It doesn’t matter if you are a new Amazon seller just starting your research, or an Amazon veteran, it can be hard to decide which product category to concentrate on.

There are many product categories to choose from. How can you narrow your search and focus on the most relevant niche? What product categories are most competitive? What are the highest profit margins? You have the most potential to expand your product range. All of this and more will be covered by us.

What categories can you sell on Amazon.

• Appliances
• Apps & Games
• Arts, Crafts, & Sewing
• Auto Parts & Accessories
• Baby
• Beauty & Personal Care
• Books
• CDs and Vinyl
• Cell Phones & Accessories
• Clothing, Shoes, and Jewelry
• Collectibles & Fine Art
• Computers
• Electronics
• Garden & Outdoor
• Grocery and Gourmet Food
• Handmade
• Health, Household & Baby Care
• Home & Kitchen
• Industrial & Scientific
• Kindle
• Luggage & Travel Gear
• Movies and TV
• Musical Instruments
• Office Products
• Pet Supplies
• Sports & Outdoors
• Tools & Home Improvement
• Toys and Games
• Video Games

The most popular categories on Amazon

It’s crucial to understand where and what customers are buying when selling on Amazon or any other platform. It would be a mistake to open a shop at a flea marketplace only to find out that you are in the wrong place.

Amazon and ecommerce are the same. You’ll have trouble selling a product in a niche market or in a category where very few people shop. We’ll be looking at the top categories that third-party sellers can sell in.

Top 10 Categories

Home & Kitchen	32%
Beauty & Personal Care	23%
Toys and Games	20%
Clothing, Shoes & Jewelry	18%
Health, Household & Baby Care	17%
Sports & Outdoors	16%
Arts, Crafts & Sewing	15%
Books	15%
Kitchen & Dining	14%
Baby	14%

The remaining categories in order by popularity

Electronics	14%
Tools & Home Improvement	13%
Pet Supplies	13%
Office Products	12%
Garden & Outdoor	12%
Grocery & Gourmet Food	10%
Appliances	8%
Cell Phones & Accessories	8%
Auto Parts & Accessories	7%
Handmade	6%
Apps & Games	6%
Industrial & Scientific	5%
Computers	5%
Video Games	4%
Collectibles & Fine Art	4%
CDs and Vinyl	3%
Luggage & Travel Gear	3%
Instruments for Musical Performance	2%

It’s important that you ask yourself if these categories are too competitive when looking at them. You don’t want to jump in to a saturated market where there is little chance of landing on page 1 of Amazon’s search results.

These broad categories are likely to be oversaturated and very popular. I will explain later how you can explore subcategories to discover better product options.

What are the main differences between Amazon product categories?

1. Profitability: Which Amazon product category is the most profitable to market?

The price of products and the profit margin you are able to sell them for can have a huge impact on your profits.

Amazon sellers have an average profit margin of between 15-26%, depending on the category. The higher profit margins are: These products can still be expensive in raw materials and time, but they are handcrafted. Then there are some more expensive items like computers, appliances and instruments.

Rank	Product category	Average Profit Margin
1	Handmade	32%
2	Vinyl & CD	27%
3	Apps & Games	25%
4	Industrial & Scientific	25%
5	Luggage & Travel Gear	25%
6	Grocery & Gourmet Food	23%
7	Video Games	23%
8	Arts, Crafts & Sewing	22%
9	Pet Supplies	22%
10	Musical Instruments	21%
11	Beauty & Personal Care	21%
12	Baby	21%
13	Sports & Outdoors	21%
14	Auto Parts & Accessories	21%
15	Garden & Outdoor	20%
16	Appliances	20%
17	Toys and Games	20%
18	Tools & Home Improvement	20%
19	Clothing, Shoes & Jewelry	20%
20	Books	20%
21	Kitchen & Dining	19%
22	Office Products	19%
23	Electronics	19%
24	Collectibles & Fine Art	19%
25	Health, Household & Baby Care	19%
26	Home & Kitchen	19%
27	Cell Phones & Accessories	18%
28	Computers	16%

Profitability is an important consideration when selling on Amazon. However, it’s worth keeping your eyes open for the best opportunities.

• While some categories are more profitable than others all categories have profitable sub-categories.
• Home & Kitchen and Beauty & Personal Care rank among the most popular categories. However, both have many subcategories that are less profitable due to increased competition, price wars, increased PPC costs, etc.
• less profitable categories than those that are most popular can still be profitable. For example, Home & Kitchen vs. Handmade. Only 4% of Home & Kitchen sellers make 51%-100% in net profit, while 9% of Handmade sellers make 51%-100% in net profit.

You still need to find the right opportunity with high demand and low competition.

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

Amazon sellers in nearly all categories have an average monthly sale of between $1,000 and 25,000.

Certain categories have noticeably lower monthly sales (under 1,000): Books, Handmade and Cell Phone & Accessories.

Others see higher monthly sales (50,000+) in the following categories: Computers, Industrial & Scientific, Computers.

3. Selling experience

What product categories are best served by high levels of experience?

• Music Instruments (50%) of sellers claim they have extensive seller experience
• Industrial & Scientific
• Tools & Home Improvement
• Apps & Games
• Auto Parts & Accessories

What product categories need the least experience

• Appliances (27% say they have novice seller experience).
• Books
• Video Games
• Electronics
• Toys and Games

4. Fulfillment method:

• Fulfillment By Amazon (FBA), is very popular for almost all product categories, but Fulfillment By Merchant is more popular among Cell Phone & Accessories and Computers, Apps & Games. CDs & Vinyl are also popular.

5. Sales/Business model:

• Private label is a way to create your own product/label and sell it on Amazon. It’s popular in almost every product category except Home & Kitchen and Handmade.
• Retail arbitrage This is a way to find low-cost goods or discounted products in brick-and mortar retail stores that you can resell online.
  • Most popular: Apps and Games
  • Least popular: Home & Kitchen, Industrial & Scientific
• Online arbitrage This is a way to find a low-cost product or discounted product on one site or online marketplace that you can resell on another.
  • Most popular: Apps and Games, Video Games
  • The least popular are Home & Kitchen, Sports & Outdoors.
• Wholesaling This is when you buy low-cost goods or discounted goods in bulk and then sell them individually in a retail market.
  • Most popular: Music Instruments, Grocery & Gourmet Food
  • The least popular: Books, CDs, & Vinyl
• Dropshipping This business model allows Amazon sellers to transfer customers’ orders directly from their customer to the manufacturer or supplier.
  • Most popular: Computes, Collectibles & Fine Art, Electronics
  • Luggage & Travel Gear, Grocery & Gourmet Food are the least popular.
• Handmade Sellers are people who make their own products for the Amazon marketplace.
  • Most popular: Handmade/Handcrafted Products, Collectibles & Fine Art
  • The least popular products in Pet Supplies, Beauty & Personal Care

Why are so many people selling in Home & Kitchen?

It is not surprising that the Home & Kitchen category is so popular with sellers. Everyone uses some kind of kitchen or home product in their daily lives.

Do you want to sell in a highly-sought product category?

There are several things you should consider when conducting product research in a particular category.

1. Amazon Competes

50% of Amazon sellers (50%) claim that Amazon sells their products directly to them.

Amazon, for example, will show its private label products first than yours (even though they aren’t ranked as high).

2. Competing against other sellers

Usually, sellers will identify a niche that is popular in a category like Home & Kitchen and believe they can get a piece.

They may be making things harder for themselves in reality. It is possible to see a niche such as “apple slicers” in your mind and say, “Wow, top sellers make over $100,000 in sales.” This is something I should also sell.

However, if you dig deeper you will see that this niche is extremely saturated; sellers have hundreds upon hundreds of reviews and low prices, and that there is not much that differentiates each product.

An unknown seller may not consider this and try to sell a product that isn’t competitive in an established market.

3. Advertising costs are higher

Higher advertising costs will be charged for saturated categories. This is due to increased competition for the same keywords and customers.

This could mean that you might pay a higher per click (or cost per CPC) which could lead to your business losing money or breaking even if you don’t closely monitor your advertising spend.

This means that you’ll be spending a lot per click to launch your product and try to compete with the best sellers.

If you don’t differentiate your product form the rest, it is hard to be noticed in this highly competitive market. There is a limit to how much differentiation you can make in diapers. However, there are many other product areas that offer more flexibility. We will soon get there!

How to find a lower-competitive category to sell in

1. Google Trends

Google Trends is a great way to monitor what consumers are most interested in. Google Trends is a great place to keep an eye on what consumers are interested in every week. You might be able to identify potential products. Is it trending in gym equipment? This could be a great opportunity for you to sell.

Google Trends will display the popularity and trending of a keyword. You can also see related topics, demographics and related queries that you can use to do keyword research. Explore this tool for free and you’ll be amazed at what you find!

2. Search with Keyword tools and Opportunity Finder

These tools make it easier to do keyword and product research.

Keyword tools will help you find valuable keywords that are highly relevant to your product listings or Amazon PPC ads. It also calculates how much you should spend per keyword to reach page 1.

Opportunity Finder lets you enter specific criteria and find countless opportunities that are high in demand and low-competition. You can convert a keyword to a market segment and view detailed data on sales performance, emerging trends and competitive insights.

How it works

• Do not ignore the popularity of a category: Your chances of profitability will depend on your niche, the price of your goods, and the cost of the product. Selling opportunities are greater in less-active categories.

• Search for a niche with low competition. The idea is to start by choosing a broad topic, then dig deeper into the subject. Although the topic you chose may be very competitive, it is more likely that you will find an untapped market if you go deeper into the rabbit hole. 
• Do product research in these categories. If you don’t know what product you want, or if the product category isn’t important to you, you might consider looking into the less obvious options.

3. Monitor consumer trends

It is a great time to make investments in products that can be used to improve their homes and increase their well-being.

Although shopping habits change constantly, you can predict fluctuations in demand. However, it is a good idea for retailers to be aware of changes in consumer demand and how they respond to them.

There is some good news. Good news: Shopping online and on Amazon is becoming more mainstream in U.S. consumer behaviour. 65% of Americans will continue to shop on Amazon through 2022 and beyond.

Is it important which Amazon category you are selling in?

The data shows that there are many profitable sellers in every Amazon category. This means it will be difficult to find a market or category with little competition. It will be worthwhile!

Keep these things in mind:

• The results of your product research, sub-category competition, and the market demand will all influence the choice of a category in which to sell the product.
• Do not let sentimentality determine the category in which you sell. Let data (and the demand) decide your category. Also, you shouldn’t sell a product that has low competition or high demand simply because you use it every day.
• Follow through. After you have found the right product, your profitability will depend on how you manage your business. You need to know how to conduct product research, source quality products and negotiate prices. Also, you should be able present a higher perceived worth, run profitable PPC campaigns, optimize your listing, and much more.