Marketplace Product Positioning and Ranking Algorithms

List the product, sit #fingerscrossed for a sale to come in.

Indian Marketplaces, I have seen are not putting in an active effort to educate sellers or even their catalog teams about the importance of listing quality and other factors which increase product visibility and help increase sales for sellers. Currently, everyone is just pushing seller ads for sponsored products.

Flipkart, Amazon are currently doing Sponsored seller ads on full scale. Snapdeal has just launched. Paytm will soon follow. Shopclues may or may not as they have many other “innovative” seller marketing services unlike the rest. There is no such thing on eBay and will never be I guess.

Sponsored Product Ads are something which should be used to promote new listings or newly launched products and should not be used as a regular feature for a sustainable online retail business, you need a lot of data and analyse it properly to directly co-relate ad spent to sales, the tools to do that just aren’t there. After some promotion the listing should self sustain based in interest, views and conversions.

When you list a new product or create a new listing it will generally come up around the middle of your product category page, depending on various other factors and not just that its new. It will depend heavily on price and the filter or sorting that buyer has applied. Generally, its set to sort by “Popularity” when a buyer lands on any product category page. Still, a new product appears in the middle which theoretically has no popularity factor.

There are 3 broad set of conditions (which I have been calling algorithms) which govern your marketplace sales:

  1. How the marketplace derives search results based on keyword
  2. How the marketplace derives listings for category page when you are browsing
  3. How the marketplace decides who gets the buy button

So let’s look at the possible factors which will help your listing move up in your category (covers point 1 and 2). I think these factors should be worked on to get more sales but it does not necessarily mean that they will work on all marketplaces as everyone has their own product listing and ranking algorithms.

  1. Listing quality: This is very very important. Your product pictures should be good, description should be crisp and to the point, and should include bullet points to highlight product features. Invest more time on cataloging and it will 100% convert to more sales. Any question that buyer may ask related to product should already be answered in the listing. If you still get any question for instance on Amazon or eBay, update your listing.
  2. Pricing: This is another huge factor which will help get sales, be competitive but you don’t necessarily need to be cheapest as many market places support quality of listing and seller rating more than pricing. This is where the ‘core strategy’ part comes in. Here is where you need to strike a solid balance to win buy box/button or move up your listing on category page. If someone needs more info on this, leave a comment, I’ll be glad to help.

After these 2 factors are looked after properly, then we should look into promotion of these newly listed products. This is where sponsored ads and paying the marketplace comes in. But I started doing that much later, I was able to scale pretty well keeping in mind above factors. If these two have been done properly generally the sales start coming in within a day or two and then it all depends on below factors and respective marketplace’s algorithm.

  • Searches for the brand or product and marketplace’s search algorithm
  • Click through rate from category/search result page to listing page
  • Conversion rate (No. of Purchases divided by Number of listing views)
  • Stock availability (Out of stock obviously will go to bottom or won’t appear at all). I have felt that items which keep going out of stock also see a decline in position. So make sure it does not go zero. Best example is eBay listing, more u sell, more upward it goes and once stock is 0, listing ends and you have to start from the start.
  • Seller account reviews/feedback/rating I have also felt that account age and number of orders seller is doing per month also plays a role in product position.

Rest is all in hands of account managers and marketplaces, how much support they can provide to enable all this. And some marketplaces have no algorithm whatsoever or maybe weird logics which are just way too hard to crack and highly inefficient, no matter what you do product will not come up, even after a lot of sales.

Below is my opinion of top marketplace’s algos:

  • Amazon – Strong data based algorithm and this is just for product positioning, getting buy box is another story altogether but concept is similar. Ads will benefit sales. Amazing Sponsored Ads interface.
  • FlipKart – Could not notice much, but I believe they also have some kind of algorithm in place but not as strong as Amazon’s. Very amateur Ads system, I do not understand how a competitive ad system can be made to work on fixed price of 0.50 paisa per click.
  • Snapdeal – Algorithm is definitely present, considers all factors, bit more heavy on pricing but overall good and manageable. Ads system just launched and its almost premature. I was actually told that the more amount you put in as a deposit more preference your ads will get. Search is good.
  • Paytm – Very new product as a marketplace. Absolutely nonsensical ranking/positioning algorithms, no tools for sellers to price competitively even. Search is also completely broken and gives non-sense results. Sometimes it will not return products even if searched by exact title of the listing which exists.
  • eBay – Excellent search and to the point ranking/positioning, main factors are how many units listing has sold and how many people are viewing and watching a listing, they are completely transparent about all this.
  • Shopclues – Similar to Paytm, technologically weak but they are better than some others in terms of operations and seller services. Search and product positioning have no visible or justifiable basis.

More about more things in following posts.

Feel free to Question or Ridicule.

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One Comments

  • yuvraj wadhwani

    April 13, 2016

    Interesting take. In my observation the ranking of products is affected by the following.

    1. Amazon – sales rank which js affected by velocity of sales.

    2. Flipkart – many factors with no specific importance.
    Location of buyer (this is a recent change)
    Number of ratings on product
    Actual rating of product
    Rating of seller
    Number of ratings of seller
    Product general conversion rate
    Product return rate

    Reply

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