Season 1, Episode 128

Losing the Buy Box to Wrong Competitive External Prices

 The start of 2024 has brought to light an intriguing issue for Amazon sellers: the flawed operation of Amazon’s pricing algorithms. These algorithms, originally designed to match products with competitive external prices, are causing considerable challenges for sellers due to erroneous product matches 

In this episode, Chris and Leah explore how these algorithmic errors can lead to sellers losing the coveted ‘buy box’, and examine the broader implications on fair pricing policies and seller strategies.

Show Notes

Transcript

[00:00:05] Chris: Hello everybody. This is Chris McCabe. Welcome back to another fantastic edition of Seller Performance Solutions. I’m here with Leah McHugh. We’re both of eCommerce Chris. Happy New Year once again, Leah.

[00:00:18] Leah: Thanks. That feels like forever ago.

[00:00:21] Chris: I was just thinking today, has it been two weeks yet since the year started?

[00:00:24] Leah: Nope.

[00:00:25] Chris: Absolutely not. It’s been maybe 10 days, maybe not even that much. So most of that is because I don’t know what day today is, which is not encouraging.

[00:00:35] Leah: It is the 9th.

[00:00:36] Chris: We have, however, seen some interesting trends that limped into 2024 from 2023 regarding erroneous bots. Very surprising, of course. Tied to pricing and tied to some examples you’ve seen. Some examples I’ve seen where there are bundles or multiple quantity, multi pack situations where the bots that Amazon is using, their algorithms are so inept that they’re not even reconciling whether the quantities are the same from one listing to the next. From one website to the next. Is that fair to say?

[00:01:15] Leah: That’s one of the issues. In general, I’m just seeing a lot of people losing the buy box because Amazon is matching their product to a competitive external price for the wrong product. So whether it’s the wrong quantity, or the wrong product configuration, or sometimes like I don’t even know where they’re getting their price from because I can’t find it. They don’t tell you where it comes from. It just says competitive external price, and then it’s up to you to find out what exactly they’re talking about. So I mean, certainly it’s interesting behavior from a company that’s currently being investigated for anti competitive behavior regarding pricing. But anyway, I’m pretty sure I’ve said that before.

[00:01:58] Chris: There’s been, there’s been friction around pricing and enforcement of the fair pricing policy and of pricing in general for years, right?

[00:02:07] Leah: Yeah, I’m seeing a lot more of it in the last few months and I’ve had a lot of people asking me about it where, Amazon is removing your buy box because they have found a external competitive price that is lower than the price that you’re offering it for, but often they are looking at completely incorrect product or who knows what they’re looking at, but it’s not the right price. So what ends up happening when we handle it because I handle it for our monthly clients. When we handle it, it takes minimum a day for that team to look at what you sent them and resolve it. Which means you’re essentially losing the buy box for at least a day because Amazon has made a mistake

[00:02:50] Chris: Or up to a week. We’ve heard of some people.

[00:02:52] Leah: I have people reach out to me who don’t know how to resolve it. And so obviously that takes longer.

[00:02:57] Chris: Well, they open cases.

[00:02:59] Leah: And it depends how busy the team is at any given moment, right? So in theory, they could reply immediately, but in reality it takes at least 24 hours,

[00:03:06] Chris: but it’s crazy that it’s happening in the first place.

[00:03:09] Leah: Well, I’m just not sure what they’re using. Like they clearly aren’t using the UPC to match this to external websites. Like are they just doing keyword searches because of course they’re going to get false positives all the time. How many products have very similar descriptions?

[00:03:25] Chris: Right.

Oh, tons. And the quantity thing, I mean, some of the complexity of using bots to chase down bundles.

[00:03:36] Leah: Not bundles, but generally multi packs. So you’ll have a product that’s listed for like $300 because it’s a pack of like thousands of units and they like, they want you to sell it for $10 because they’ve matched it to like the single unit price.

[00:03:50] Chris: Of course, that’s the first basic step. I mean, I’m not a software development engineer, but isn’t that kind of the first question you’d ask when you’re building these types of online tools.

[00:04:01] Leah: Like again, if you’re making a multi pack, a multi pack doesn’t have the same UPC as an individual pack. Why aren’t they using the product identifier?

[00:04:09] Chris: I don’t know. And I’ve wanted to ask different people. We haven’t had a chance yet this year to do it. Current Amazonians, former Amazonians. I’ve wanted to ask people just on the quantity piece. I get that things get rolled out that are half baked, half finished. I mean, that’s the Amazon way. It’s been that way for a decade and a half. Why this? I mean, how difficult is this? And it’s a real question. It’s not being snarky, sarcastic. I don’t have that background, but to me, this seems like the lowest hanging of the lowest hanging fruit that you could find.

[00:04:46] Leah: I don’t think it’s the developers fault.

I think from previous conversations with people on the development side and also on the operational side, those two teams have very limited access to each other. So the development team is just given whatever information that they’re given. They don’t see it as it works on a day to day basis. So any issues that come up with it, they aren’t even really told about until like way later, and then they’re supposed to fix it. But they’re just given the parameters that they’re given, and they have to work on that. It’s not like they’re actively working with the operational team to make sure that it’s rolled out in the most effective manner. And I like to say that Amazon is the king of minimum viable product, particularly when it comes to their own internal processes. There is no plan B. There is no backup. We’re just gonna roll it out as soon as it’s like, as close to ready to roll out as possible.

[00:05:43] Chris: That goes without saying. We shouldn’t even waste our listeners time talking about it because that’s a given. Until we find or hear otherwise that they’re turning the page on that type of launch. It doesn’t matter what time of year anymore. It used to be like, well, things that were supposed to be done by Q4 that weren’t, we’re just going to roll them out anyway, because we have to. Now it’s all four quarters.

[00:06:05] Leah: Yeah, so the quickest way that I have found to resolve this is kind of my old standby. You guys are probably sick of me saying this. But the quickest way that I have found to resolve it is to call and speak to Catalog. And ideally, you can show them the product that you think Amazon is incorrectly matching the price to, and they then transfer the case to the pricing team, who you can’t access. And then ideally within 24 hours, your buy back box is back up.

[00:06:35] Chris: Yeah.

[00:06:37] Leah: But I also have seen sellers who come to me with this and then I do a Google search and I do find that they are selling the product somewhere else cheaper. So make sure you’re not doing that before you open a case.

[00:06:46] Chris: Of course. You have to do your due diligence, do your checks first.

[00:06:50] Leah: And they are matching eBay. They are matching posh mark. They are matching all sorts of other marketplaces. It’s not just Walmart, or other third party websites.

[00:06:59] Chris: That’s nothing new.

Yeah. And the

buy box loss is alarming because with each passing day that you’re not winning the buy box, you’re losing all kinds of things. Sales, sales rank. Lots going on.

[00:07:11] Leah: So that’s the thing. We have clients who have tons of these on their account, and every single one of them is incorrectly matching to an incorrect external price.

[00:07:20] Chris: Right . It just reminds me of things like the bots that are used to catch certain keywords. Right? That like are never improved. Those are always flagging the wrong listings. They’re always inaccurate and sloppy. No one seems interested in correcting that for years. We’ve been complaining for three or four years.

[00:07:45] Leah: The development team’s given a list of keywords, and then they have nothing else to do with the operations team until the operations team is allowed to come back to them and be like, we need this updated.

[00:07:55] Chris: Right. But for years, three or four. No one seems to have any incentive to even marginally correct this stuff, let alone take it all the way to the finish line.

[00:08:04] Leah: I honestly, I think it’s a data issue. And I think it’s just kind of funny. Since Amazon is like a data company. But I think the issue is that all of these issues are being corrected at the lower level and so nobody’s actually collating the figures of oh, we incorrectly delisted 7, 000 listings because of this keyword that isn’t even a problem. Like nobody’s pulling that data together to see that, so there’s no incentive on their side to correct it because as far as they’re concerned there is no problem.

[00:08:32] Chris: Oh, no, they’re aware of that. There’s no way they wouldn’t be aware. No one’s figured out how much money they’re losing because of it, because they don’t want to know how much money sellers are losing, but also how much money they are losing from this. We always have to reconcile ourselves with, why are they still doing XYZ a certain way? Aren’t they losing tons of money because of it? Yes, they are. They know they’re losing money. They’re kind of putting the blinders on. They don’t want to know how much money they’re losing, nevermind how much sellers might be losing. And nevermind the best buyer experience for our buyers suffering because there’s less selection, because of these bots taking these listings down. That should be a given, but they just don’t want to know.

[00:09:19] Leah: No, I think to a degree that they know, I just don’t think that their answer is to make it better. Their answer is just to automate more of it. So they’re not spending as much people, hours, dollars on the problem. It’s just automated. And then, you know, on their end, who really cares?

[00:09:37] Chris: Well, they should care if they’re losing money. I get that sometimes, but yeah. They don’t want to quantify it. They’re in denial to the point of if we quantify this, heads are going to roll. We don’t want anyone to ask too many questions about how our team performs, how that team performs. At the executive level, the people we report to, we don’t want to call them out on the carpet. So we’ll just do the usual kind of muddy the water or make some excuses, because no one’s going to put our feet in the fire about how much money this is costing the company. It seems like basic math. If Amazon’s losing money, why aren’t people investigating it internally just for their own selfish reasons? And no one, us included, can really understand why you’re not motivated when you’re losing money. But what can I tell you? That’s part of the Amazon way.

One reason I’m glad that we’re going to Camp ECOM in Orlando next week is because we will meet some smaller, newer brands. And we can talk to them about trends. Like, are you really kind of aware of some of these things that are going to hamstring you when you’re starting out? And are you going to be surprised by it? Or by now has word gotten out that amazon talks a good game, but they don’t really fix things that have failed established sellers and could, inordinately hurt newer sellers who aren’t prepared for those types of hurdles.

[00:11:05] Leah: This is why we scare new sellers.

[00:11:08] Chris: Well, a certain amount of fear is good starting out if it makes you prepare in advance for something that could hinder you when you’re so focused on sales rank. You’re so focused on the manufacturing process panning out the way you wanted it to. You’re so focused on packaging and so forth that you’re thinking about compliance or potential ASIN restrictions and takedowns before they happen. Right. That’s one reason, you know, why we’re going next week.

[00:11:36] Leah: This is kind of my pet peeve, I guess, with this particular issue with the competitive external price. When it comes to keywords and when it comes to the way you create your listings, there are certain best practices you can use to reduce the risk there. But from what I can see here, there really isn’t a whole lot a seller can do to stop Amazon from incorrectly citing external competitive price for a different product. And so it puts them in this position of they have done nothing wrong, and there is really nothing that they can do to stop this from happening. It’s just kind of luck of the draw.

[00:12:16] Chris: Excellent note to close on, any questions on this, if this has happened to you, let us know. Of course, we’ve seen some examples. We’re interested in more examples as needed, or as they happen. Hopefully they don’t happen to you, but thanks again for listening to seller performance solutions.

We will catch you next time. Bye Leah. Bye.

Hosts & Guests

Leah McHugh

Chris McCabe

 

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