How to find a profitable, high-demand, low-competition product to sell on Amazon

If you’ve chosen to sell on Amazon but are struggling with product ideas, don’t worry. You are not alone, and it is possible to find a profitable product niche. 

As markets grow, expand, and evolve, consumer trends go through certain shifts as well. There are plenty of products on Amazon that used to be high up on the best-seller rank list but simply aren’t anymore.

Carrying out product research for Amazon can be akin to navigating a maze. There are simply so many categories and brands overlapping across markets that the process becomes tiring. However, with the right markers, guidance, and insights, you can always find a product that’s profitable and in demand. You just need to know what to look for.

In this article, we’ll outline the general guidelines, tips, and features that any profitable, high-demand product needs to have for your e-commerce business to be successful on Amazon.

Here are our suggestions for solid product research.

Start with the website

The first and most reliable place to start researching a good product is Amazon itself. In fact, Amazon’s best-sellers page is great for this purpose. You can begin by looking up products based on trending categories and sub-categories. Find out which product categories have been consistently in demand over the past few months. Mark the products that rank at the top of the list for each category and find out what makes them special or unique. 

Amazon’s best-sellers rank list is perhaps the best place to get product ideas. True, it can be misleading at times depending on how much you rely on the list. However, you can still take it as an informal guide of sorts to show you what features are compelling in a particular product niche. It is a great way to learn what makes a certain product appealing to customers.

Keep track of your competition

Even if you’re a small business in a local market, you’re very likely to have some strong competitors. Look at the kind of products they are selling and whether customers are satisfied with them. Think about the ways you could improve on them and offer a better product for a better price. Use well-known tools to assess their performance on Amazon.

Check the price range

Any product that lies in the $10-$50 range is ideal to attract customers who buy on impulse. The price range isn’t too expensive to be discarded outright and isn’t too low to make it come off as cheap or mediocre.

There is also another factor to consider. When there are competing products that are almost similar in quality, bulk customers always go for the low-priced option to save up on sourcing costs. Finding a product that doesn’t exceed the ideal range by a drastic margin could be a deciding factor for your business.

A lot of products are overpriced when you buy from a tough market. Most of them include everything from transport charges, taxes to manufacturing costs. The key to succeeding is to look for markets where a product is in low demand and find a way to source it cost-effectively. When you do your research, don’t limit yourself to your own location alone. If you can strike a deal with large-scale manufacturers that works great for both of you, then that’s the way to go.

Also, make sure you ask around from multiple sellers before you decide who to buy from. Don’t stop at Google search when you’re looking for quotes.  Contact them directly and see if anyone’s willing to give you some leeway. A lot of manufacturers might take advantage of newbies by quoting prices that are substantially higher than what the product is worth.

Look up average sales per day

When you start selling on Amazon, you need a baseline that you can cover regularly. Selling 10 products a day might seem ambitious but with the right product, you might end up surprised at how many sales you manage to pull off.

The key is to not get caught up in a single strategy or a particular market.  Let’s say you sell custom-designed T-shirts and offer your own artwork that appeals to a certain demographic. If things don’t work out initially, you need to be willing to switch up your focus if you want to keep sales consistent. Experiment with different styles, content and try targeting a different audience. If you’re unable to sell at least 10 products a day on the website, then you might need to rethink whether it is worth selling or if your strategy is lacking.

Consider the Amazon Best-Seller ranking

Predicting how frequently a product might sell in a given market is very tricky. However, Amazon’s BSR list is a great marker for giving sellers a vague idea of what they can expect. A product that fits within the early 5000 in the rank list is a much safer bet than a product that lies somewhere in the 20,000 marks. The further you get away from the initial two or three thousand, the lesser your chances of making a sale in that category.

However, it would be wise to not jump to conclusions when you use BSR to find a good product. Sometimes categories can overlap to the extent that a product that’s really popular in one category may not be in another category.

Pay attention to keyword and search trends

A keyword analysis is one of the biggest tools you have in your arsenal. It is very useful because it gives you an idea of how much demand there is for your product in concrete figures and numbers. It tells you how many times shoppers have searched for a particular product from the website.

The two major platforms for comparing keyword and search trends are Google and Amazon. Whereas Amazon gives you an idea of what’s popular on the Amazon website at any given time, Google keyword tools help you get a broader understanding of what customers are looking for, from all over the world in different markets.

There is plenty of different software, both paid and free, that helps you get insights from keyword trends that are studied over a period of time. You should try different filters such as location, frequency, search volume, and conversion rates so that your projections become much more precise and informed. After all, it is a self-evident fact that keyword trends directly indicate demand.

Bigger size means higher shipping costs

You might be wondering what heft, size, and weight have to do with your sales and profit margins. This becomes an issue when you’re shipping the product overseas or to another, distant location for delivery. Shipping costs grow as the size of the product gets bigger. So the larger the product, the more it will cost you and the lesser your profit margins will be. This is why it is generally a good idea to look for lightweight products when you start out. 

Truth be told, selling heavy and large items like furniture, game sets, household items are a lot more difficult than you think. Customers frequently have an issue with the product not being up to expectations or satisfactory. Smaller, affordable items aren’t as frequently returned as large ones and they’re also less prone to damage in shipping.

Do note that these are just guidelines for newbie e-commerce sellers on the Amazon platform who haven’t yet decided on a product. This doesn’t apply to sellers who own unique product inventory ready and are engaged in business.

Check seasonality

Seasonal products always attract a greater deal of competition and the demand begins to diminish and die out when the season ends. Unless you have a limited stock of such products, it’s best to avoid trying to jump in on seasonal opportunities if you don’t actually have something really unique to offer.

You need to find a product that’s in demand all year, every season. Otherwise, you’d be limited to a once-a-year boom in business activity with plenty of competitors. 

For eg: If you intend to focus solely on Christmas tree decorations, you can’t expect to have any customers throughout the rest of the year once the festive season is over. This is why you should think long-term when it comes to picking a product.

Do a proper and thorough Google Trends search to find out how frequently customers buy a product during the year. It will give you a good idea of whether the product you’re looking at is limited to any specific season or not. If the product experiences a major boom in sales during only a specific time of the year, it’s best to look for something else. Consistency is key to succeeding in e-commerce.

Avoid big-brand markets

One of the ways to establish a foothold in the Amazon market is by picking products that have fewer brands competing for them. Sure, every product category has a few really popular brands that take up a major share in the market. At the same time, that doesn’t mean the products are affordable. Customers will welcome a product that’s affordable as an alternative choice if the mainstay brand’s prices are too expensive.

Step up your optimization game

So far, we’ve talked about studying and analyzing brands that are doing exceptionally well in sales. But you must remember that the real opportunities usually lie in a market where the top-selling brands are doing a poor job. Just because there is a dominant seller in a particular product doesn’t mean the customers aren’t open to alternate options. In fact, some might even prefer to have multiple product options to choose from.

Keep in mind, when the top-selling brand of a particular product has an under-optimized listing, that right there is an opportunity for you to outsell them by doing a better job. You might have noticed product listings on the front page of a search that has low-quality product images or poorly done descriptions. These are all flaws in optimization where your brand can excel. In fact, if they are selling well with a mediocre listing, imagine what you could accomplish with an excellently prepared one.

In short, bad listings on the front page of a search result should be seen as a golden opportunity for you to make your mark. If you can do a better job than your competitors, there’s no denying that customers will eventually gravitate towards you for products in that category. 

Best Seller Ranking: Key points to note

In a previous lesson, we talked about how the BSR of a product is updated hourly and how it’s calculated. We suggested that Amazon’s algorithm combines historical sales records as well as recent sales data to arrive at an hourly Best-Seller ranking. Now here’s what you need to focus on:

Products that move up the BSR list over a period of 24 hours are very significant. They show that the product’s sales performance has been consistently improving over a long period of time. This is what leads to the jump in the best-seller ranking. If the trend continues, you can take it as a sign that there’s a steady, growing demand for the product which is worth looking into.

In short, even the most subtle variations in the ranking have bigger implications. You can glean a wealth of insights from the most minute data in this way. At the same time, remember that you’ll have to undertake the bulk of the research by yourself. BSR might suggest a product is succeeding in sales but finding out why is up to you. Naturally, you’ll have to look at changes like updates in the listing, current events, promotions, etc that tell you why exactly a product is experiencing a surge in sales.

Stay updated on new arrivals

Now, this is a section that can be truly inspiring! There are plenty of new arrivals on Amazon that begin to sell really well. They can indicate a rapid change in customer trends, a special occasion, or a really widespread phenomenon that’s probably worth knowing about. We see this happen a lot of the time in the fashion industry. 

Certain sunglasses, costumes, or accessories become super-trendy when a celebrity figure popularizes them or endorses them. The pandemic kick-started a lot of hygienic product sales. The demand for sanitizers went up through the roof. These are events you can’t predict but can nonetheless recognize when they happen.

In short, it pays to keep track of new releases on Amazon, especially the ones that are successful in a very short period of time. Find out what’s driving their sales and learn how to leverage those factors to your own advantage.

Avoid legally disputed items

It is crucial that your product doesn’t have any legal issues. Avoid contested products that expose you to trademark violations. It is better to play it safe and risk-free when you’re just starting out.

Look for products that are easy to ship

This is a debatable factor but it does increase your chances of making more sales. Online records have proved time and time again that small-sized objects have a higher consumer demand in general. When customers shop online, they tend to make safer, lightweight purchases more often. Meanwhile, sellers can benefit from the reduced shipping costs and storage requirements that come with smaller products.

Take advantage of the gift market

Gifts are unpredictable, precisely because of the fact that a gift could be virtually anything. We all have varying tastes and interests. This adds to the versatility of Amazon’s most-gifted list and most wish-listed products. It helps you discover and consider selling things that you might never have even thought of. 

The best part about such lists is that they might include some of the most overlooked yet highly profitable products with very minimal competition. They might not be as in demand as you expect them to be, but the high-profit margins can still compensate for that sometimes. 

In other words, if you happen to own antique lampshades or deal in custom-made rustic furniture and other products that do well as potential gifts, there are many ways to cash in on them. Remember, a lot of it depends on how you market the product. Make sure you emphasize any aesthetic or functional qualities that make your gift product unique. This is where optimizing the title and description work in your favor. You’ll be able to attract just the right kind of customers looking for what you have to offer.

Product categories to avoid

If you’re just starting out and are unsure what product categories to choose, it is best that you know which ones to avoid first. Some of them are highly competitive, heavily saturated markets that are incredibly hard to break into, let alone excel at. If you intend to use your own brand and become a private label seller, then products such as cameras, paintings, electric appliances are a hard niche to get into. This is because they are already populated by thousands of established brands with years of experience in building consumer trust and confidence. Marketing can be very complicated, to say the least.

Another reason they are discouraged for beginners is because of the rigorous safety standards and legal requirements that come with them. You’ll have to get certified assurances for quality and undertake a great deal of liability in case the products underperform. The same rule applies for physically consumed or applied items such as lotions, creams, snacks, supplements, etc. All these need to be cleared and certified by health and safety experts before you can sell them on Amazon. Needless to say, they also come with their share of risks and liabilities.

In other words, if you are starting out and just looking for any product that sells fast, brings in good returns, and isn’t much of a risk, then it’s best to avoid anything that comes with a set of high standards.

How to assess demand the smart way

Your product is only as good as the demand it generates. Even if you have a high-profit product that’s unique in the market, it won’t make much of a difference if no one is interested in buying it. The following are a few pointers that help you examine and recognize how much a product is in demand.

Here’s a quick tip for finding out the frequency of sales on Amazon for any particular seller:

Firstly, go to the Amazon website and visit the page of the product you’re interested in. Add it to your cart and update the number of items you’re buying to 10+. You’ll get a box where you can type in how many of the product units you want. Here, type 999. This is the highest possible purchase you can make. If there are less than 999 units available in the seller’s inventory, you’ll get a message displaying how many are actually left. This way you can track their inventory over a period of time and see how fast and frequent their sales are on average.

Although the method isn’t bonafide or fool-proof and does have its drawbacks, it’s good to have fresh ways of approaching your product research, especially when you run out of ideas. Remember, your goal is to keep track of demand for the product. You’re not concerned with the price as much as you are with how fast the inventory is depleted. The faster, the better.

Tracking demand helps you assess whether or not customers in the market will be interested in buying from you. At the end of the day, that’s what really matters.

Final thoughts

Finding a product that’s profitable, in-demand, and attracts less competition can be a very difficult task. Especially on Amazon, where thousands of products are listed across varying categories. But that’s no reason to lose hope.

There are plenty of tools and techniques that help you assess demand, narrow down your options to a particular niche, and find your dream product. You just need to know where to look and what to look for.

The good news is that a majority of your research will most likely be on the internet. Google and Amazon have become the go-to platforms for gaining tremendously helpful insights, with the most subtle indicators.

If you like the thrill of learning more about different markets and how products become sales then research can be a really fun experience. At the end of the day, that’s just the right attitude that helps you succeed.