Since beginning to sell on Amazon is so simple, the number of merchants using the site continues to rise, and there are now over 9 million of them. While it’s simple to open an online shop, making money from it is another matter together. To get the most out of your investment, you need to learn how to identify a lucrative market niche.
Simply put, a niche is a specific subset of a more generalized and widespread field. For instance, “ergonomic home office supplies” is a subset of the larger “home office” category. To succeed as a Fulfillment by Amazon (FBA) vendor, focus on building a loyal following of high-value buyers. When the market is saturated, competition is reduced when broad categories are broken down. While there may be more demand in a more general category due to the presence of a bigger audience, competition remains fierce.
How many people would rather shop at Target, Walmart, or another well-known brand, rather than a store they have never heard of? Finding product segments with strong demand and minimal competition on Amazon is essential when deciding what to sell on your e-commerce site. Here are three methods for brainstorming Amazon niches that can be exploited for profit.
Begin with Everyday Products
Is it difficult to decide on a specific niche? If you’re looking for products to sell on Amazon, you shouldn’t focus on “fad” trendy products or seasonal items. As an alternative, you can limit your selections and identify your specialty by focusing on things that fall into broad categories that customers use frequently.
A smart place to start is with any product category that has to do with the house. Small appliances, home gym gear, and office supplies all fall within this category. Find a stable, money-making product that is in high demand and will remain something most people need. Then, check out the Amazon Best Sellers list using an Amazon SEO tool or a niche keyword engine to see what people are interested in buying right now.
A fitness-focused niche could, for instance, stock yoga equipment like mats, balls, straps, and so on to cater to a small but dedicated customer base. It’s a niche with a sizable audience, but one that’s more narrowly focused than advertising to the general public in need of exercise gear.
Examine the Competition
Check out the level of competition in the niche you’re thinking about by conducting a fast search on Amazon’s marketplace. If you’re a new Amazon business entering a competitive niche, you may find it challenging to get your products to appear in customers’ top search results. They’ll be up against more established brands and retailers.
However, once you do locate a less-crowded market, it’s time to check over the seller pages of your rivals to learn how to set yourself apart. You may provide more value to customers by filling in the gaps left by competitors that don’t offer things like videos or comprehensive product descriptions. Offer them an incentive to buy from you. This could be accomplished in several ways, including having the lowest price, delivering individualized service, or amassing a sizable online following. Find out what sets your shop apart from the competition.
Estimate the Profit Ratio
Considering the profit margin is essential while learning how to find a niche. Focus on maintaining a steady sales rate and a profit margin of at least 10%. If you’re going to sell online, your best bet is to pick a niche with products that are both popular and inexpensive to ship. Anything priced between $30 to $100 tends to sell well, though it’s important to keep an eye on the market to make sure you’re not over or undercharging.
Limit your offerings to a select group, but don’t make them so niche that sales volume suffers. Storage costs accumulate the longer goods are kept in warehouses, eating away at any potential earnings. The shipping costs will increase in proportion to the size of your new merchandise. Weigh the total operating expenses against the anticipated revenue to determine whether or not Amazon’s FBA is worth it. Even though these items may be popular, the money spent on packaging and transporting them may not be worthwhile.
Creating a Successful Amazon FBA Business
The key to turning a profit as an Amazon seller is to plan, optimize your sales efforts, and minimize your overhead expenditures. Make use of the information and resources provided by the Amazon seller portal to settle on a product line to sell from home, determine to price, and verify competitiveness.
Finding your market requires you to walk a tightrope between what’s trending and where there isn’t too much competition. It’s best to start with broad categories of everyday things and then narrow them down to fit what market research suggests is a realistic alternative. Develop a solid web presence and keep search engines optimizing your product listing. Building a solid base allows you to expand and provide greater returns in the future.
