12 Facts Every Amazon Seller Should Know To Stay Competitive [Part 1 of 2]

12 Facts Every Amazon Seller Should Know To Stay Competitive [Part 1 of 2]

In the 25 years since Amazon was born, it has become the top eCommerce platform in the world and shows no signs of slowing down. As we grow closer to 2020, many sellers are looking to generate more sales and gain a bigger piece of the Amazon pie.

The first part contains 12 facts that you as Amazon sellers should know to stay competitive within the marketplace. Note that these facts are based on Amazon’s answers from the Hearing of the Subcommittee on Antitrust, Commercial, and Administrative Law, Committee on the Judiciary, Entitled “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship”.

1. What are the factors that determine which products are featured in the “Buy Box”?

Amazon’s algorithm predicts which listing a customer would choose when compared to all available offers by sellers and then highlights those offers in the product detail pages. Amazon identifies products that are featured in the “Buy Box” by considering factors including price, fulfillment speed, delivery speed, Prime eligibility, and seller performance.

2. What are the factors that Amazon’s algorithm considers when listing and ranking product search results?

Amazon’s algorithm considers many factors when listing and ranking products in search results. Customer actions (i.e. how frequently an item was purchased) are taken into consideration because Amazon believes that they are good indicators of what other customers may want to purchase.

Amazon also considers information about items, such as title and description, to identify the products that are a good match for searched terms. For instance, an item title including the words “car mattress” is likely to be a good match for a customer searching for “car mattress”. Amazon also takes into consideration item price and availability, because these factors matter to customers.

3. Does Amazon’s algorithm takes into account any of the following factors when ranking shopping results:
 – Whether a seller is enrolled in FBA,
 – Whether a seller has purchased ads on Amazon, or
 – Whether a product is a private label sold by Amazon?

Amazon designs its shopping and discovery experience to feature the items customers will want to purchase, regardless of whether they are offered by Amazon or one of its selling partners. Amazon’s algorithms do not take into account the factors above when ranking shopping results.

4. At the time that Amazon first started selling each of its private label products, what is the number of sellers offering any product sharing the same product category, on Amazon Marketplace?

Amazon offers customers a broad selection of private labeled products in highly competitive categories with many brands. Amazon does not compile data on the number of sellers offering a product in the same category as its private brand products.

5. What are the types of data that Amazon compiles, maintains, and uses to inform its development of Amazon’s private label products? Explain how each is used.

Amazon uses a variety of information commonly employed across the retail industry to inform its private labeling strategy. For instance, Amazon uses fashion and shopping trends highlighted in the press and on social media, suggestions from its manufacturers for new or complementary product lines, and gaps in the Amazon store’s product assortment relative to its competitors.

Amazon also uses public and aggregated data from its stores to identify categories and products with high customer demand over a given time period. “Aggregated data” is data that is aggregated across all third-party sellers and Amazon’s first-party sales and is therefore not specific to an individual seller.

It includes data such as aggregate sales reports at a product category level. The public data Amazon uses includes, for instance, offer data displayed on the public-facing portions of its website. Amazon is transparent about product popularity in its store. Anyone can visit Amazon’s product detail pages to learn a product’s best-seller ranking, in addition to its product reviews and star ratings, and make a determination on all of those bases about whether a product is selling well.

6. Is there any distinction between how Amazon uses data it collects from first-party sales and data it collects from third-party sales?

Amazon prohibits the internal use of third-party sales data in ways that are not applicable to the use of data from its first-party sales. For instance, Amazon prohibits Amazon’s private brand products business from using individual sellers’ data to decide which products to launch and make sourcing, pricing, or inventory decisions for its private brand products.

Amazon employees are only permitted to use individual sellers’ data to support that seller or enhance or protect customers’ experience. While internal teams are permitted to examine aggregated selling partner data for business purposes, that is no different from the uses that other retailers make of their store sales data.

7. What types of information does Amazon track on Marketplace transactions?

Amazon collects data about sales in its store to constantly improve the customer shopping experience, as well as the selling experience for its selling partners. For instance, Amazon uses aggregated sales data to power the recommendations and analytics through various tools such as Amazon Brand Analytics, Amazon Retail Analytics, Selling Coach, Business Advisor, Business Reports in Seller Central, and others; as an input into its fraud detection models that help protect its customers and selling partners.

8. Which categories or teams of Amazon employees have access to sales data about a Marketplace seller’s account?

Amazon prohibits the use of sellers’ non-public data to compete with them through Amazon’s first-party offerings, including through Amazon’s private labeling development, or retail sourcing, pricing, or inventory decisions. Amazon employees are permitted to use seller-specific data only to :support that seller (i.e. providing data-driven pricing recommendations in Selling Coach), protect Amazon’s customers (i.e. detecting fraud and abuse), or run Amazon’s store (i.e. deciding how to allocate inventory space among sellers within a fulfillment center).

Amazon trains employees on these policies and regularly audits its systems and processes for compliance. Amazon is also continually improving its technical controls to automatically enforce this policy, and many tools in use today are already configured to omit seller data or have strict permission requirements.

9. When detailing certain requirements on Amazon Seller Central, Amazon states, “Failure to comply with these requirements may cause a product to be suppressed from Amazon search results.” Is suppressing a product from search results the same as de-listing it?

Suppressing a product from shopping results is different from removing the listing from Amazon’s store. Suppressing a product from shopping results hides the listing from search and personalization, yet the product remains buyable in Amazon’s store. Amazon may suppress a listing from shopping results when a listing risks impairing the customer shopping experience for reasons such as missing or incorrect information.

Product listings may be un-suppressed and reappear in shopping results when errors are corrected. Sellers are able to run suppression reports and correct or manage suppressed listings through the “Manage Inventory” tab in Seller Central.

Simple errors such as missing images and or category fields can be updated in as little as 24–48 hours. In contrast, Amazon may remove or “de-list” a product from its store where the product is illegal, prohibited by Amazon’s policies, or otherwise presents a risk of fraud and abuse. Once removed from Amazon’s store, these products cannot be purchased by Amazon’s customers. Learn more about suppressed listings HERE.

10. What are the character limits Amazon sets for the listing titles and descriptions on Marketplace? Do the catalog listing rules and product ingredient rules that Amazon applies to sellers also apply to Amazon’s private label products?

The precise limits vary by locale and product type, but Amazon generally permits titles up to 200 characters and descriptions up to 2,000 characters. Amazon aims to offer customers the best quality products under its own brands, Amazon generally holds its private brand products to even higher standards for better customer experience.

11. Has Amazon ever prevented reviews from being posted to a seller’s account because that seller’s product was competing with an Amazon product?

Amazon has never prevented reviews from being posted to a seller’s account because that seller’s product was competing with an Amazon product. There are many reasons why a review may not be posted, including failure to comply with Amazon’s review guidelines such as when the review is submitted or paid for by the seller.

12. For each month since July 2018, what is the average number of listings within the top 10 search result listings that were paid listings?

The number of search results Amazon returns on the first page of discovery depends on several factors, including whether the customer is accessing Amazon on a desktop or mobile device. Shopping results on mobile may include 14 to 20 products per page, excluding sponsored listings. In each month since July 2018, Amazon showed 3 to 4 sponsored listings on the first page of shopping results on mobile. Shopping results on desktop may include 16 to 60 products per page, excluding sponsored listings. In each month since July 2018, Amazon showed an average of 7 to 11 sponsored listings on the first page of shopping results on desktop.

Final Thoughts

After looking at the 12 data-driven facts above, you should now have a better understanding of how Amazon ranks products, and how they create their private label products using aggregated data, product listings characters limit, and many more. Be sure to leverage these to make necessary updates to your Amazon business. Also, if you haven’t checked out the data-driven method to discover and scale your next Amazon product in 2020, please do yourselves a favor and watch the videos HERE.

Part 2 will be released on the 23rd of this month, so stay tuned for an additional 12 facts every Amazon sellers should know to stay competitive and grow their businesses.

Eugene Cheng

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