Is selling on Amazon profitable?
It’s undeniable that Amazon takes the crown when it comes to online business with over 12 million products.
But, can you really make money selling on Amazon?
In short, the answer is yes (if you know what you are doing).
That’s where this article comes into play.
This article gives you a breakdown on how money is made on Amazon, some possible areas you can explore, plus the pros and cons of this business model.
So keep on reading and start learning about a fantastic online retail business opportunity.
Is Selling on Amazon Worth It?
When I first started selling on Amazon, I had my doubts. After doing it for years, I have realized I was looking at the small picture with no understanding of the big picture.
Amazon is HUGE. By the year 2020, Amazon had generated revenues totaling more than $75 billion.
The fascinating part of this is that more than half of these sales came from third-party sellers. So over $37.5 billion has come from Amazon sellers like you and me.
Amazon’s real value comes from their customer base and their ability to continue to build and retain new customers. When you sell on Amazon, you are tapping into the biggest online marketplace in the USA.
Is selling on Amazon worth it? Heck yes it is. You can’t beat the access to a group of customers who are ready and willing to buy your products.
Selling On Amazon Pros & Cons
Just like everything else, selling on Amazon comes with its own share of pros and cons.
- Easy To Start on Amazon Marketplace: it’s far easier to start selling on Amazon than putting up your own website and storage infrastructure.
- Ready Traffic: Amazon has already gained massive traffic, which you can easily get into. So you don’t have to struggle to get traffic.
- Reputation: Millions of people purchase on Amazon every day. By sitting on Amazon FBA, you can use their reputation for your own good.
- Quantity of Products: Amazon sells over 12 million products and it is open 24/7 and on holidays.
- Customer Centric: You don’t deal directly with customer service issues if you use their Amazon FBA or Fulfillment by Amazon services with reasonable fees.
- Lack of Control: When you sign up for an Amazon account, you agree to do things their way, giving up your independence as third-party sellers.
- High Competition: There are many sellers on Amazon, and unless you are dealing with very rare or unique items, you’ll always face some sort of competition and may not get the buy box.
- Learning Curve: Learning to sell on Amazon takes time and you will make mistakes along the way.
Ways To Become a Profitable Amazon Seller
Even though Amazon makes selling simple, you still need to put in the effort to make your products sell. These are some things to keep in mind to become a profitable seller on Amazon:
Be An Equal Opportunity Seller
Most people would tell you to find your niche of a product and learn everything there is to know about it. I like this advice, but I want to encourage you to be an equal opportunity seller.
Profit can be found in many different profits, so you need to train yourself to see profit everywhere. Once you do, you will be amazed at the number of opportunities out there to become profitable on Amazon.
Get to Know Your Competition
If you want to know what’s working on Amazon, just take a few moments to look at the other sellers on the marketplace. Examine how they price their products, the marketing strategies they utilize, how they describe and present their products, the volume of products, and their frequency in introducing new offers.
There is no need to reinvent the wheel, so learn from these other sellers and continue to grow your knowledge and profit opportunities.
Anyone can sell on Amazon, but you need to be on top of your business if you actually want to make a profit.
One way to do this is to maximize your profits. You can do this by finding ways to source lower cost inventory, streamlining your prep and shipping, or riding the busy seasons for ecommerce (or even better – you can do all three).
And my best piece of advice – Never stop learning or growing your business. If you stop, you will be passed up by other sellers willing to put in the effort.
Top 15 Amazon Profitable Categories To Sell
One of the most common questions I get is: “What categories are the best to sell on Amazon?”
I always say it depends, but in this article, I wanted to take some time to discuss a few of my favorites.
1. Toys and Games
This is hands down my favorite category. I love selling toys and games and have been doing it since I started selling.
I recommend always scanning toys and seeing if there is an opportunity for profit. I tend to scan brand name toys and toys associated with new TV shows or movies. You might not always find a flip opportunity, but when you do, enjoy!
2. Electronic Gadgets and Accessories
Electronic gadgets are everywhere and I don’t see them going away any time soon. As I sit here and write this article, I am using my computer, phone, smart TV, smart watch, and listening to music on my Alexa device.
Most consumers do not want to be left out of the latest trends. As such, electronics will always remain high in demand and top on the list of Amazon’s most profitable niche due to their rapid evolution.
3. Baby Care Products
As the world population continues to rise, so is the market for baby items. According to a report by Statista, the global market for online sales of baby products is growing at a rate of 5% and is expected to hit $109.31 billion in 2026, up from 81.43 billion in 2020.
Quite impressive, don’t you think?
Since these products are inexpensive, lightweight, tiny, sturdy, and continually in demand, they are an excellent option for wholesale products.
The top sellers in this category include childproof cabinet locks, diapers, car seats, strollers, breast pumps, baby thermometers, bibs, pacifiers, teethers, and other baby care and entertainment equipment.
As a parent, I 100% agree and use almost everything on this list.
4. Video Games
Over time, the popularity of video games has not only increased but also changed dramatically. According to Statista.com, it will grow into a multibillion-dollar industry in 2021.
Amazon launched a game studio project as a way for game developers to gain access to built-in twitch connectivity for their games.
Amazon’s emphasis on video games gives entrepreneurs a chance to cash in on this booming business.
Hardware (including screens, CPUs, and peripherals) and software (games) are the two main sources of revenue in the gaming industry. To sell easily, you need to know more about your audience and their preferred video games.
When it comes to jewelry, all that matters may truly be gold. Things like ornaments, gemstones, and precious metals are ever in high demand. However, the jewelry market is rather crowded.
This product category indeed has high-profit margins, which can go up to 50% or more. It’s also ideal for wholesale products. However, this is only possible if you can take advantage of distinctive long-tail keywords or offering products that standout amongst the competition.
6. Kitchen and Dining
This lucrative niche only needs some bit of imagination and optimization to earn a massive payoff. Given their high potential for impulse purchases, kitchen equipment that aid in the optimization of culinary activities is among the simplest physical products to sell online.
Food safety has become a major concern for society. As such, an increasing number of young people opt to spend cash on their kitchens as they become more aware of the importance of eating healthy.
These are among Amazon’s best-selling items, and their popularity isn’t likely to wane anytime soon. Books, whether in hard copy, paperback, or kindle editions, are more popular than ever.
What’s more, it’s a niche that sells anytime, irrespective of the season, plus it comes with a significant profit margin.
There are various sub-categories in the books category giving you numerous options for sale. I recommend reading this article and also considering going down the rabbit hole in the world of textbooks (more info here).
8. Beauty and Personal Care
This evergreen niche never goes out of style with branded makeup, natural beauty products, and beauty tools and accessories.
Men and women alike constantly seek for natural products to incorporate into their daily skincare routines. This makes the category among the most powerful forces in the retail market.
Even though this domain has a lot of interest, people want to get them from reputable sources. What could be better than Amazon when it comes to shopping online?
With an annual growth rate of 5.9%, online sales for beauty and personal care products are expected to hit $716.6 billion by 2025.
9. Shoes and Clothing
Clothing and shoes are another extremely profitable and fast-selling sector. Millennials are the driving force behind the success of this product category. This is because they desire a simple and convenient way to shop for fashionable, affordable clothing.
To appeal to millennials and succeed in this category, simply employ your creativity to make your products fascinating, trendy, and appealing, and make your return policy flawless. With Amazon, they can get their items as quickly as possible.
10. Pet supplies
Are you a pet owner?
If so, then you understand that pet parents desire the best for their pets. This has resulted in the pet supplies niche witnessing massive growth in recent days. Customers’ purchasing demands for these products are rather strong as everyone seeks the absolute finest for their animal friends.
The market value of pet supplies is expected to be $202.6 billion by 2025. You don’t want to miss out on this, do you?
What’s even better is that the niche is the product diversity it comes with. You will have a variety of profitable sub-niches to choose from, including pet training and grooming.
11. Arts, Crafts, and Sewing
If you know someone who has a hobby in the craft world, you know that there is always a need for more glitter and more crafting supplies (my wife is one of these people and my spare bedroom is stacked with craft supplies).
If you are able to find products to sell in this category, you might have found a gold mine as there is always a demand and crafters are willing to pay a little extra for just the right item to finish a project.
12. Office Supplies
Office supplies, including printing papers, cartridges, printers, pens, notepads, label markers, small garbage cans, etc., are necessary for every firm. Whether large or small, every sector or organization requires these products.
The market for office supplies was expected to reach $247 billion by the end of 2020, while B2B office supplies are expected to rise by 29.14 billion in the coming four years.
The need for office supplies has risen dramatically as a result of digital automation and IT integration. Besides the global implementation of the work-from-home policy, office supplies have evolved from a narrow specialty to a broad niche.
13. Garden and Outdoor
This is a seasonal niche that’s only available during certain times of the year, with the highest demand running from March to May. However, this category has seen an extraordinary rise in patterns as a result of the global pandemic.
This segment’s market value is predicted to expand to $575.57 million by 2026, up from $338.36 million in 2020, depicting increased demand.
Despite it being a seasonal niche, it’s still among the most profitable to sell on Amazon. Even better, it comes with an extensive product line that allows Amazon vendors to maximize their income. You can’t go wrong with this category.
14. Home Improvement and Tools
Since the global lockdown came into effect, the home improvement sector has witnessed striking changes and I don’t expect these changes to disappear anytime soon.
Because most employees around the world are now working from home, the current situation has considerably driven the need for this category of products. Home improvement is a multibillion-dollar market that is predicted to exceed a trillion dollars by 2025.
Modern-day individuals are faced with various forms of stress, including work, school, or family-related, among others. This is impacting negatively on their health.
As a result, many people have become health-conscious, and an increasing number have begun routines aimed at health improvement. After all, health is wealth.
Consumers are becoming more interested in health items such as vitamins, proteins, other dietary supplements, and medical supplies and equipment.
Although this is a booming niche, Amazon has imposed strict regulations because it greatly impacts peoples’ wellness. Ensure your product meets the approved requirements before you start selling them on Amazon.
How To Become Profitable With Tactical Arbitrage
If you want to be profitable on Amazon, you are going to need to have a set of tools to make your life a bit easier.
One of my favorite tools to use is Tactical Arbitrage. Tactical Arbitrage will help you find profitable items to resell on Amazon.
You can utilize Tactical Arbitrage to increase your profitability in the following ways:
Find the Best Deals
The backbone of online selling is identifying products being sold at lower prices from stores and reselling them at higher prices.
One of the best ways to do this is through online arbitrage. The basic premise is finding products online to source and flip for a profit.
This usually takes a long time, but Tactical Arbitrage speeds everything up.
Tactical Arbitrage helps you identify the best deals quickly and easily by presenting thousands of stores to search from and it does it while you sleep.
Find Replenishable Items
Replenishable are things that you purchase repeatedly and earn money from. These products are essential for running a thriving business. They are hidden honey pots that provide you with consistent revenues over time.
Tactical Arbitrage helps you find these replenishable opportunities by providing you a profit and competitor analysis along with a sales and price history.
Tactical Arbitrage can also help you find retailers who can supply you with these products constantly at good prices, boosting your chances for profits.
Increase the Variety of Products That You Sell
The more diverse your product range, the higher the chances for profit.
And that’s where Tactical Arbitrage comes in.
When you want to expand your product lineup, you need to be able to search through multiple stores to see what new flips might be ready for the harvesting.
Tactical Arbitrage can be running in the background while you are purchasing your other products on a weekly basis. The more searches you have running, the more opportunities can be found.
Venture Into Restricted Categories
If you ever get that approval for a restricted category, you will need to start analyzing all of the products in that category to start making money.
Once you get that approval, you need to run a few searches on new online sites where you can start mining for profit. Go to your favorite store and select a new category group to start searching through all the new opportunities.
Copy Successful Sellers
This always makes me sound like a bad person, but this is one of the best pieces of advice I can give.
Don’t reinvent the wheel.
If you find a seller who is on one of your products, you might want to start looking at products they might be selling on their accounts. Once you do this, you can use Tactical Arbitrage to run a reverse search on that product. This will give you the ability to find the lowest priced place to source from and start selling it for a profit.
If you want to get a free trial of Tactical Arbitrage, you can do that here.
Is selling on Amazon still profitable?
Heck yes, but you have to know where to look and have the tools to find the deals.
I hope this article has pointed you in the right direction to help you with your journey to build your Amazon business.
If you would like to learn more about selling on Amazon and finding good products to flip, I recommend the following articles for your next lesson in Amazon selling.
And make sure to get your free trial of Tactical Arbitrage here