This article will cover how the algorithmic buy box pricing strategy works for Amazon and when it's best to use it.
How does the Algorithmic Buy Box Strategy Work?
SellerActive attempts to optimize your price by pricing up and down in a strategic way that lets us "check" whether you will capture the Buy Box at different price points. We start by making our best price estimate for capturing the Buy Box based on your selling statistics in comparison to your competitors selling statistics.
In the example image below, a red circle indicates we haven't captured the buy box from a competitor and a green circle indicates we have. Our first estimate prices your item to $50. Since you did not capture the Buy Box at that price we reduced your price to $25. You still didn't capture the Buy Box at that price so your price was reduced again to $12. At this price, you did capture the Buy Box so we increased your price to $18. We repeated this pattern until we settled on the optimal price of $20. We know $20 is the optimal price because we've tested a price of $21 and knew that you lost the Buy Box, so we cannot increase your price any further and remain in the Buy Box.
When should I use the Algorithmic Buy Box Strategy?
This is our recommended strategy for your Amazon inventory (especially FBA) when you have competitors on the same ASIN.
When should I not use the Algorithmic Buy Box Strategy?
- 1. If you are a brand new seller New sellers on Amazon are not eligible for the Buy Box. Using this strategy when you are not eligible for the Buy Box will cause your prices to decrease until they hit their minimum price.
- 2. If you are an MFN seller competing against FBA sellers
- 3. If you are a branded seller with no competitors on your ASIN