7 Ways to Find a Profitable Amazon Niche

Selling on Amazon can feel like an overwhelming task. It is the largest e-commerce platform currently available, and it can feel daunting to compete with sellers in mostly saturated markets. But there is no denying that Amazon has attracted a large audience, and finding ways to leverage that audience for your own business is still a good strategy.

The key difference between winning and losing with an Amazon seller strategy is finding a profitable niche. A niche is the small slice of the pie that you will focus on. No one can be everything to everyone. Instead of being a one-stop-shop, spend some time identifying one thing and be good at that one thing.

A niche is sometimes also referred to as a sub-market. If your products’ main category is electronics, you might niche down and specialize in refurbished cell phones. Similarly, if your main category is pet products, you might niche down and specialize in dog treats.

There is no shortage of big box stores that specialize in being the one-stop-shop. If you are not a multibillion-dollar enterprise, you won’t be able to compete with them. So, don’t even try. If you find the right niche, you can make a fortune selling one product on Amazon.

Start with Your Passion

Coming up with a profitable Amazon niche is one part creative brainstorming and one part dedicated research. If you begin your search where your passions lie, then there is a good chance that your niche knowledge will have a strong influence. 

Brainstorm five categories that you can sell that align with your interests. These will be broad topics like electronics, beauty products, wellness and personal care, fitness, or education. There is no need to worry about what products are popular in these categories yet. You will work on narrowing this down in the next steps. The only thing that is important right now is that these categories align with your interests and skills.

For each of the five categories that you have identified an interest in, list three subcategories. If you are interested in electronics, there are likely two or three specific types of electronics that are truly of interest to you. Video gaming, personal computers, and cellular phones are all subcategories of electronics. Similarly, makeup, skincare, and hair removal are all subcategories of beauty products.

For each subcategory, niche down one more time and choose one or two specific niches. For the subcategory of gaming, you can niche down to refurbished gaming consoles and gaming accessories. For the subcategory of hair removal, you can niche down to wax removal products and electrolysis products.

Take your list of possible niches and identify three to five keywords. Your target keywords will be the combination of words that users type in to search for your products. These are the words or phrases that you want to target to get your products to show up in the right results. You should identify one main keyword and three or four additional keywords for each Amazon niche idea.

Tip 1. Low Competition for Main Keyword

While you will always find some competition, you don’t want to be drowning in a sea of thousands of search results. The ideal placement is a target keyword with low competition in the 100s or less and not in the 1000s. Ideally, you will want to find a product that has a high sales volume and a low review count. 

The good thing about the digital world of e-commerce is that there is always plenty of data to analyze. Start by using the tools that Amazon provides, like the Niche Finder tool. Or, branch out to comprehensive third-party solutions like Jungle Scout.

Tip 2. Avoid Seasonal Sellers

Unless you plan to change your niche with the seasons or have a different plan for handling the seasonal peak and valleys, try to avoid seasonal items. Eco-friendly Christmas tree decorations might be a fantastic niche in the fourth quarter of the year, but it is not likely to see much traffic for the rest of the time.

Good product choices have a stable sales volume throughout the entire year. There may be some fluctuation tied to natural ebbs and flows in the retail industry, but the demand should not be tied to a specific holiday or season.

The Amazon Keyword Planner is a tool that can help you forecast demand for target keywords. Checking your top five keywords with this tool can help you identify items with a seasonal nature and disqualify them from your list.

Tip 3. Good Demand for Product 

A successful product requires demand. This is, in part, why you will never find a zero-competition product category. In fact, if you did, I would be concerned about possible demand issues that will cause your product not to sell. 

Look up the number of sales on Amazon for your target product. A good product choice will have 100s of sales per day and not 10s of sales per day.

Another good way to assess the potential demand for a product is to look for sponsored product advertisements on and off Amazon. If someone is paying to advertise under your keywords, then there is some demand for that product. Again, you are looking for high sales volume, high demand, and a low number of reviews.

Tip 4. Pay Attention to Accurate and Efficient Costing

It may sound overly obvious to say that the profit margin is an important detail when choosing a profitable niche. Unfortunately, many sellers get caught up in researching keywords and completely overlook the basics. 

In addition to the product’s cost, you will need to account for additional fees related to stocking, selling, and shipping the product. What is the cost to ship to you or your fulfillment warehouse? What is the cost of stocking an item in your fulfillment warehouse? What will it cost to ship the item to the buyer? What are the seller fees that Amazon charges? How much will you need for marketing campaigns?

At the end of the day, you need to walk away from anything that will not offer a good profit margin so that there is enough money to cover all of these things.

Tip 5. Watch Communities for Amazon Niche Ideas

If you have tried your first round of concepts and come up short of finding a good Amazon niche idea, have no fear. Finding the diamond in the rough is no easy task. After all, you are one of over five million sellers on the Amazon marketplace, and many niches are oversaturated. 

Like a traditional brick and mortar retail store, product research is a little bit of science and a little bit guesswork.

Join online forums and Facebook groups in the subcategory that you are interested in. Once you get in there, get active, and engage with other users. No one likes a sales troll, so while you are there to observe the conversations, don’t be afraid to get involved and spark some chatter.

Put your’ ear to the ground’ so to speak, and listen to what real prospective consumers are asking for. If everyone is raving about a new product, or better yet – talking about a new product in a not so great way. Listen to the conversation. A hot new product with high demand but has an obvious flaw is a retailer’s dream come true. 

You don’t have to reinvent the wheel or fabricate an idea out of thin air. You just have to solve their problem with the product and simply offer a better alternative.

Tip 6. Pay Attention to Logistics

Don’t put the cart before the horse when choosing an Amazon product niche. With all of the legwork that goes into finding a low competition niche with high demand, many sellers forget to look at the whole picture. The entire process, from sourcing and managing inventory to fulfilling and shipping orders, should be considered in costing. 

Oversized, bulky, and heavy items will be costly to ship. If you are focusing on providing items that are Prime eligible, this is going to cost you a fortune. And if you are passing shipping costs on to the buyer, high shipping costs are going to turn potential buyers away in droves.

Now you need items that are in high demand with low competition, small, lightweight, and easy to ship. Stay away from any items that have potential hazardous shipping restrictions as those additional services will also drive up your shipping costs.

Tip 7. Evaluate the Competition

If you get close to finding an ideal niche idea, don’t stop at the raw numbers for competition data. Look at the top five or six competitors and thoroughly evaluate them compared to your brand. 

Audit Competitor Listings

Take a close look at individual product listings from the top competitors. Titles, features, descriptions, and images are all important. Look for gaps in the information provided versus the questions buyers ask and aim to meet those gaps in your product listings. Keep wording and images consistent with competitors. Offer more detailed descriptions or more product pictures when possible.

Research Competitor Branding

Spend at least thirty minutes analyzing each competitor for their branding efforts. What type of language do they use, how are their images styled, and how do they package the product? Again, look for opportunities to set your brand apart with eco-friendly packaging or witty sales copy.

Check Competitor Reviews

Evaluate competitor listings based on what shoppers are saying about their products. How does the quality compare to your products? What are the notable strengths or weaknesses? What is the average rating? How does the competitor respond to critical reviews?

View Competitor Amazon Stores

Spend another thirty minutes, specifically visiting the Amazon store setups of your top competitors. Look at the design templates they have used, how products are displayed, and how social media links are featured.

Analyze Competitor Keywords

Take a good look at the target keywords that your competitors are using. There are several tools available that will reverse SEO any web page or text so you can easily identify what keywords a listing is ranking for. Make sure that your keywords cover at least the same territory that your competitor’s keywords cover. It is ok if you have additional keywords as long as they are relevant, but don’t miss a big opportunity because you overlooked a keyword.

The Takeaway on Finding a Profitable Amazon Niche Idea

The competition is thick on Amazon, but it is still one of the most popular e-commerce platforms. More than five million sellers are making a go of it every day by finding a profitable niche and optimizing it. 

A good niche is more than just finding a product with high demand and low competition. It is about understanding how consumer behavior works and about not being afraid to serve a small, specific audience. When it comes to a profitable Amazon niche, do your homework and choose one good thing to sell. Focus all of your energy on that one thing and do it well.