Posted by As a seller on Amazon, the product category you decide to focus on may determine the success or failure of your business on the platform. Having millions of products spread over numerous product categories and subcategories, how do you distinguish the chances of high demand and low competition? In this detailed guide, we will look at the top-selling product categories on Amazon, analyze their profitability potential, and give strategies for finding low-competition ones that can have high sales potential. In addition, discover how to utilize data to find best-selling products perfectly suited for your business. Feeling overwhelmed? The Amazon account management services can provide a helping hand in navigating this task. Let’s dive in!
What is Amazon Product Category?
Amazon product categories are the way to group a vast variety of products sold on the Amazon marketplace (the Amazon catalogue). Just as a grocery store has different aisles for different products (produce, dairy, meat, etc.), Amazon categorizes its products according to similarities. This simplifies the whole process where shoppers can easily find what they need and the sellers can better decide to list their products in the right place.
For instance, while selling a new smartphone, you would choose the subcategory “Cell Phones & Accessories” under the main category “Electronics.” This would allow the shoppers who were particularly looking for smartphones to locate your product. Applying appropriate product categories is important for sellers as well as buyers. For sellers, it will assist in enhancing product visibility and search rankings. For shoppers, it makes the purchase of preferred products much easier.
Gated & Ungated Product Categories
Gated Categories
They are categories restricted by Amazon that have to be approved by them before selling. Amazon limits these categories to prevent customers from being supplied with counterfeit or unsafe products and to keep the platform’s reputation untarnished. Getting ungated may be accompanied by the provision of documents or meeting performance metrics.
Ungated Categories
Such categories allow you to list and sell items without the need to seek approval from Amazon beforehand. It is a good choice for newbies or those who wish to sell immediately without upfront requirements.
How to determine which is Gated or Ungated?
Even though broader categories can be ungated, it might still require approval for the individual products within that category. It takes a lot of time to check which products are restricted because Amazon alters restricted product lists quite frequently. To know the limits in your Amazon Seller Central, you should go to Add a Product and then click Show Limitations, however checking each product limit manually is time-consuming when you have a large inventory. Fortunately, third-party tools and browser extensions can simplify this process substantially.
What are the Top-Selling categories on Amazon?
Shoppers buy a wide variety of products across different categories. Nevertheless, some categories are generally trendier and have a consistently high demand; however, others are not. The top-selling products also constantly change. According to Amazon’s data, these are currently the 6 most popular Amazon product categories:
- Beauty & Personal Care
- Home & Kitchen
- Automotive
- Clothing, Shoes & Jewelry
- Electronics
- Appliances
Are some categories more profitable than others?
A variety of factors like demand, competition, profit margins, and overall market trends influence the profitability of a category. Categories such as electronics, home and kitchen appliances, cosmetics/personal care and fashion feature high sales volumes as well as tend to have greater profitability. The average profit margins of the products on sale in the Amazon categories lie between 17% and 26%.
Although the popularity of a category does not automatically translate to profitability, it is still an essential factor to consider. One can advance in less popular categories as well. Take for instance; the popular Home & Kitchen category where 14% of sellers either realize no profits or are clueless about their margins. Popular categories attract many sellers, so it is equally important to assess demand among customers and competition among sellers. Lastly, success in any category greatly hinges upon product research, sourcing quality products, competitive pricing and factoring in Amazon FBA fees while calculating your profit potential.
What is the Best Amazon Category to sell in?
Choosing the right product category on Amazon is of paramount importance for the success of your product. Here are some key factors to consider:
Check Whether The Category is Gated
Start with figuring out if the category is gated or not, i.e. requiring approval from Amazon or not. Gated categories may involve extra operational processes like document verification. Although it poses a barrier an open gate can also mean low competition and higher profit potential.
Analyze Demand and Competition
Research categories that offer a healthy mix of demand and level of competition. High demand is good, but categories with lower competition can be easier to start in first. Use data to estimate the existing level of demand compared to the saturation
Consider Profitability
Taking how much it cost to sell on Amazon into account will give you a great picture of your profitability. Review the standard profit margins on your category and then factor in Amazon fees and your cost of goods sold (COGS). Products in very competitive categories often lead to “price wars,” therefore select those categories that will provide healthy margins.
Explore Subcategories
Do not just stick to the main category; explore the subcategories as well. The rise of more niche subcategories increases the chances of targeting a specific audience and producing better product visibility within that particular niche.
Leverage Your Expertise
Select categories that are most relevant to your own interests, experiences, and expertise. You may just have more internal driving force and knowledge in areas you are familiar with.
How to Find Low-Competition Products in Popular Categories?
A smart strategy is going deeper into subcategories of the large and well-known categories on Amazon to find smaller niches where the demand is high but existing competition is low. As the niche and specific subcategories are, the higher the chances of finding underserved markets that are not overly populated by other sellers.
Let us say, for instance, you go beyond the vast “Electronics” main category into subcategories like “Electronics > Portable Audio & Video > Boomboxes.” Exploring these micro-niches through the help of the necessary research tools enables you to find out the demand for these products, competition for these products, profitability data, and overall trending for products define a product as potential low-competition gems
How to find the Most-Selling Products to Sell on Amazon?
While considering what to sell on Amazon, finding truly best-selling, in-demand products on Amazon takes a comprehensive approach using multiple data sources:
Visit the Amazon Best Seller pages
The Amazon Best Sellers pages, updated every hour, showcase the most preferred products from various categories. However, competition is also high but such lists let us see the brands and products that are on the trend among customers.
Browse “Frequently Bought Together”
The “Frequently Bought Together” on product pages can spark ideas for product opportunities, especially the range of products shoppers tend to buy together.
Use Software Research Tools
Third-party software tools and browser extensions allow for examining sales volumes, likely revenues, competition levels and more to analyse the product or category-level insights.
Explore Other Marketplaces
A look at top sellers on major e-commerce sites like Aliexpress, eBay, and Walmart can give a clue as to what innovative products are trending and the vetting of demand across various e-commerce platforms.
Monitor Social Media
By following the trending products’ posts, videos, and ads on popular social media platforms such as TikTok and Facebook, it will be easy to identify the highly sought-after items that are most likely to sell.
Take a Look at Amazon Gift Idea Lists
Amazon’s “Gift Idea” lists, curated by customers, provide Amazon the insight into currently desirable and gifted products of different shopper segments.
The most crucial is the integration of data from multiple sources – bestseller lists or instincts are risky. Apart from that, each opportunity for each product should be validated by evaluating its costs, profitability, competition, search demand and any risks based on your business situation.
Conclusion
With millions of products distributed within a very huge range of categories and subcategories, Amazon offers a big chance – if you know where to look. Although common wisdom directs to mainstream product categories, the most valuable gems are tucked within niche subcategories that are not yet saturated. Discovering a profitable product or niche market is possible by using the right data, tools, qualitative study techniques and analysis while competing in a low-competition, high-demand market.
Do you feel lost selling on Amazon? Don’t hesitate to get professional help from the experts at MMF Infotech, one of the most established firms providing Amazon account management services. We provide comprehensive solutions that cover all aspects of your business on Amazon, from smart product sourcing and high-converting listing to strategic ad campaigns and a seamless fulfilment operation. Contact us now and let our expert team assist you to fully utilize the world’s largest online marketplace and unpack your full potential.
