With so many categories to choose from, how do you narrow down your research and find the best niche to focus on? Which product categories have the most or least competition? Highest profit margin? Biggest opportunity to expand product offerings? We'll cover all of this and more.

What categories can you sell on Amazon?

home appliances

Apps and Games

Arts, Crafts and Sewing

automobile parts

baby

Beauty & Personal Care

books

CDs and vinyl records

Cell Phones and Accessories

Apparel, Shoes and Jewelry

Collectibles and Fine Art

computer

electronic product

Garden and Outdoors

Groceries and Food

hand-made

Health, Home and Baby Care

Home & Kitchen

Industry and Science

ignite

Luggage and Travel Gear

Film and TV

musical instrument

Office Supplies

pet supplies

Sports and Outdoors

Tools and Home Improvement

toys and games

video games

*This excludes certain categories that most third-party sellers cannot/do not sell, including Amazon Devices, Gift Cards, Software, Vehicles, and Whole Foods Market.

Amazon's most popular categories

When selling on Amazon or any other platform, it is important to understand where and what consumers are buying. You don't want to set up shop at a flea market and realize you're in the wrong parking lot, right?

The same goes for Amazon and e-commerce. If you create a product in a niche or category that few people buy, you're going to have some trouble. In this article, we'll look at the most popular categories for selling as a third-party seller.

According to Jungle Scout's 2022 State of Amazon Seller Report , these are the top categories**, including the percentage of sellers who have products listed.

Top 10 categories

The rest of the categories are sorted by popularity

**Sellers can select multiple categories.

Looking at these categories, it's important to ask yourself: Are these categories too competitive? The last thing you want to do is jump into an oversaturated market with little chance of landing on the first page of Amazon's search results.

But while these broad categories can be very popular and oversaturated, I'll explain how to dig deeper into the various subcategories to find better product opportunities later.

What are the main differences between Amazon product categories?

1. Profitability: Which Amazon product categories are the most profitable?

Profit margins can vary widely, depending on how much you cost to source your products and how much you can sell them for (less operating costs – see more about fees here ).

Fortunately, for most Amazon sellers, the average profit margin is between 15-26%, depending on the category. Which profit margin is higher? Artisanal items (which can still cost a lot in raw materials and time), followed by some high-priced items, including computers, appliances, and instruments.

Profitability is an important consideration when selling on Amazon, but keep an open mind and look for the real best opportunities.

Some categories may be more profitable than others, but within each category there are profitable subcategories.

Home & Kitchen and Beauty & Personal Care are the top categories among sellers, but both have a large number of unprofitable subcategories due to increased competition, price wars, direct competition from Amazon, increased PPC costs, etc. category.

Less popular categories can be more profitable than popular ones. For example, Home & Kitchen & Crafting. Only 4% of sellers have 51%-100% net profit at Home & Kitchen, while 9% of sellers have 51%-100% net profit at Handmade.

The point is, you still need to find the right opportunity with high demand and low competition – so don't get too caught up in categories.

2. Sales: What is the average monthly sales of Amazon product categories?

The average monthly sales of Amazon sellers in almost all categories is between $1,000-$25,000.

Certain categories had significantly lower monthly sales (under $1,000): Books, Crafts, and Cell Phones and Accessories.

Others saw higher monthly sales ($50,000+): musical instruments, industrial and scientific, and computers.

3. Sales experience:

Which product categories require a high level of experience ?

Musical Instruments (50% of sellers say they have advanced seller experience)

Industry and Science

Tools and Home Improvement

Apps and Games

automobile parts

Which product categories require the least experience ?

Appliances (27% of sellers say they have novice seller experience)

books

video games

electronic product

toys and games

4. Implementation method:

Fulfillment by Amazon (FBA) is available for nearly all product categories, but Fulfillment by Merchant (FBM) is more popular in mobile phones and accessories, computers, apps and games, CDs and vinyl records, and handmade goods

5. Sales/Business Model:

Private label (creating your own products/labels to sell on Amazon) is popular in almost all product categories, but is most popular in home and kitchen and crafting, and the least popular in books and video games welcome.

Retail arbitrage is a method of finding low-cost or discounted items in brick-and-mortar retail stores to resell online.Most Popular: Apps and Games

Least Popular: Home & Kitchen, Industry & Science

Online arbitrage is a method of finding low-cost or discounted products on one website or online marketplace to resell on another.Most Popular: Apps & Games, Video Games

Least Popular: Home & Kitchen, Sports & Outdoors

Wholesale is the practice of buying low-cost or discounted goods in bulk for sale as a single unit in the retail market.Most Popular: Musical Instruments, Groceries, and Food

Least popular: Books, CDs and vinyl records

Dropshipping is a business model where Amazon sellers do not keep their own product inventory, but instead transfer customers' orders directly to the manufacturer or supplier.Most Popular: Computers, Collectibles and Fine Arts, Electronics

Least popular: luggage and travel gear, groceries and food

Artisanal sellers are people who create their own products to sell on the Amazon marketplace.Most Popular: Crafts/Crafts, Collectibles, and Fine Art

Least popular: Pet supplies, grooming and personal care

Should you sell in a popular product category?

There are a few things to consider when doing product research in popular categories.

1. Compete with Amazon

Half of Amazon sellers (50%) say Amazon sells its own products in direct competition with theirs.

For example, Amazon will launch its own private label products before yours (even if they are not ranked).

His Amazon brand is featured before all sponsored products and organic results.

" AmazonBasics " products are usually priced lower than yours.

Fortunately, not every customer wants the most basic and cheapest option, and many shop based on brands, product reviews, features, or other differentiating factors. (See more consumer preference data here .)

2. Compete with other sellers

Often in a popular category like home and kitchen, many sellers find a niche with a lot of sales and think they can get a piece of the pie.

In fact, they may just be making it more difficult for themselves. You might see a niche like "Apple Slicer" and think, "Wow, the best-selling product is over $100,000 in sales. I should sell this too."

But when you dig deeper, you see that this particular niche is pretty saturated. Many sellers have hundreds of reviews, low prices, and nothing that really differentiates each product on offer.

New sellers may not consider this and end up trying to sell products that cannot compete in established markets.

3. Higher advertising costs

More saturated categories will have higher ad costs , which of course comes from increased competition for the same customers and keywords.

That means you're likely to pay a higher cost- per-click (or CPC), which could mean your business could break even or even lose money if you don't monitor ad spend closely.

According to Keyword Scout , the estimated exact match brand bid for the keyword "diapers" is $35.96, the exact match sponsored product bid is $1.40, and the broad match per click is $1.28.

This means that when you first launch your product to try and compete with the best sellers, you are paying a lot of money per click.

If you don't differentiate your product from your competitors, it will be difficult to stand out in this highly competitive product. When it comes to diapers, there's only so much differentiation you can do, but more flexibility in other product areas. We will do it soon!

How to Find Less Competitive Categories to Sell

Use Google Trends

A great free way to follow content that consumers are interested in is Google Trends. Check Google Trends every week or so to see if you can find an opportunity to create a product. For example, is fitness equipment popular? You may want to explore this as a sales opportunity.

Just enter a broad keyword into Google Trends and it will show you how popular the topic is and whether it's trending up or down. You can also view related topics, demographics, and related queries that can be used for keyword research. Take some time to explore this free tool and see what you come up with!

Does the Amazon category you sell in matter?

As you can see from the data, Amazon has profitable sellers in every category, which means finding a category or marketplace with limited competition isn’t easy. But it will be worth it!

Remember the following points:

Choosing which category to sell in will depend on your product research, the competitiveness of the subcategory, and the demand for your product.

Don't let sentimentality dictate the categories you sell. Let data (and needs) dictate your categories. In other words, don't sell a product with low demand just because you've been using it.

follow up. Your profitability depends on how you run your business once you find the right product. Make sure you know how to: conduct proper product research, source quality products, negotiate pricing, demonstrate higher perceived value, run profitable PPC campaigns, create optimized listings, and more.