The Amazon buy box algorithm is changing to meet the demand of the COVID-19 pandemic. In addition to Amazon’s recent policy changes on renewing inventory for essential and non-essential products, the company is turning to Sellers to ship their own products.
Since Amazon began prioritizing essentials, merchants started seeing conversion rates drop on many items that had extended delivery times.
To combat this, for the first time ever, FBM items (fulfilled by merchant) can win the Amazon Buy Box, even when FBA (fulfilled by Amazon) items are available. Read on to find out what this means for your Amazon business.
Amazon’s History of Changes in Response to COVID-19
Since the beginning of Prime, it’s clear that Amazon has given a competitive edge to items that are shipped through the FBA program. Traditionally that made sense because items in FBA were backed by a 2-day shipping guarantee.
However, with an influx of traffic during the coronavirus pandemic, Amazon has had no choice but to change the way they operate their fulfillment centers.
Segregation of Essential & Non-Essential Items
In March, Amazon announced they would be prioritizing essential items like household staples and medical supplies coming into their fulfillment centers over items deemed non-essential.
By limiting the items coming into their fulfillment centers to essentials, Amazon can reduce the struggle they’re facing in their warehouses and receive, restock, and ship essential products to customers more efficiently.
What this means for Sellers of non-essential items is that Amazon warehouses are not accepting, labeling, or taking over customer service for non-essential FBA items.
Categories that are in high demand and considered essential include:
- Health & Household
- Baby Products
- Pet Supplies
- Beauty & Personal Care
- Industrial & Scientific
In addition to preventing products from entering their fulfillment centers, Amazon is currently not accepting any request to re-classify listings in an effort to prevent unqualified category Sellers from using FBA resources. This means that a product’s essential status or category is determined based only on its current listing.
Even Essential Products May Be Subjected to Delayed Shipping
Still, many merchants who have products within the essential categories are confused about why some products within the categories have the ability to be shipped to Amazon, while others continue to be turned down.
If you have products that are classified correctly and you are not able to create a shipment, that means that the product in question is not prioritized over other essentials at this time and that’s the reason you are noticing delayed shipping dates on all of your FBA items.
Reconsidering Shipping Logistics
If that’s the situation you’re in, then Amazon’s new policies come with an incentive for you to fulfill your own orders.
In an attempt to fulfill more orders in a faster time, Amazon is giving up control over the delivery process & changing the algorithm to give preference to merchants, like you, who can fulfill orders faster than FBA.
Sellers of Non-Essential Products May Need to Move to FBM
For the first time in Amazon’s history, merchant fulfilled customer orders may be given priority for the buy box over Amazon.
Essentially, this means that Amazon is no longer prioritizing FBA in its equation for winning the buy box. This could be the solution for Sellers who are experiencing a freeze-out on shipping inventory to FBA and worried about how this will affect their sales.
This means that when shoppers check out, if a Seller can provide faster shipping options than Prime-eligible items, they will be prioritized. Merchants can potentially process and ship an order from their own facility with faster delivery options than Amazon’s facilities.
We won’t call this a solution, but in these grueling times, it can be an option to offer shoppers and merchants much more flexibility and to offer Amazon an opportunity to fulfill demands more effectively.
Third-Party Sellers Can Reap the Benefits
Third-party sellers, in particular, can benefit from this circumstance by selling out-of-stock products.
For example, because big brand cleaning products like Lysol that are normally fulfilled by FBA are now regularly in and out of stock, third-party sellers can swoop in and win the buy box regardless of FBA or FBM status.
However, shoppers still aren’t used to trusting third party delivery so there may very well be lower conversion rates on these products.
The Bigger Picture
Amazon hasn’t given a definitive time period for how long they will keep the changes in place. So it’s essential for the health of any businesses to prepare for it to be a while before things return to normal and adjust accordingly.
As Amazon combats worker strikes and navigates recruiting more workers to satisfy demand, changes to shipment processes will ease a bit of the burden by reducing pressure on Amazon’s fulfillment network.
Staying diligent regarding how your business can thrive despite the changes can put you in a position to help customers better purchase and receive items in addition to stabilizing your revenue without being impacted by fulfillment delays.