Success Strategy for Amazon

13th December, 2012 - 7 minutes read

The Amazon product ranking algorithm is very complicated and is based on a number of factors.

The main ranking factor is based on recent sales volume and is updated very regularly. It basically ranks products that are selling well at the moment, above those that are not. The logic behind this must be that the best-selling products are the ones that they are most likely to be what the customers are searching for.

It also takes keywords and phrases into account to return the most relevant result. How to Appear in Searches and Rank Well (when listing a new product)

  • Complete and accurate title/name
  • Detailed description
  • Keywords – the Amazon search engine looks for the keyword in the item title and description as well as the search term section when listing the product
  • Use only relevant keywords for your product as there is no point in appearing for keywords that aren’t likely to convert
  • Use synonyms and alternate spellings to capture as many searches as possible
  • Avoid using abbreviations as people tend not to search using them
  • Search results aren’t just based on keywords –also heavily influenced by availability (always have popular products in stock), popularity (the most popular products appear higher up), relevance (must be based on keywords)
  • Good images
  • Enter your product into as many relevant categories as possible as this widens the net of potential buyers

Becoming a Pro Merchant

The Pro-Merchant status is a paid for feature that is aimed at sellers who believe they will sell over 30 items per month. It is relatively inexpensive but offers a range of enhanced tools and options that aid selling, such as the ability to create promotions. It is not clear if Pro-Merchants are favoured by Amazon but it is sensible to assume so, as they are the ones selling large volumes.

Pro-Merchants don’t pay as much per order as standard sellers as their value to Amazon is much greater, due to the volume Pro-Merchants sell.

Pro merchants also have the opportunity to achieve ‘featured merchant’ status. This is achieved by meeting certain customer service standards. The main benefit is the ability to compete for the coveted ‘Buy Box’, as detailed below.

According to Amazon; “Sellers with Featured Merchant status gain placement advantages for their listings on Amazon.” So this may be the only way of ensuring that your products appear high up.

Featured Merchants must consistently achieve outstanding levels of service.

Factors used for Winning the Buy Box for a Listed Product with Multiple Sellers

The Buy Box is the box that buyers click on to add to cart. It is arguably the most important factor on Amazon, as being the merchant who has control of the buy box means you get a vast majority of the orders. There are a number of things that you can do to ‘win’ the buy box.

  • First you must become an eligible seller (featured merchant) – this is achieved through consistent meeting of high standards. Combination of everything – price of products, reviews, completed orders, dispatch times, few incomplete orders etc
  • Price – Product Price and Shipping Price – the lower the better, this is a key factor
  • Availability – In Stock, delivery times – the more available the better, the sooner the better– keep good stock! If you don’t have the product in stock you cannot win the buy box. Having a lot of stock is very important to Amazon. this is a key factor
  • Sales Volume – you have to have a history of selling the item, and other items
  • Customer Feedback – Good Reviews – No brainer
  • Customer Experience – Order Defect Rate (See below), the lower the better
  • Delivery – faster, cheaper delivery = better chance at buy box, also cheaper delivery is better
  • Experience – time and experience is also a factor

Think of it from Amazons perspective – what do they want for the customer? The best product, in stock now, at the lowest price with free next day delivery from a longstanding, experienced seller. Amazon wants the best for its customers as; ultimately it’s their reputation on the line. They must view you as trustworthy if you are to win the buy box privilege. You have to be the ‘best’ seller of that particular item.

Order Defect Rate

  • Customer feedback, A to Z claims and chargebacks make up ODR
  • ODR is a percentage, calculated by the number of orders with a defect divided by the total number of orders placed in that period of time
  • Customer feedback – number of orders that have received negative feedback divided by total number of orders
  • Chargebacks – number of orders that have received a service credit card chargeback divided by total number of orders
  • A to Z guarantee claim rate – number of orders that received an A to Z guarantee claim divided by number of total orders. (A to Z guarantee is Amazons standard guarantee)
  • ODR should be less than 1%
  • Late Shipment Rate should be less than 4% – this is the rate of orders that are shipped late
  • Pre-fulfilment cancel rate should be less than 2.5% – this is the rate of orders cancelled by the seller as they don’t have the item in stock, ready for dispatch

According to Amazon “customer satisfaction is one of the most important performance measures we use to determine how well you are doing as a seller on Amazon.”

Conclusion

From the research, it is clear that everything Amazon does points back to customer service and satisfaction. The only way to do well on Amazon is to meet their standards consistently. This means competitive pricing, fast/cheap shipping and plenty of stock. Trust and experience are crucial.