Lost Buy Box: data reveals why vendors lose sales
All Amazon vendors know that: no matter what they do, they will lose sales to third-party sellers. At any given time, Amazon sorts through all sellers of a product to decide who gets the sales. If one is an eligible seller with a competitive price, it may indeed claim the buy box — and all associated sales — for a few minutes, a few hours, or even a few days.
Many marketplace sellers are experienced e-commerce professionals who have been in business for years. They acquire inventory from various sources (distributors, grey market, cross-import) and use FBA. Some of them have over 100k products on display. Read our article about top buy box contesters in 7 Amazon regions.
When it comes to dealing with the buy box, Amazon has three goals:
- Offer a seamless shopping experience (fast shipping with no delay),
- Offer competitive prices,
- Make money.
Vendors lose the buy box when one of these three goals cannot be fulfilled.
BlueBoard has been monitoring thousands of products in all Amazon regions for years. We decided to use our data to understand what the most frequent causes of lost buy box were. We looked into over 800k lost buy box cases on Amazon.com, Amazon.de, and Amazon.fr over 12 months (April 2018 to April 2019). This is what we found.
1 in 5 lost buy box happens because of stock issues
This is the reason that’s easiest to avoid: Amazon is out of inventory for your product and diverts the sales to a seller with stock. We found that this was the case in 19.4% of lost buy box instances, on average.
This situation happened most frequently at Amazon.fr; a possible explanation is that France being a smaller market, sales are harder to predict, which results in more frequent stock issues.
To make sure that Amazon can always offer a seamless shopping experience, you need to closely monitor stock-levels and make sure that you don’t reject any PO.
Price competition explains 66% of lost buy boxes
As we said earlier, Amazon always seeks to offer a competitive price. The most common reason why they elect to give the buy box to a seller is because of price.
Amazon.com is where price competition is the fiercest. In most cases, trying to fight marketplace sellers on price is a bad idea: the risk of triggering an endless downwards price spiral is too high. But if you are desperate to get the buy box back, you may have to. For all the cases where a seller was undercutting the buy box price, we looked into the price deltas: how much cheaper are marketplace offers?
But this average hides many disparities. In the US, especially, the buy box is often taken with a small price difference.
What about the remaining cases?
After eliminating all the cases where the problem was either the price or the availability, we still have quite a few instances.
Looking into individual cases reveals a variety of scenarios: highly competitive products with 50 sellers, end-of-life products with massive discounts… Here are the reasons why this situation may happen:
- Amazon made a mistake or is slow to update the buy box: this is rare but some customers have encountered this situation;
- The product was determined CRAP (Can’t Realize A Profit): Amazon is no longer ordering new units and favors marketplace sellers while the price is too low;
- Amazon is managing its inventory: the product is low on stock and Amazon projects it will run out before the next shipment arrives; it gives sales to third-parties in between.