Shopping is an inseparable part of our lives perceived as pleasure and fun only by some customers, while others see it as necessary, time-consuming and tiresome at times. It’s no wonder that e-commerce has won a lot of customers by being transparent and very convenient as well as incredibly time-saving in our fast moving life. Shopping online has become such a smooth experience for many that customers simply and effortlessly switched to it in the pandemic and after-pandemic period. Leading e-commerce companies strive to make the shopping experience more convenient by providing top-notch software solutions and impeccable service in combination with selling just about any item a customer wishes to buy. As long as e-commerce attracts so many customers, it drives successful retail businesses with one major question on the minds of entrepreneurs: What products should they sell to get some profit?
In this article we’ll focus on Amazon and look into the following points to get a working answer to the question above:
- Amazon’s most popular categories in 2022
- Other e-commerce platforms and their top-selling items
- Keeping up with the trends
What is Amazon and some key statistics
Amazon is a leading e-commerce company and a recognizable solution for many e-commerce business owners. It’s one of the world’s most valuable brands ($684 billion) with net revenue of $386 billion in 2020. Founded in 1994 by Jeffrey P. Bezos with a focus on e-commerce, cloud computing, digital streaming, and artificial intelligence, Amazon is now a multinational and fast-growing giant.
The United States was Amazon’s biggest market in 2021 with $314 billion in net sales. Germany was ranked second with $37.3 billion and the UK -third with $31.9 billion.
Amazon’s popularity with customers is proven by the following jaw-dropping numbers:
- Amazon has over 300 million customers all over the world.
- Amazon.com boasts about 2.7 billion visits every month.
- The total number of households in the United States with an Amazon Prime subscription in 2019 was about 66.4 million households. This number is expected to increase to 76.6 million households by 2022.
- The customer satisfaction score of the online retailer was 78 out of 100 ASCI points.
This popularity with customers makes Amazon a perfect spot for your business. If you want to join the club and sell on Amazon, you might want to know that, according to Jungle Scout’s 2022 State of the Amazon Seller Report, 76% of sellers on Amazon are profitable in 2022, despite the disruptive effects of the Covid-19 pandemic. That makes ¾ of satisfied sellers who chose Amazon as their e-commerce platform. These facts and numbers are persuasive enough to start researching the issue of the best products to sell on Amazon.
Who are Amazon customers?
To get an idea of what items to sell on Amazon it’s logical to find out who’s shopping there.
According to Querysprout, Amazon targets middle and upper-class consumers of both genders equally with home computers or smart devices aged between 18-44 as of 2022. Amazon’s clients are described as easy-going, ambitious and determined. It has to be mentioned that 60% of Amazon’s target market is from the United States. Based on a survey by Feedvisor back from 2019, 89% of buyers agree that they prefer to buy products from Amazon to other e-commerce sites. We doubt that the number has changed significantly over a couple of years. What we are sure of is that this kind of trust and loyalty has to be earned by a set of reasons we’d like to explore.
What is it that Amazon’s customers value so much? The following graph dates back to 2020, but it can give a clear idea of the main reasons for clients’ loyalty to Amazon.
- According to a survey by Convey, a logistics software provider, the number one reason for Amazon’s customer loyalty is fast and free shipping. Almost 80% of customers mention it. Amazon is indeed synonymous to fast and seamless delivery of the items sold and in the case of FBA it is all in the hands of professionals.
- Second reason is extensive product selection, mentioned by close to 70% of clients. Amazon sells about 75 million different items to attract its customers.
- Being a prime member is listed third with more that 65% of answers. Prime membership gives various benefits and deals to its owners.
- The best pricing is mentioned by half of the clients.
- Other reasons worth mentioning are the easy return process, product reviews and recommendations and the software’s convenience.
This gives us some information on what the customer looks for on Amazon in terms of service, which may help a seller to opt for the necessary software, pricing strategies, delivery variants to live up to these high expectations.
How to find the top-selling products on Amazon?
Now let’s turn to our main subject–product choice. It may sound like trying to find The Holy Grail as the world of commerce is changing fast and drastically at times. What might bring profit today, could as well become obsolete tomorrow. So the only way is to stay on top of it and research. The main point is that this research is far from being a one-day task. There are some ways to find information on the issue of the top-selling items on Amazon. The tactics of product research might and should change over time as consumer tendencies are changing every day. Most likely there should be a combination of the following methods to help your business not only start successfully but keep it afloat. So let’s look at some ideas of product research.
Amazon’s most popular categories: what to sell on Amazon in 2022
To find the top-selling items on Amazon it seems at first logical to look at the most popular categories among sellers. The basic law of microeconomics on the equilibrium of supply and demand should apply here. In other words, when there is demand, there will be supply.
According to Jungle Scout’s 2022 State of the Amazon Seller Report, these are the top categories with the percentage of sellers who sell products in them.
Amazon product research
1. Home & Kitchen – 32%
2. Beauty & Personal Care – 23%
3. Toys & Games – 20%
4. Clothing, Shoes & Jewelry – 18%
5. Health, Household & Baby Care – 17%
6. Sports & Outdoors – 16%
7. Arts, Crafts & Sewing – 15%
8. Books – 15%
9. Kitchen & Dining – 14%
10.Baby – 14%
11. Electronics – 14%
12. Tools & Home Improvement – 13%
13. Pet Supplies – 13%
14. Office Products – 12%
15. Garden & Outdoor – 12%
16. Grocery & Gourmet Food – 10%
17. Appliances – 8%
18. Cell Phone & Accessories – 8%
19. Automotive Parts & Accessories – 7%
20. Handmade – 6%
21. Apps & Games – 6%
22. Industrial & Scientific – 5%
23. Computers – 5%
24. Video Games – 4%
25. Collectibles & Fine Art – 4%
26. CDs & Vinyl – 3%
27. Luggage & Travel Gear – 3%
28. Musical Instruments – 2%
The main problem with the list of top categories is that you might hit an oversaturated market with a lot of competition and additional costs on advertising of these top-selling items, which in turn will minimize the profit. If you decide to compete with lots of other businesses, you might want to make sure that your products are unique to stand the tough competition. One has to bear in mind that top categories mean the competition with Amazon and its Amazon Basics items, which are most likely cheaper and will be featured ahead of other products, even if they are not ranked as high.
Other e-commerce platforms and their top-selling items
Another way to look for the best-selling products is to use other e-commerce platforms like eBay, Shopify, Alibaba, Etsy, Walmart, and Facebook marketplace with their bestseller tabs to get an idea about the most popular items sold. It might help to see the trends and to change and adjust your inventory when selling on Amazon. As the world of e-commerce is evolving, many of the businesses diversify by selling on various platforms. According to
Jungle Scout’s 2022 State of the Amazon Seller Report, top 3 alternative e-commerce platforms for Amazon sellers are:
1. eBay – 28%
3. Etsy – 13%
12 % of Amazon sellers also sell on Walmart Marketplace and the same number-on Facebook Marketplace.
Keeping up with the Amazon trends
Another idea to find what to sell on Amazon is to rely on trending words and use various search tools like Trend Hunter, Google Trends, and YouTube. If you do it regularly you might discover a trending niche locally or even globally and do some further research on the opportunities of selling on Amazon with the tools that work for Amazon specifically like AMZscout or Jungle Scout.
A very similar strategy is to rely on trending news which might give an idea of what items will be in demand as a result. A good example may be the one with yoga mats in the last couple of years. People started spending more time at home teleworking and realized the necessity of training to keep fit. As a result, the market of yoga mats is expected to reach $13.49 billion in 2025.
It might be logical to review social media hashtags, influencers, and trending posts, keeping in mind the fact that social nets turned into a very effective selling tool.
In a nutshell, whatever strategy or combination of them you choose to research the best-selling products, it’s crucially important to follow the trends in e-commerce.
Popular or top-selling items vs profitable items
When you sell on Amazon or any other marketplace, finding top-selling products doesn’t yet mean becoming a successful business. The point here is that top-selling items are not necessarily the most profitable ones. If we turn to the finding of Jungle Scout on profit margins of the most popular categories of products, that is what we see:
Finding profitable products
|Product category||Profit margin||Rank in popularity|
|CD & Vinyl||27%||26|
|Apps & Games||25%||21|
|Industrial & Scientific||25%||22|
|Luggage & Travel Gear||25%||27|
|Grocery & Gourmet Food||23%||16|
|Arts, Crafts & Sewing||22%||7|
|Beauty & Personal Care||21%||2|
|Sports & Outdoors||21%||6|
|Automotive Parts & Accessories||21%||19|
|Garden & Outdoor||20%||15|
|Toys & Games||20%||3|
|Tools & Home Improvement||20%||12|
|Clothing, Shoes & Jewelry||20%||4|
|Kitchen & Dining||19%||9|
|Collectibles & Fine Art||19%||25|
|Health, Household & Baby Care||19%||5|
|Home & Kitchen||19%||1|
|Cell Phones & Accessories||18%||18|
The main takeaway here is that profit margin is the crucial consideration when selling on Amazon. The best way to become a successful business is to find a product that is high in demand and low in competition, which makes relying on popular categories alone unwise. One has to consider the fact that some profitable categories require specific experience and education. Musical instruments and automotive parts make a good example here. Some categories are oversaturated and demand a lot of marketing efforts. At the same time the least popular categories from the top 28 are in fact the most profitable. We have to say that when you sell on Amazon with 16% profit margin (as the categories at the end of the profit margin list) it might sound really good, until you see 25-32% profit margin with some categories at the top of the list. That is twice the profit. Math speaks for itself here.
Amazon business models or how to source products
When one enters the world of e-commerce, the question of what to sell on Amazon or any other marketplace overlaps with the choice of the business model. This choice actually predetermines and sometimes limits the items you decide to sell. Let’s briefly look at the six most popular business models people use to sell on Amazon. Based on Jungle Scout’s 2022 State of the Amazon Seller Report, sellers choose the following models:
- Private Label: 59%
- Wholesale: 26%
- Retail Arbitrage: 26%
- Online Arbitrage: 23%
- Dropshipping: 10%
- Handmade: 8%
It has to be noted that overlap in percentages means that some sellers use more than one model.
Private label is the most common among Amazon sellers. It actually means identifying a product with high demand and low competition, finding a manufacturer to produce it, branding and promoting the product on Amazon. When compared to the other Amazon business models, private label is the most expensive business model. 61% of private label sellers need about $2,500 or more to start the business.
Wholesale is buying low-cost or discounted items in bulk and then selling them on Amazon as individual units.
Retail Arbitrage is reselling online low-cost or discount goods purchased from brick-and-mortar retail stores.
Online Arbitrage is finding a low-cost or discount product on one website or online marketplace and selling them on Amazon.
Dropshipping is a business model which means that instead of keeping their own product inventory, Amazon sellers transfer their customers’ orders directly to the manufacturer or supplier. It’s worth mentioning that drop shipped products don’t count in the average inventory as they are not pre-purchased. So inventory turnover in accounting is not an issue for a dropshipping business.
Handmade, as prompted by the word itself, creating your own products by hand and selling on Amazon.
These business models mentioned some ways of sourcing the items to sell on Amazon like brick-and-mortar retail stores, online marketplaces, manufacturers and a seller’s creativity in the case of handmade items. Garage sales would work in the case of selling used items. If we go by countries, China still takes the lead with about 74% of items sold on Amazon. The US with 26% and India with 10% would conclude the top 3 countries where Amazon sellers get their inventory.
One more thing affecting profit when you sell on Amazon and generally the way Amazon business is done, is the fulfillment method. Whether you choose FBA (fulfillment by Amazon) or FBM (fulfillment by merchant), the main consideration is that the method should be beneficial to your business strategy.
Choosing the best inventory for your Amazon business and keeping it profitable requires considering a lot of variables like:
- Popular categories of Amazon and other marketplaces
- Trends in e-commerce
- Competition with Amazon and third-party sellers
- Profit margin of various top-selling products
- Business model and fulfillment method
- Sourcing of products
There is no magic list of top-selling products that will boost your business once and forever. You might find lots of recommendations on the exact items to sell on Amazon, which work more as advertising for the buyers rather than a business plan.
One thing is certain – customers value quality and seamless service. Another thing is that without proper management and accounting software no e-commerce business will ever thrive. At risk of sounding too smug, Synder proves to be the best Amazon, eBay or Shopify accounting software. You can always see for yourself by trying our demo.