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5 Steps to Finding a Profitable Niche on Amazon

Amazon sellers often perform a balancing act, juggling their entrepreneurial ventures with marketing, selling, researching, product analysis, and other prime areas that ultimately drive results for your bottom line. While the Amazon Marketplace is undoubtedly simpler than running a brick-and-mortar shop, the platform’s sheer popularity and competitive nature requires Amazon sellers to tackle the job with a bit more elbow grease.


Amazon is a larger-than-life eCommerce website with a worldwide market, so it’s no surprise to see sellers looking for unique ways to stand out. With Amazon being like a virtual maze, it’s important to have a solid competitive edge to prevent you from chasing “shiny objects”. But with so many sellers around you, it can be tricky to narrow down your market niche.


So, for Amazon sellers who want to boost their sales strategy amidst like-minded contestants, focusing on a profitable niche makes sense.


What Does it Mean to Have a Profitable Niche on Amazon?


Think of an Amazon niche as a sub-market that engages a specific demographic with common interests, problems, or location. Instead of fighting for a piece of the “profitable pie” selling branded items, you can tap into an under-leveraged market by offering niche products.


This reduces your competition and catapults the demand for your products But what exactly constitutes a niche product on Amazon & how do you identify one?


Our Guide to Finding Your Best Niche Product for Your Amazon Business


1. Find Your Niche by Conducting Extensive Keyword Research

As an aspiring Amazon seller, it can be difficult to pin down new pain points that should be addressed for your consumers. If you need an effective way to push your thinking outside the box, then conducting keyword research reveals product ideas you wouldn’t have thought of in the first place!


Keyword research provides valuable information for potential market niches, especially since it reveals the competitiveness for each keyword. But don’t jump the gun and pick the most obscure keyword you find!


Your niche still needs a stable demand to earn a profit. Therefore, you can check whether your keywords highlight sponsored items since they have a good daily sales rate and the potential to earn money despite the limited audience.


Key Points To Remember:

●     Conduct regular keyword research

●     Don’t only stick to popular keywords. Instead, use keywords that are relevant and specific to your business.

●     Check if your selected keywords trigger sponsored products to come on top of the page.


2. Focus on Niche Products that Sell No Matter the Season 

Seasonal products like holiday items often have fluctuating sales, which peak during its high season and die down in its off months. If you’re looking to create a stable business out of your Amazon store, it’s better to offer items that don’t suffer from seasonality so you can maintain your cash flow no matter the time of year.


Naturally, many products experience an increase in sales during the holidays since all the festivities put people in a generous mood to purchase. But the best products can capture the shopper’s attention and fill up virtual carts mid-year. You can easily determine these products by using Amazon Keyword Planner or Google Keyword Planner.


Using these free tools, you can identify the search volume of your niche and rate its potential seasonality.


Key Points To Remember:

●     Sell items that aren’t seasonal and have a year-round requirement.

●     Upgrade your products and offerings to cater to holidays and make the best of it.

●     Use keyword planners to check for average searches in a year and verify product requirements.


3. Balance Niche and the Product’s Profit Margin

There are many considerations to make before finalizing your product selection. It may seem tricky to determine whether a product will fly or flop in the market, but using an FBA calculator can help find out an individual product’s potential profitability.


An FBA calculator allows you to calculate the shipping, advertising, and other Amazon charges throughout the selling process.Accounting for these costs is crucial when finalizing your product-market niche as miscalculating your costs can lead to debt & store closure.


You can also accurately predict profitability results by contacting your prospective suppliers to factor in their quotations, allowing you to come up with a manageable price point. Generally, a 15% (or higher) profit margin is an excellent indicator of a lucrative eCommerce business. This is the metric you should shoot for when exploring products for your store line-up.


Key Points To Remember:

●     Use the FBA calculator to check the charges for the entire selling process on Amazon.

●     Manage price points and set margins in advance to avoid losses or lower profit margins.


4. Consider the Ease of Shipping and Logistics of the Product

Selling products is only half the battle, and a large part of your business involves managing its logistics too. It’s better to save yourself from future headaches by straying away from bulky, heavy items that can be a nightmare to prepare for shipping & delivery.


Amazon sellers with an international reach or audience need a dedicated delivery network to consider when shipping items since accidents can happen mid-transit. This could result in angry customers and lower review ratings of your store, directly impacting sales.


Keep in mind that the bulkier the item, the higher the shipping cost, so it’s best to stick to lightweight products that are easy and cheap to deliver. If you’re wondering how to check whether certain items fit your bill, you can use Amazon’s FBA Weight Calculator to account for the possible charges that can impact your margins.


Key Points To Remember:

●     It is wiser to sell lighter, easy-to-ship items to avoid expensive delivery and shipping costs.

●     Use the FBA weight calculator to check possible costs in advance if you have a heavy-weight item that needs to be shipped.


5. Be Active in Niche Communities to Widen Your Knowledge About Nifty Product Ideas

In addition to collecting unique product ideas using keyword research tools, you can dive deeper into the market and look for relevant topics, pain points, and new interests by connecting with niche communities. You can start simple with Reddit, which is one of the most well-known websites where you can hit the jackpot in its diverse forms.


Getting to know potential markets and sparking conversations expand your knowledge on what people could need and want. This allows you to explore interesting products that are sure to gain traction.


Key Points To Remember:

●     Sell unique and relevant products.

●     Use Reddit and Pinterest to lookup new trends and cater to the needs accordingly.

●     Don’t hesitate to update the listed items after thorough research on the keyword planner.

Amazon PPC Made Easy: How Automation Campaign Builder Tools Simplifies Your Management and Sales Funnel  

One of the challenges that all Amazon sellers face is capturing the attention of customers in a competitive, saturated marketplace. Sellers who want to stay on top need good-selling products with low competition and high margins.


When it comes to finding a niche, the toughest part is finding a profitable market while navigating your way through the sea of sellers at every turn. Manually researching data can be time-consuming and less effective at helping you choose profitable products. To help make this process easier, you can leverage automation tools to get started on your journey!


Are You Looking for Ways to Boost Your Amazon Sales?

Managing an Amazon business involves wearing many hats, but balancing all responsibilities will leave your store behind in a fast-paced market. Visibility is a driving factor that generates results for your marketing efforts.


As your business grows, you may find it challenging to manage your Amazon account on your own. Simpliworks can provide expert Amazon account management, freeing up your time and allowing you to focus on other aspects of your business. Let us handle the details so you can achieve your goals.


Do you want to save time eliminating keyword research, build winning campaigns, and sell your products faster? Simpliworks makes PPC simple and scalable with machine learning and keyword automation, so get in touch with us today to find out how we can grow your sales in a matter of weeks.