The Most Profitable Product Categories on Amazon
01 Oct 2019
As one of the most popular online marketplaces available, Amazon offers sellers the opportunity to reach a wide and diverse audience. For customers, part of the appeal is the millions of products available for sale every day — across 36 Amazon product categories. From personal care items to the latest tech gadgets, customers are confident Amazon has what they need.
For sellers — especially if you’re new — this wide assortment of products makes it challenging to get established since there’s so much competition. Plus, it’s overwhelming to search through millions of products to find “the right ones” to sell. As a seller, you have to know which Amazon product categories generate the most sales.
Fortunately, Amazon helps you navigate the multiple options available. It regularly shares a list of the most profitable product categories in the marketplace.
To set you on the road to success, here are the top six profitable categories on Amazon and the best products to sell within each one.
What Makes Products Profitable on Amazon?
Before we dive into exploring the most profitable categories, let’s first have a look at what makes these categories so successful. In addition to sales numbers, Amazon also uses algorithms to flag best-selling products and the categories they belong to.
In addition to these factors, there are four characteristics of the products that sell well. As you think about the types of products you want to sell, keep these characteristics in mind. Each Amazon product category has a sub-section and thousands of products within each sub-section. The following characteristics help you see through millions of products and zero in on specific products to sell. Successful products:
- Fill a specific need. As a seller, market research is an important first step in deciding on your product selection. Based on the pain points your audience is experiencing, sell products that offer a specific solution. For example, if you’re in the fitness industry and your audience wants help tracking their fitness goals, consider selling tech gadgets like fitness trackers or smartwatches.
- Generate lots of traffic. Regardless of the time of year, profitable products attract lots of page views and sales. Be aware of categories with big, established brands since they’re harder to compete with if you’re new. Focus on niche categories with a steady stream of traffic.
- Include multiple positive reviews. The majority of customers research products online before they buy. Part of this research includes reading customer reviews and testimonials. You’ll notice that the most profitable product categories have products with thousands of reviews. This is an indication of engagement from customers. If the reviews are positive, there’s a good chance customers will choose the one product over another.
- Use Fulfilled by Amazon (FBA). Fast delivery is an expectation in ecommerce. By using FBA instead of fulfilling orders yourself, you can have confidence that products will be sent accurately, efficiently, and on time.
Now let’s look at the most profitable product categories and the best-selling products within them.
6 Profitable Product Categories to Build Your Store Around
1. Toys & Games
Every few months, studios like Disney and Pixar debut new movies for kids of all ages. With each movie comes a series of must-have toys, games, and gadgets. As a result, there’s a constant stream of new toys and games all year round — which is big business for Amazon.
In addition to movie-themed toys and games, there are also educational and generic games as well. To guide shoppers’ buying behaviors, Amazon publishes an annual Holiday Toy List. Whether customers are planning for events like birthdays or holidays, the list gives them insight into the top 100 toys and games of the year. With this guide, customers are more likely to buy something from the list.
As a seller, you can use this list to analyze the types of toys and games that appeal to kids and their families. New toys and games are added every year, so there’s also an opportunity to have your products visible to customers throughout the year once you decide what to sell.
Another helpful resource is Amazon’s best-selling products page for toys and games. Products on these pages are ranked based on which products have the most sales. These products are updated hourly, so, again, there are opportunities for you to have your products visible to lots of customers.
Currently, the toys that are generating the most sales are STEAM (science, tech, engineering, art, math) related. Toys and games that are also popular at the moment are water toys, LOL Dolls, Crayola products, and games like Jenga and Connect 4.
How to succeed in the Toys & Games category: Children decide which toys are popular year-to-year, so take the time to do your research to find trends. For example, the commercials that play in-between TV shows indicate what’s popular in a given season. Also, there are countless YouTube channels that feature toy videos. Once you decide on a niche to sell within — for example, board games, water toys — watch videos to see which specific products are featured most often. Chances are high these are the types of toys and games children are asking for.
Wherever customers go — from home to the office and everywhere in between — they’re surrounded by tech. The Internet of Things (IoT) is growing every day and new gadgets — for all ages — are released all the time. There are millions of products within the electronics category, so to help customers make buying decisions, Amazon shares its Best of Prime report every year. The list consists of products that Prime members bought the most of in a given year.
For example, in the 2017 report, the highest-selling products were all electronics:
- Fire TV Stick and Voice Remote Control
- Echo Dot
- AmazonBasics Cables
Currently, the best-selling electronics products on Amazon’s best sellers list include the Amazon Echo Dot, Fire TV Stick and Tablet, and smart plugs. All of these products have four or more stars and thousands of reviews.
Again, this page offers lots of insights for you to learn from. For example, of the eight products above, there are three Fire TV Stick products. As cable plans become less common as more people stream their favorite TV shows online, products like Fire TV are becoming more popular. It’s a one-stop option for customers to access games, apps, music, and thousands of channels. Since customers are looking for a product like this, selling it in your store will help generate more sales.
How to succeed in the Electronics category: If you’re a new seller hoping to break into the Electronics category, you should know that it’s dominated by larger, more established brands. As a result, it’s harder to stand out from the competition and sell lots of products. Instead of selling a range of electronic products, choose a niche within this category to focus on. Think about which areas of tech you’re most familiar with.
For example, within the Electronics category, there’s an ‘Accessories & Supplies’ sub-section. Within this category, you can define the types of accessories you’ll sell. This can be anything from computer accessories like memory cards and cables or home audio accessories like speakers or remote controls. The more niche you get, the more precise your market research will be. As you learn more about your audience and their needs and preferences, you can offer more specific types of products to appeal to a small, but motivated, audience.
3. Camera & Photo
The Camera & Photo Amazon product category is a sub-section within the Electronics category. Products in this category include a mix of cameras, camera accessories, and photography equipment.
Of the eight products above, five are security or surveillance products. As technology advances, more options are available to customers to protect their homes. And they’re easier to use and set up compared to earlier models. One product on the list above that stands out is Ring. It was launched in 2012 and has grown to become a leader in home security.
How to succeed in the Camera & Photo category: As an online seller, there are a few key points that you can learn from Ring’s success on Amazon.
- Focus on products with a specific use. Other security cameras can be used anywhere in the home, but they have limited capabilities compared to the Ring doorbell. In addition to showing customers who’s at the front door, Ring also has a motion detector feature that triggers at certain distances. By focusing on a specific use, Ring is able to sell a product that evolves to become more innovative to meet changing customer needs.
- Sell products that require refills. Instead of selling products that don’t require customers to come back, consider selling products where customers have to come back regularly. For example, in the Camera & Photo category, consider selling film to photographers who prefer it over digital options. They’ll have to come back regularly to buy more film. With Ring, customers have to sign up for a recurring monthly subscription.
- Get your brand in front of people. The more people see your brand and products, the better. Ring used a celebrity influencer and innovative marketing tactics to broaden their reach. As a seller on Amazon, you can use Amazon’s built-in advertising feature to get your camera products seen.
Experiment with each of these options to see which ones help you generate traffic and convert lots of customers.
4. Video Games
The Video Games category has grown to become one of the most profitable categories on Amazon. In fact, it’s worth $100 billion. To keep up with growth in this category, Amazon is hiring developers for its Amazon Game Studios project. The project was launched as a way to give game designers access to built-in integration for gamers to live stream on Twitch. Video game streaming is becoming a big part of Amazon’s business.
Amazon’s focus on video games provides sellers with an option to capture a piece of the growing market. The better you know the audience and the video games they play, the easier it becomes to offer the types of games they’ll buy.
Amazon’s Best of Prime 2018 list shows that Fortnite — available on Twitch — was one of the most popular video games during the two-day sales event.
How to succeed in the Video Games category. Twitch features are now exclusively available to Amazon Prime members — it’s called Twitch Prime. Members can download and stream content on Twitch. Members can also buy the games they’re watching on Twitch as gamers are live streaming. When you sell video games, promote their availability on Twitch. There are occasional rewards available to keep members engaged.
When Amazon first launched, it was one of the first online book retailers. Over the years, it’s evolved to become more digitally focused. Now, it offers digital options — like Kindle products.
Some of the best-selling books in this Amazon product category are epic adventure novels — many of which have been turned into blockbuster films. For example, popular books include The Hunger Games, The Hobbit, and Divergent. These books have four or more stars and thousands of reviews.
On Amazon’s best-sellers list, the books that sell the most copies are children’s books, literature and fiction, and self-help.
This list is updated hourly, so since avid readers recommend new books all the time, keep an eye on this list to see what’s trending.
How to succeed in the Books category:
- Find a need and fill it. There are 37 sub-categories in the Books category, so you can sell anything from art and photography books to test prep books. The point is to find a sub-category you and your audience are interested in and focus on that.
- Promote your products. Use your Amazon product landing page, ecommerce website, and social media to share more about the types of books you sell and a few samples. This way, customers can browse your collection and learn more about you.
- Follow audience interests. Use Google Trends or social media to keep up-to-date with the types of books your audience talks about and shares. This will give you insights into the types of niche books to sell.
6. Clothing, Shoes & Jewelry
Amazon has grown and evolved to become an online shopping destination for clothing and fashion accessories. Based on a 2018 survey by Morgan Stanley, some of the most popular items sold in the Clothing, Shoes & Jewelry category include:
- Casual tops (68% of respondents purchased)
- Casual bottoms (38%)
- Shoes (48%)
- Athletic wear (34%)
- Accessories (26%)
- Dresses (23%)
- Underwear (24%)
There are a few fashion brands like Michael Kors, Kate Spade, and Under Armour on Amazon, but customers are mostly shopping for low-cost — but stylish — options. Specifically, Amazon’s current best-selling products in this category are footwear and activewear.
ASICS men’s and women’s footwear are best sellers as well as water shoes from VIFUUR and SIMARI.
Millennials are behind Amazon’s success selling clothing online — and the profitability of this category. This generation is more likely to take advantage of Amazon Prime deals so that they receive their purchases quickly. The same Morgan Stanley report points out that the main reason customers buy clothing on Amazon is that shopping in the marketplace is easy and convenient.
How to succeed in the Clothing, Shoes & Jewelry category: Customers appreciate having a wide selection of products to choose from. To improve the convenience of shopping online, offer your products in multiple sizes, styles, and colors. This way, customers are more likely to have their needs met in one place before they buy something. Also, consider using FBA to fulfill customer orders and offer a flexible return and exchange policy. One of the reasons customers choose not to buy online is because they can’t try on the clothes first. Getting orders to customers fast and offering quick and simple returns act as motivation for customers to shop your products on Amazon.
Best Practices for Selling on Amazon
Now that you know what products to sell, let’s take a look at how to attract traffic and increase conversions. Even if your store sells the exact products your audience is searching for, simply listing products doesn’t guarantee they’ll be sold.
Ask Customers for Reviews
Whether you fulfill orders on your own or through FBA, a few days after customers receive their orders, send a follow-up email asking about the customer experience and purchase. Invite customers to share a review based on their insights. Reading reviews as well as the customer questions and answers section are part of the customer journey — the information is used as part of their research. The more reviews you have and answers to customer questions, the better because it shows that customers are engaged with your product in the marketplace.
Also, positive reviews create social proof. Customers are encouraged to buy products with a high star rating and positive reviews.
Get a Best Seller Badge
Amazon’s best sellers lists are updated hourly. For customers who start their search on these pages, these frequent updates are a great way to get your products seen, so customers can buy them.
This badge appears on your product details page, so customers have to click on your product after a search to see it.
To get a best seller badge and appear on the list, you have to sell the most products in your category. Start selling in a small category with less diversity. With the right advertising and marketing, you have a better chance of standing out. As you start to generate more traffic to your product pages and customers click on your branded landing page in Amazon, they learn more about your other products, even the ones without the best seller badge.
As you research your audience and the features they want in the products you sell, create a keyword list. For each product include relevant keywords in the listing title and in the description. For example, if you sell cell phone covers in the Electronics category and learn that impact absorption is important to your audience, add that to the title. When customers search terms like “absorption cell phone cover” or “impact absorption cell, ” your products appear closer to the top of the search results.
Set up an Amazon Giveaway
Amazon Giveaways are designed to help you generate lots of interest and traffic for your products. If you have a Professional seller account — vs. an Individual seller account — you can create giveaways for any of your products. At the bottom of your listings, there’s a section that gives you the option to set one up:
Research Amazon Product Categories
To be a profitable seller on Amazon, commit to ongoing audience and product research. This gives you insights into the evolving needs of your audience to make sure your products meet their needs. One way to stay up-to-date is to use Google Trends to see what types of products customers are interested in and searching for.
This approach can even help you plan for seasonality so that you offer the right products from the Amazon product categories above at the right time. For example, you can research to see what times of year customers are most likely to buy certain electronic products. You can start promotions in advance to attract customer attention and give them time to do their own product research before they convert and buy.
Research takes time, but it pays off because you’ll be able to consistently offer customers products that meet their changing needs and expectations.
By Michael Ugino