (SFP)
Last May, Amazon introduced the Seller-Fulfilled Prime option to merchants in the US, which allows them to reach Amazon Prime members without the need to have their products warehoused by Amazon.
Amazon seems to have kept quiet about the SFP service, which is currently only being beta-tested in the US and selected international locations, but is rumoured to be fully rolled out in 2016.
Sellers will need to have been selling for at least 90 days and have a solid track record of shipping on time with valid tracking numbers in order to qualify.
If accepted, merchants will be able to tag products with the “Prime Eligible” logo whilst still shipping directly from their own distribution centres, essentially bypassing shipping to the Amazon warehouses and the costs associated with it.
Using SFP could give you a hugely increased chance of winning the Buy Box and being in with a chance of competing with other top sellers. Definitely one to keep an eye on – when they eventually roll it out.
It’s not surprising that price can have a strong influence on buyers when choosing where to buy from. If the price on Amazon is more appealing to the price of the same product offered on other websites and in shops, comparison shoppers will be more likely to buy from Amazon.
The ‘landed’ price is the price of your product including delivery. Your product doesn’t necessarily have to be the cheapest available but it should be amongst the lowest offers. Keeping an eye on the competition is therefore essential.
But who has the time to sit on Amazon all day watching prices go up and down by a few pence?
Luckily, there’s repricing software out there that’ll do it for you. You can tell it, for example, that you always want to be £0.01 cheaper than the competitors, and it can also raise the price when your competitors go out of stock to ensure you are getting the highest return on your stock.
Selling rating is the score given for the overall customer experience to the seller. For every order, a seller can be awarded anything from 110 points to -500.
If an order is fulfilled without any problem and Amazon deems it “perfect”, a seller gets 110 points. If an order is shipped late, it is regarded as a minor issue and the seller gets zero points for that order. A seller can be deducted points for things like cancelling the order (-100 points), or receiving negative feedback (-500 points).
Amazon groups sellers into six brackets depending on their rating: 98-100%, 95-97%, 90-94%, 80-89%, 70-79% and less than 70%. Moving up from one bracket to the next will have a positive impact on sales. And of course the aim is to be within the 98-100%.
It's worth noting that Amazon's Return Policy requires that international Marketplace Sellers either provide a return address within the UK, or pay the return postage costs. Failure to do so could greatly affect your seller rating if the customer chooses to file an A-z Guarantee claim.
So if you dispatch from a location outside the UK, it might be an idea to use an Amazon Returns Service based in the UK, keeping both Amazon and your customers happy.
As you have probably realised, the Buy Box is a complex system and there’s no one method of attack that will guarantee that you get seen.
Selling on Amazon has incredible potential for third-party sellers, and now you know what factors Amazon uses to rank its sellers it’s time to get to work. Just don’t forget to track your progress and see how your changes affect your rating.
Do you have any other tips for increasing conversion on Amazon? Let us know in the comments below.