How to identify a profitable Amazon Niche in 5 easy steps

| Angela Perara Last updated 7 Oct, 2021

It’s a great feeling Once you decide to become an Amazon seller. When you have a product, and you’re crazy about it, you’re all set to go. However, before starting selling on Amazon, the most crucial decision is to select the profitable niche.

It can be a fun and profitable idea to sell your products on Amazon. Some people find it beneficial to give up their 9 to 5 jobs and sell on Amazon full time.

If you are starting your online business for the first time, it can be tricky. You can learn lots of new things. Now, you might be thinking about where I can take help? There are plenty of guides and tutorials available that can help you to get started.

Read this guide till the end because you’ll find out how to find the profitable niche and products for selling on Amazon.

How to find a profitable Amazon niche?

When you decide to start an Amazon business, the first and most important thing is selecting the right products. Here, we have identified five steps that will help you find a profitable Amazon niche when followed.

Is there the concept of good or bad products?

Yes, there are some good and bad products to sell on Amazon. Some products are in-demand, and they sell incredibly well. In contrast, some products remain in the warehouse and gather dust. Don’t worry because we will share a guide with you to find good and bad products.

How a product becomes good?

A good product will not be seasonal or limited to a national holiday or a particular event, like Christmas novelties.
Don’t choose products that have transparent costs. Go for ornaments and unique items, and it will be difficult for the customers to find the exact price. It can help you to set higher profit margins.
Mainly the products between $15 and $200 sell more on Amazon. When the price is lower than this, the product becomes tacky. When the price is higher, it becomes luxury goods, and many customers hesitate to buy them online.
Choose light and easy-to-pack products. Awkward packaging and heavy products can quickly reduce your profit margin.
Try to find quirky products that are not readily available in local stores because these products sell more.
Choose products that offer higher markup. It will help you get a reward for the work you put in. Your goal should be 100% markup.

Which products to avoid?

Some electrical and mechanical toys and games may have fragile parts and are likely to require warranties. These can cause problems for you and eat your profit margin since you are likely to receive a higher number of complaints and returns.
Products which are available at local outlets at the same price
Fragile and delicate items are more prone to damage, and they require specialist packaging.
Products that are branded or contain a trademark. When you sell counterfeit and fake products, it will not only end your profile on Amazon, but you’ll also be answerable to the law.
Those products sold in great numbers by other sellers, especially those sold on eBay, because you can’t compete with them in terms of pricing

5 Easy Steps to finding a profitable Amazon niche

So, all these tips will help you differentiate between good and bad products for selling on Amazon.

1. Decide what products to sell

As mentioned earlier, the most challenging thing for starting your online business is how to decide which products to sell? If you’re struggling to shortlist some products., you can still benefit from tools specifically designed to help your product research.

One of them is Jungle Scout. It has a handy product database, which Amazon sellers can filter products by price, scalability, dimensions, ratings, and estimated sales.

You can use their app to check whether the product transforms consistently or not. Another exciting feature of Jungle Scout is Niche Hunter. Users can use it for finding products by entering the keywords.

Jungle Scout is available in Chrome extension and web app, so find out which one suits your needs? AMZ Scout is another helpful tool with a full suite of tools for Amazon sellers. It offers product research and tracking tools.

Research product trends

You’ll more than likely use product search tools to aid your decision. However, you can accelerate the process by analyzing product trends. This approach may help identify useful categories of products or even the products themselves.

Trending products are sold in large quantities in a short time. You can find trending products in different ways, such as:

Amazon – Amazon’s bestseller feature allows you to find trending products quickly. Go to Amazon and click on the best-selling items on the screen’s left side and apply filters by clicking the individual categories.

Moreover, visit the ‘Movers and Shakers’ section on Amazon because it includes the products showing a significant increase in sales. You can use them to get an idea of trending products.

Social Media – What else can be better than social media for finding trending products? Whenever there is a hot selling product, social media platforms. People love to talk about such products.

Some sites and tools allow users to find what makes people excited. Moreover, some platforms like Instagram and Pinterest are loaded with photographs of trending products.

Niche Websites – As the online business is getting popular, many websites have only been designed for one purpose. That purpose is to help you find the great selling products out there.

Some best websites are Trend Hunter, Uncrate, Werd, Springwise, Cool Material, and Canopy.

Before buying any product, check its popularity by the most popular tool Google Trends. Put your product’s name in the search bar and find out whether the product is hot selling or not.

Trending products help generate sales, but they will not be long-lasting. So, keep this in mind when selecting trending products.

2. Find keywords and check their search volume

Any word that buyers use to find a product that they want to buy is called a keyword. Keywords can help sellers to find the search volume and market capacity of the products.

Moreover, the right key phrases and keywords bring more traffic to your store and more sales. Online Keyword Tool can help you find the keywords and their search volumes.

Popular tools for Amazon keyword research are:

Merchant Words – This tool provides precise and relevant keywords that the buyers are likely to search about that product. This tool is paid, and it will cost you $60 per month, but it offers some fantastic features that make it worth buying.
Google Keyword Planner – This fantastic tool can produce some fantastic keywords and phrases related to your search. Enter your primary keyword to obtain different variations, which you can use to bring more traffic.
Keyword Everywhere – A very effective paid tool, offering 100000 credits for $10 without any time restriction. Moreover, it tells the keyword’s trend and the search volume as well. You can use it to get relevant keywords.

Regularly using these tools will help keep your keywords updated. Moreover, these tools help you find that products aren’t already saturated on Amazon.

3. Check the product’s competitiveness

Regardless of what you are selling on Amazon, you must ensure that the product is competitive -otherwise, it’s worthless. When you decide to sell a product, look at how many other sellers are selling the same product and how they’re doing.

Competitor research can help you find out different things about the products, such as:

Inventory
Price history
Number of positive and negative reviews
Rank history
Number of sellers selling the same product

During competitor research, you have to do some quick things, such as:

Check customer reviews

Check the product reviews you want to sell. If each seller has over 300 reviews, the product is likely widespread and provides good sales. Furthermore, it shows that the market is saturated, and you’ll find it challenging to set your feet with this product.

Check the negative customer reviews and use them to your advantage. Find out how you can make this product suitable for you.

Check out your competitors

It’s essential to find out how many are selling the same product and how they’re doing? It can help you decide whether the product is right for you or not.

Ensure that Amazon isn’t selling the same products. If it’s the case, don’t waste time thinking about this product because you can’t compete with Amazon’s discounts. Competitor analysis is the best way before diving into any market.

Price

You may have an idea of how much you can sell and how much profit you can make. Compare your set prices with those who are already selling these products. If you feel that you can’t compete with those sellers, and if you do so, you may be at a loss, leave this product because it’s not for you.

You can use different tools to track the product price over time. One helpful tool for price tracking is CamelCamelCamel. Use this tool for revisiting the product later.

Competitor’s research is essential before you finalize any product. After thorough research, if you feel that you can compete on price and offer a quality product and service, the product is right for you.

4. Explore your competitor’s weakness

You might be thinking about how it can help find the right product? If you have decided to sell the product that many other sellers are selling, you need to take advantage of everything you can. Find out the weaknesses of others and identify how you can do it better than others.

If you’re looking for the competitor’s weakness, customer reviews are a goldmine for you. Reviews can indicate why customers were not happy with them. It may be late delivery, and you can do it better by delivering the product on time.

To stand out from your competitors, make the buying experience of customers enjoyable. This engagement with customers helps win their trust and loyalty.

5. It’s time to source your niche products

Once you have selected the products you are going to sell, it’s time to source them. Manual sourcing of products can be frustrating and time-consuming. Don’t worry because you can take the help of some online tools to streamline the sourcing process.

The best way is to find online suppliers running the search and find 10 to 20 suppliers. Search the products in the search engine, for example, “gold necklace suppliers.”
The next step is to write an email and ask about the prices, discounts, delivery times, and all the information you need. After getting responses from suppliers, compare them and see which one is best for you.
After comparing the information, you should have a shortlist of potential suppliers. The next step is to obtain product samples to compare them before making your final decision.

If suppliers want you to sign a contract with them, carefully read it and don’t sign it in a hurry. Before establishing a business relationship with any company, use tools to verify the legitimacy of the company.

Next Steps

Starting your own business is challenging. Amazon is a well-known marketplace for both merchants and buyers. It provides sellers with a platform that has a robust distribution network and client base to realize their business dreams.

Whether you’re just starting as an Amazon seller or want to extend your existing product offering, these five steps will help you identify a profitable niche on Amazon.