I believe that I have identified what the problem is with FBA Sellers losing the Buy Box to FBM sellers from Monday onward.
I have emailed the Amazon UK managing director and the main text is given below. I would strongly urge ALL FBA Sellers to also email the MD about it at: managingdirector@Amazon.co.uk
The more voices raised about it, the more likely that something will be done.
Here is what I said:
"I would like to draw your attention to, and ask you to rectify, an event that has created a huge and disastrous problem for all Amazon Sellers who use FBA (Fulfilled by Amazon). This event threatens the whole FBA business model and is going to drive many FBA Sellers out of the market. I believe that I have identified what has caused this event and how to solve it.
On Monday 4th November, there was a seismic shift in the way that the Buy Box algorithm allocates the Buy Box. FBA Sellers who held Buy Box prices before Monday suddenly lost all or most of their Buy Boxes to sellers who use FBM (Fulfilled by Merchant). In order to regain the Buy Box, FBA Sellers have to reduce their prices to a level close to or equal to that of the lowest FBM offers. So for example I previously held many Buy Boxes at the price of £19.95, but now can only price most of them at £10 or less in order to win the Buy Box. This means that now I can only sell at break-even prices or at a loss.
FBA Sellers just can’t compete with FBM Sellers on low prices because of the much greater costs for FBA – on average Amazon takes 36% of my turnover for FBA transactions, compared with 19% for FBM transactions (and this differential gets worse as prices are lowered as some FBA charges are fixed costs rather than a percentage, so for a £10 FBA item Amazon take 40% of my turnover).
Seller Support have assured me that there has not been any change to the Buy Box algorithm this month, so this disaster for FBA Sellers was presumably not intended by Amazon.
I believe that a change to something else in the Amazon system on Monday has had an unexpected knock-on effect on the way that the Buy Box algorithm works.
On the Product Page that the customer sees, there are a number of boxes on the right-hand side of the page. Underneath the link to the page with all New and Used offers is a box titled “Other Sellers on Amazon” (the OSA Box). This shows offers that do not currently have the Buy Box, but are within the current Buy Box price range for these items.
The way that the OSA Box works was changed on Monday. I believe this is what has caused the change in the way the Buy Box algorithm works.
Prior to the change, where an FBA offer held the Buy Box, the OSA Box would only show other FBA offers that were within the current Buy Box price range for these items, and it would only show FBM offers if an FBM offer held the Buy Box.
After the change, the OSA Box now shows all offers that are within the current Buy Box price range for these items, regardless of whether the offers are FBA or FBM and regardless of who holds the Buy Box.
I hope that if you reverse the changes to the OSA Box, this will solve the Buy Box algorithm malfunction."
Make some noise guys.