PRODUCT BUYABILITY ON AMAZON
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1 1 PRODUCT BUYABILITY ON AMAZON Increase Your Buy Box Ownership Shares & Drive More Orders We Turn Browsers Into Buyers
2 TABLE OF CONTENTS INTRODUCTION HOW PRODUCT BUYABILITY FITS INTO YOUR AMAZON STRATEGY FACTORS INFLUENCING PRODUCT BUYABILIITY FULFILLMENT METHOD FULFILLMENT LATENCY LANDED PRICE SELLER RATING SELLER FEEDBACK PRODUCT CONTENT FEATURES PRODUCT REVIEWS INVENTORY QUANTITY
3 3 TO OUR READERS, At CPC Strategy our goal is to make the Retail Search world easy to navigate for retailers. Imagine us as your Google Maps- charting the Retail Search world and giving detailed directions. We re here to help you get there. If at any time you have questions-reach out to Sincerely, Rick Backus Co-Founder, CEO
4 INTRODUCTION
5 5 INTRODUCTION Amazon is unlike promoting inventory on Google, comparison shopping engines, or other product advertising channels it demands a wide array of resources, plays by a different set of rules, and requires a holistic, sophisticated strategy to really be successful. If you ve made the decision to be a third-party Amazon seller, then you acknowledge that the Marketplace is essentially an extension of your ecommerce store, requiring its own inventory management, technology, fulfillment, and customer service strategies. The Marketplace is nothing if not competitive, and so the main challenge in optimizing your Amazon sales performance will be getting your offers front and center when a shopper is looking to buy. At the core of this challenge are the concepts of product Discoverability and product Buyability. Understanding these ideas and how you can influence them will be an essential step in determining your resource allocation and overall seller strategy. First, let s apply some definitions in the following page.
6 6 DISCOVERABILITY The ability for a product listing to be found on Amazon. From a consumer s point of view, Amazon is essentially seller agnostic, focusing SERPs on products rather than the sellers of those products. As a third-party seller of a given product, you have an incentive to increase the overall number of sessions to a product detail page provided that you re in a good position to win the sale for that product. To relate it to more traditional product ad channels, think driving traffic. Discoverability BUYABILITY Buyability can refer to two highly overlapping concepts: Buyability Buyability #1: A reseller s ability to influence their Buy Box ownership percentage Buyability #2: The factors that influence the overall conversion rate of a product page. To relate it to more traditional product ad channels, think converting traffic.
7 7 To put Buyability in better context, let s say you sell a SwissGear 10-person tent and that its product detail page received 100 overall orders last month. Your goal will be to have the highest share of those 100 orders as possible (Buyability #1), and once a high share is reached, you can shift strategy towards increasing the overall number of orders. Increasing orders can be done through increasing product Discoverability and converting sessions by implementing conversion rate optimization best practices through product content (Buyability #2). This white paper will dive into the strategy behind product Buyability and the different levers involved in driving Buy Box ownership and subsequently, increasing the overall conversion rate of a product detail page. By understanding the factors that influence these two sides of the coin driving shoppers to product pages (Discoverability) and converting those shoppers once they reach the product detail pages (Buyability) a third-party seller can start to sculpt their overall Amazon strategy and decide when and where it makes sense to focus their resources on Buyability over Discoverability (and vice versa).
8 CHAPTER 1 HOW PRODUCT BUYABILITY FITS INTO YOUR AMAZON STRATEGY
9 9 HOW PRODUCT BUYABILITY FITS INTO YOUR AMAZON STRATEGY If the Amazon SERP is where driving product Discoverability is most relevant, the Amazon product detail page is where Buyability is most applicable. The strong interplay between Discoverability and Buyability is cyclical: Optimize for product discoverability Increases Traffic 1. Improving a product s Discoverability will ensure that more shoppers reach that product s detail page 2. The more shoppers that reach a product detail page (increase in sessions), the higher the likelihood that product gets purchased 3. The more a product gets clicked on and purchased (increase in orders a.k.a. buyability), the higher up on an Amazon SERP it gets because sales performance history is a key factor in search rankings 4. The higher up on an Amazon SERP a product gets, the more discoverable it is ( and the cycle continues) Increases Sales search... Product #1 Product #2 Product #3 Higher Amazon SERP Rankings
10 10 And so when focusing your strategy on Buyability, the goal is to convert a session for your offer on a given product. There are 2 central ways to do this: Increase your Buy Box share Increase the overall conversion rate of the product detail page Let s dive into these two ideas: INCREASE BUY BOX SHARE The higher your Buy Box share, the higher number of orders you ll own for that product page. It s a direct correlation and practically a causative relationship on the Marketplace. You can liken it to owning the first, second, and third ad positions for AdWords. This white paper will not touch on how to become Buy Box eligible, but it will discuss the factors that a seller can influence to increase their Buy Box ownership share. Once you appreciate how much Buy Box offer placement will directly influence your Amazon sales, the key challenge will be demystifying how it works.
11 11 INCREASE CONVERSION RATE OF THE PRODUCT DETAIL PAGE You can think of this as implementing conversion rate optimization (CRO) best practices those you would apply to your own ecommerce site s product pages. You can do this through your product content submission by featuring robust product features, descriptions, images, etc. However, it should be noted that the content you submit to Amazon is not guaranteed to surface on the product detail page. This strategy is also more of a focus for brands and OEMs, who inherently have more content authority than a standard reseller, as well as for resellers who have a very strong hold of the Buy Box. Of course, it doesn t make sense for you to invest time and resources in optimizing you product content if you don t have high Buy Box share because you would basically be implementing CRO best practices for your competitor s offer. So when should you focus strategy towards improving product Buyability? Simply put, you should prioritize improving product Buyability for the products that are most valuable to your business. Let s clarify this a bit more. To identify the most important products in your Amazon catalog, dive into your sales performance reports and look at your top products by revenue, sessions, and orders for the last days.
12 12 The goal is to make sure you re prioritizing your time and resources on improving the products that will benefit your business the most: By Orders With an understanding of the products that are driving most of your orders, you can start to unpack how these products are generating orders. Is it simply because of the high volume of sessions that listing is receiving? Do all of these products have very high Buy Box share? By Session Look at the ASINs which receive the highest number of sessions. What s your Buy Box ownership share for these products? Marginal improvements in Buy Box share for high-session products can pay off in a significant amount of orders. By Revenue Which ASINs are your top revenue drivers? Again, this is an area for improvement if you have products that are driving significant revenue for you even with just a mediocre Buy Box share. This initial analysis will probably show a lot of overlap in terms of your top-performing products. These are the products where you should prioritize your time and where taking a Buyability-focused approached makes the most sense. One big note here is that it s just as important to protect a product with already high Buy Box share as it is to improve on products where ownership share could be higher.
13 13 The entire discussion behind both product Discoverability and Buyability is all about having a controlled, sophisticated selling strategy where your time and resources are most effectively allocated. By understanding which of your products are already performing well for you, you have a starting point to implement a Buyability-focused strategy. From there, you can progressively move towards the top and products in your catalog and identify areas for improvement. As we dive deeper into product Buyability, you ll notice that this discussion heavily revolves around increasing your Buy Box share. The fact of the matter is that winning the Buy Box is most of the battle when it comes to maximizing the number of orders you re generating on the Marketplace. After a significant Buy Box ownership share is established, you can shift focus towards improving the overall conversion rate of the product detail page. In other words, think of this as Amazon CRO.
14 14 CHAPTER 2 FACTORS INFLUENCING PRODUCT DISCOVERABILITY
15 15 FACTORS INFLUENCING PRODUCT BUYABILITY FULFILLMENT While having huge stakes in the quality of your customer service and the overall efficiency of your operations, fulfillment is also one ofthe most influential Buy Box factors. We ll discuss how fulfillment affects your Seller Rating in a bit, but let s talk about fulfillment s two very immediate influences on the Buy Box, Method and Latency. Fulfillment Method To FBA or not to FBA that is the question. Marketplace sellers have the option of fulfilling all their products themselves (FBM), having their entire catalog fulfilled by Amazon (FBA), or having a mix of both FBM and FBA products. In most cases, sophisticated sellers who are strategic about their fulfillment method will do both FBM and FBA. The reality is that it won t make sense to FBA some products while it may be a strategic lever to pull for other products, and so this is why sellers will end up with a mix of both FBM and FBA.
16 16 Identify the products in your catalog that can stand to see the most improvement in Buy Box ownership share though fulfilling by Amazon. For a competitive ASIN, this may require researching how your competitors are fulfilling that product. Participating in the Fulfillment by Amazon program is a huge lever resellers can pull to influence Buy Box ownership. For resellers who aren t Buy Box eligible, FBA can actually expedite your eligibility. How do you know which products to FBA? Of course, this will depend on your unique business and how you currently carry out order fulfillment, but a good rule of thumb is to FBA products which stand to benefit the most from it. Amazon Marketplace selling is unique in that the method you choose to fulfill your products will directly influence your bottom line via its strong influence on the Buy Box.
17 17 Fulfillment Latency (a.k.a. Shipping Time) Fulfillment latency is the time it takes for you to physically ship an order out after having received it. This is a product-specific field in the Amazon product feed where you can specify a numerical value like 2 or 3. From there, Amazon will bucket you in a shipping range like you see in the screenshot below. The length of time you place in this field will directly influence the Buy Box, of course with the lower latency times offering better prospects. Don t leave the Fullfillment Latency field blank in your Amazon product feed. If you do, it will default to 1-2 days. If you are not meeting this high standard, then your Seller Rating will suffer.
18 18 LANDED PRICE Landed price is equal to the product price plus shipping. Fulfillment method and landed price are regarded as the two most influential Buy Box factors. In the example below, you see the Buy Box go in favor of the seller with the lowest landed price (of course, there are other factors at play here).
19 19 Pricing is a huge aspect of strategic Amazon selling, and so a reseller may have to make some sacrifices or get creative when it comes to price. There are also repricing solutions available to help you monitor your competitors prices and more closely monitor your Buy Box ownership. Unlike Seller Rating and Seller Feedback, pricing is a heavily weighted Buy Box factor that is in complete control of the seller. If you re fulfilling the product yourself, consider baking shipping & handling costs into your overall product price. The perception of value is higher when shipping is preceded by FREE. SELLER RATING
20 20 Along with aspects of fulfillment and landed price, seller rating is one of the top Buy Box factors. Not to be confused with your seller feedback score, seller rating is essentially an overall assessment of how well you re handling inventory management, order management, fulfillment, and customer service. There are multiple factors that make up your overall seller rating, and so each should be considered an influence on your ability to increase Buy Box share. Amazon lists these factors as: Buyer-Seller Contact Response Time Order-related buyer messages that do not receive a response within 24 hours On-Time Delivery Rate Orders that are not delivered to customers by the expected date range Pre-Fulfillment Cancel Rate & Refund Rate Cancelled orders (does not include buyer-requested order cancellations) Late Shipment Rate Service Chargeback Rate Filed A-to-Z Claim Rate Orders that are not confirmed shipped within the required time period Seller-faulted credit card chargebacks on an order Seller-faulted A-to-Z Guarantee claims on an order Negative Feedback Rate Negative feedback on an order
21 21 Let s dive into each Seller Rating Factor: Order Defect Rate Order Defect Rate (ODR) is the number of orders with some kind of issue divided by the total of orders (for a given time period). Amazon, of course, recommends that you keep this lower than 1%. So what constitutes as a defective order? There are three components: Negative Feedback Your negative feedback rate is the number of orders you fulfill that receive negative feedback divided by the total number of orders. Filed A-to-Z Claims Possibly the worst thing to result from a customer interaction is an A-to-Z claim. A filed A-to-Z claim will automatically deem an order defective. Service Chargebacks A service credit card chargeback occurs whenever a customer refutes your charge on their card with their credit card company. In this case, the card company would follow up with Amazon, at which point Amazon will contact you (like they would for an A-to-Z claim). This is very similar to an A-to-Z claim in terms of severity, and you will usually not win this battle.
22 22 Recent Customer Metrics Data Like Order Defect Rate, customer metrics data is made up of three components. Putting this in perspective, your recent customer metrics data will impact your Seller Rating, which in turn will affect your Buy Box influence. The three components to think about here are: Late Shipment Rate Pre-Fulfillment Cancel Rate Refund Rate Late shipments are considered those where you fail to send a shipment confirmation through Amazon within 3 days of your expected shipping window (ie. within 24 hours, 1-2 days, 2-3 days, etc.). Pre-fulfillment cancellation rate refers to when you cancel an order on a customer, typically because of stock issues. This is pre-fulfillment, meaning you haven t confirmed the shipment of this item through Amazon yet. Amazon considers a refunded order one that you, as the seller, refund on a customer post-shipping confirmation. These are not always negative events.
23 23 On-Time Delivery Score Every Marketplace seller is also given an on-time delivery score, which is based on delivery tracking information. It s a direct indicator of the efficiency of your fulfillment and shipping process. There are two main components at play here, and of course Amazon recommends that these rates be high: On-time Delivery Rate The percentage of your shipped orders that arrive by the expected date. Tracked Delivery Rate The percentage of your shipped orders that have delivery tracking information available.
24 24 Buyer-Seller Contact Response Time Buyer-seller contact response time is a direct measure of the quality of your customer service. A late response is anything after 24 hours of receiving a customer message or inquiry. Amazon s finding: Our research shows that orders with messages responded to within 24 hours receive 50% less negative feedback compared to orders with messages responded to after more than 24 hours. - Amazon Achieving a high Seller Rating score by optimizing the factors that influence it is the foundation for success on Amazon. Over time, it will improve your Seller Feedback score as well as your influence over the Buy Box. Sellers can actually mark a conversation as mark as no response needed so that they won t be penalized for not sending a response. These are appropriate for customer engagements where perhaps the last message sent from him/her was along the lines of thank you.
25 25 SELLER FEEDBACK While not as heavily weighted as fulfillment method, landed price, and Seller Rating, your Seller Feedback score still directly influences your Buy Box ownership share. This makes sense because at the end of the day, Amazon is trying to provide the best experience for the customer. They accomplish this by awarding the Buy Box to a seller who offers one of the lowest prices for an ASIN, a fast fulfillment process, and a very highly rated Seller Feedback score. There are two main components to consider. Let s take a closer look at them in the next page.
26 26 Seller Feedback Score Your 1-5 star rating ultimately gets translated into a percentage of positive ratings, where 1-2 stars is considered negative, 3 stars is considered neutral, and 4-5 stars is considered positive. However, this isn t publicized at all on the product detail page. A shopper must click through to see offers from other sellers in order for seller feedback scores to display. Seller Feedback Volume Your feedback volume refers to the number of customer ratings you receive in the past 12 months. Your final feedback score is determined as the SUM of your positive feedback ratings / SUM of total ratings. A high volume of seller feedback adds to your credibility and gives a consumer more confidence in purchasing from you. For a general rule of thumb, a seller who is doing a good job of attaining seller feedback will have ratings for about 7-9% of their total number of orders. If you re seeing significantly lower numbers than this and believe it s affecting your sales performance, there are feedback management solutions to help you increase feedback volume.
27 27 PRODUCT CONTENT Product content refers to the product information you send to Amazon in your catalog. It s the largest factor in increasing your listing relevancy for a given search query, and for this reason, product content is a huge driver of product Discoverability. However, product content also significantly affects product Buyability just as it would on a product page on your ecommerce site. It s intuitive that you would want to provide multiple high quality images, a robust product description, key features & specs, and a very descriptive product title to give the shopper the opportunity to make an informed purchase decision. The big thing to recognize here is that the product data you send over in your catalog will not affect your influence over the Buy Box at all. Product content ownership and Buy Box factors are completely exclusive. For this reason, your product content submission strategy will influence product Buyability increasing orders - only by influencing the overall conversion rate of a product page, not by increasing your Buy Box ownership share. Likewise, if you have very high Buy Box ownership, your product content does not have more authority or a greater likelihood of surfacing than the product content submitted by a seller with 0% Buy Box share.
28 28 Amazon explains: Because we have many contributors to our product pages, our system combines all the information provided into the best possible product page. The product page you see on Amazon.com may reflect the details provided by multiple sellers. There is no guarantee the details you supply will be visible on Amazon.com. - Amazon Let s dive into the key aspects of product content and how they affect product Buyability: Title Product title plays a huge role in Amazon search, but once a shopper clicks through to a listing, it also plays a role in validating to the shopper that this is a relevant product. This holds true particularly for electronics, where specs and part numbers are much more integral to the shopper. As a rule of thumb when writing your product titles, a buyer should feel confident making a purchase off the title alone.
29 29 There are several Amazon-recommended best practices for title content, here s an example: Attribute Brand & Description Product Line Material or Key Ingredient Color Size Quantity Example Laura Ashley Pillow Cases Sophia Collection 300-Thread-Count Blue Queen Set of 2
30 30 This coffee maker follows a solid Amazon product title structure (Brand > MPN > Attribute > Product > Attribute). Of course, the ideal structure will vary by vertical (ex. MPN is important for electronics but not necessarily for apparel), and Amazon does provide vertical-specific product title best practices in Seller Central. Another important note about product titles is the character limitations. If you re uploading individual products manually, then your product titles will be restricted to 250 characters. However, if you re uploading products via a bulk upload (ex. like through your Mercent platform), then you can submit product titles up to 500 characters. This is a huge opportunity that you ll want to take advantage of, and in fact the Mr. Coffee product title above could be making better use of the space and including more information about the product.
31 31 FEATURES (BULLET POINTS) There are 5 columns in an Amazon inventory file for Product Features. Your decision to enhance this information should be strategic based on how confident you are that optimizing this infowill drive conversions for your offer.
32 32 Amazon recommends a couple best practices to keep in mind when writing your product features: Highlight the five key features you want customers to consider, such as dimensions, age appropriateness, ideal conditions for the product, skill level, contents, country of origin, and so on. Maintain a consistent order. If your first bullet point is country of origin, keep that same order for all your products Reiterate important information from the title and description Begin each bullet point with a capital letter Write with sentence fragments and do not include ending punctuation Do not include promotional and pricing information Description Include every single relevant product detail, just as you would for your own ecommerce site s product page.
33 33 Product descriptions give sellers the unique opportunity to lay out a sales or marketing narrative that also have the added advantage of being indexed for search (thus increasing product Discoverability). HAVE AN AMAZON EXPERT AUDIT YOUR MARKETPLACE CAMPAIGNS HARNESS THE FULL POTENTIAL OF THE AMAZON MARKETPLACE Schedule A Meeting With An Amazon Advisor
34 34 Category-Specific Data Attributes Depending on the category, there are optional fields you can choose to populate to provide more information about the product. These details show up on an Amazon SERP as search filters, but they can also occupy space on the product detail page as Technical Details. This is especially true for electronics, some appliances, automotive parts, and other part-oriented product verticals. Product Images Including a high-quality, zoom-able product image is a standard conversion rate optimization best practice regardless of the ecommerce channel. How your product is represented via the image will influence click-throughs on the SERP and ultimately, its performance on the product detail page.
35 35 Including a main image URL is required but any alternate image URLs are optional and recommended for conversion rate optimization. It s recommended to not invest time into adding alternate images if you don t have a high buy box ownership share. If you want to be strategic about your product content submission, you must ask yourself, When would you want to invest resources to increase the overall conversion rate of a product detail page? The answer: When you already have a very strong hold of the Buy Box. Whether this is because you re the only seller of a given ASIN or you re simply a much stronger seller than your competitors, it only makes sense to optimize product data if it will boost conversions for a detail page where your offer is most prominent. If you have the luxury of investing time and resources to optimize your product data, prioritize it for products where your Buy Box share is extremely high. It s a solid opportunity to reap more sales for a product that receives a good amount of sessions but may not necessarily be converting well.
36 36 PRODUCT REVIEWS Product Reviews are a factor in driving product Discoverability via search filters, however, they re more so an integral piece in driving product Buyability, enhancing the overall conversion rate of the product detail page. A breeding ground for some of the best customer reviews available, the Amazon Marketplace is unique in that shoppers can usually browse a stockpile of unbiased product reviews. Having a high volume of product reviews is a huge asset in increasing orders on the detail page. Consider investing in acquiring product feedback if you re the sole seller or manufacturer of a given product OR if you have a very strong hold of the Buy Box.
37 37 INVENTORY QUANTITY The amount of inventory you have in stock is another Buy Box factor. Amazon is always going to default to the offer that a shopper is most likely to purchase. And so if you have only 3 pairs of Beats headphones left in stock while a competitor has over 100 pairs, (all things equal) Amazon is going to favor your competitor because of the possibility that the shopper may want to buy 4 or 5 pairs. In this case, you won t be able to fulfill this order and your competitor can, and so you will not own the Buy Box offer for this session. Especially if you re using FBA, restore stock weeks in advance so this doesn t impact your Buy Box ownership. Similarly don t endanger listings where you do have high Buy Box share by having low stock. In our other white paper, Product Discoverability on Amazon, we discuss which levers you can pull to drive shoppers to your most valuable Marketplace listings. With a complete understanding of these two overarching aspects of Amazon seller strategy, you can better prioritize your time and resources on the products that yield the biggest opportunities and better approach the Marketplace as a professional seller.
38 Amazon Sales Acceleration Program 38 MAXIMIZE YOUR REVENUE ON THE AMAZON MARKETPLACE In order to harness the full potential of the Amazon marketplace you need to understand the levers that drive performance. By working with a dedicated Amazon Advisor at CPC Strategy, you will optimize your channel profitability and execute an Amazon specific strategy with confidence. Your trusted Amazon Advisor will lead you to growth on the marketplace based on the needs and objectives of your business. We have the Amazon experience to produce results. Increase Revenue on Amazon Understand the Inputs that Impact Results Identify Best Practices for Selling on Amazon Schedule A Meeting With An Amazon Advisor contact@cpcstrategy.com
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