The goal of any business is to make money. However, that doesn’t mean sales should be the only metric you use to measure your success. You could sell thousands of products, at a high price, but if your costs outweigh your revenue, you’ll have nothing to show for it. This is why it is essential to sell items with the best possible profit margin.
In this post, we will look at what makes an item a high margin product and how you can find these products to sell on Amazon.
Table of contents
- How to Find Amazon Products With Good Margins
- What is Profit Margin in eCommerce?
- 10 High Profit Margin Products and Niches on Amazon
How to Find Amazon Products With Good Margins
To find products with good margins, you need to know at what price you can sell a product for and what you’ll need to pay in order to sell. The best way to get this information is to use Amazon product research tools. These tools have sales data that you can use to quickly assess the margins for top Amazon products.
Let’s examine how to use some of these tools to discover high-margin products to sell on Amazon.
Validate High Margin Products Using AMZScout PRO Extension
The AMZScout PRO Extension is an awesome way to make sure your product ideas will bring in high profits. This will provide you with more details for specific products as well as profitability metrics for the niche as a whole.
Below are the steps for finding high margin items with the PRO Extension:
Step 1. Log into your AMZScout account. If you’re using it for the first time, sign in with your email or Google account.
Step 2. Install the Chrome extension. Open “Menu” and click on “AMZScout PRO Extension” to install it to your browser.
Step 3. Go to the Amazon marketplace you are interested in selling on.
Step 4. Find your products. Use the search field to check out any niche you want to see. You can enter a product that your supplier has suggested, or browse any category from Amazon's recommendations, like cat food.
If you're not sure which products to start with, take a look at the Product Database guide below.
Step 5. Open the Extension. Click the AMZScout icon in your browser extension bar or the circular button in the lower-left corner of the page.
Step 6. Review the data. At the top of the app, you’ll find a compilation of stats for the niche. Among these is the average net margin. As the name of the metric suggests, this shows the average margin for the top products.
Step 7. Look for high margin items. In the results table, you can find the product margin for each individual item. To find the items with the highest margin, click the Net Margin column at the top of the table to sort the results based on margin.
Step 8. Calculate estimated monthly profit. Click and open Profit Calculator. Enter your costs for the item (price to buy the product, shipping expenses, etc.) to see your profit margins. The extension will automatically calculate your Amazon fees and show you how much you’ll make on every product.
When searching for high margin products don’t forget to look at other important metrics such as Reviews and Niche Score. This will ensure that you are able to sell the products in high enough volumes to capitalize on their high margins.
If you haven't partnered with a supplier yet, or you don't know where to start, try using the next tool to help you generate a list of potential products.
Explore Profitable Ideas with AMZScout Product Database
The AMZScout Product Database contains detailed sales metrics for hundreds of millions of Amazon products. Here is how you can use the Database to find products with high margins:
Step 1. Open the AMZScout Product Database, which is included when you get the AMZScout Seller's Bundle.
Step 2. Enter your product criteria. You can search for specific terms and there are several filters to refine products based on criteria such as sales and average rating.
Step 3. Apply the Net filter. Use this filter to apply a nominal margin to your products. It works with the following formula: Net = Product Price - Amazon Fees. You can use this to have the results only show products that keep a certain amount after Amazon fees are taken out.
Step 4. Click Find Products to generate the matching products. Review the results to find interesting items worth selling.
Note down any products that look like good options. You can then calculate an initial margin by subtracting the given fees from the product price. After that, you’ll need a bit more research to make sure the product is worth selling.
Adopt Experts' Best Practices
Online webinars present a perfect opportunity to learn from experienced experts for free and enhance your search process. During these events, you can:
Learn proven techniques from sellers who have achieved success.
Gain insight that you won't find in any blog.
Have the chance to ask experts questions directly.
Participating in a webinar will also give you the chance to receive exclusive bonuses, in addition to valuable product research tools.
Upgrade Research Process with Ready-to-Go Product Ideas
Want to get a list of products with profitable margins? When you purchase the AMZScout bundle with an annual or lifetime plan, in addition to a variety of helpful tools, you’ll also receive:
Monthly reports on Amazon's hottest products and other helpful insights
19 new high profitable niche and product ideas each week
Save time on research by signing up for the annual bundle, and receive 1000+ ideas on what you can add to your inventory.
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Now that you’ve grasped the concept of how to find high-margin products, let's take a deeper dive into the definition and types of margins.
What is Profit Margin in eCommerce?
Margin is a metric that shows what percentage of your sales revenue you keep as profit. In simple terms, higher margins mean a more profitable business. There are essentially two variables that affect your margins: your sales and your costs. When your costs go up, your margins decrease. When your costs go down, your margins increase.
Now be aware, that in eCommerce, there are several different margins that will affect your business. The ones you’ll want to be aware of are gross margin, operating margin, and net margin.
Gross Margin
Gross margin is the percentage you keep as profit after you deduct your product costs. A high gross margin means that you keep a good amount of each sale. However, it does not provide a complete picture of your business health as it does not include all your expenses. You can find the gross margin with the following formula:
Gross Profit Margin = (Total Revenue - Cost of goods sold) / Total Revenue
Operating Margin
Operating margin builds on gross margin by also deducting your various operating expenses. These are the costs needed to run your business. Common examples for Amazon sellers include:
Fulfillment and FBA fees
Amazon referral fees
Advertising costs
Refunds and disposals
Software costs
Rent, labor, and utilities
The formula for operating margin is as follows:
Operating Profit Margin = (Total Revenue - COGS - Operating Expenses) / Total Revenue
Net Margin
Lastly, there is the net margin. This is your final amount of profit after all costs are taken out. You can find it by taking your operating profit and subtracting any other expenses such as taxes or interest. Below is the formula for net margin:
Net Profit Margin = (Total Revenue - Total expenses) / Total Revenue
10 High Profit Margin Products and Niches on Amazon
Now that you know how to find high-profit margin products, let’s look at some examples of highly profitable Amazon items:
1. Wireless Earbuds
Average margin: 76%
Highest margin: 85%
Wireless earbuds are an electronic product with steadily growing demand. They are great for listening to music without tangled cables and are quite popular among regular exercisers. Whether you want to sell a name-brand item or create your own private label product, you’ll find plenty of manufacturers for wireless earbuds.
These products enjoy high margins due to a balance of high sales prices and low product costs. Being small items, they also benefit from low FBA fees.
Be aware, that consumer electronics products have some of the highest return rates on Amazon. You’ll need to consider these costs when calculating this product’s profitability.
View the PRO Extension for the most recent data.
2. Silver Chains
Average margin: 71%
Highest margin: 80%
Silver chains are one of the most popular products in the jewelry category. You can find a wide range of these items for both men and women and across various price points. Plus, you can source these products using a variety of methods, including print-on-demand. Like many jewelry items, silver chains have strong margins as you can apply a big premium to your sales price.
3. Hair Extensions
Average margin: 67%
Highest margin: 82%
Hair extensions are beauty products that allow the wearer to add length and fullness to their hair. Because the beauty niche has a consistently high demand on Amazon, you never have to worry about having enough customers when selling this product. These items have high margins because they are very low cost with minimal fulfillment fees.
4. Flying Ball
Average margin: 71%
Highest margin: 85%
The Flying Ball is a toy product with a strong sales volume. It works by floating in the air and then returning to your hand like a boomerang. This is another smaller item that you can get at a low cost, allowing you to sell it at a high margin.
5. Car Covers
Average margin: 68%
Highest margin: 85%
Car covers are great for keeping your car clean during inclement weather. They are particularly popular among shoppers who live in wetter areas. While these items can stretch to cover the length of a car, they are lightweight and easily folded, helping to keep storage and shipping costs low.
Have a look at the PRO Extension to get the freshest data.
6. Sleeping Bags
Average margin: 66%
Highest margin: 78%
Sleeping bags are insulated coverings used to sleep when you’re out camping or somewhere else without a bed. When you sell these products, you’ll have a variety of suppliers to source them from including those for both wholesale and dropshipping. Sleeping bags can be sold online for a high sales price relative to their cost, resulting in a good margin.
7. Garden Hoses
Average margin: 65%
Highest margin: 85%
Garden hoses are a popular outdoor product. Shoppers of all sorts buy these items to water their plants and grass. Hoses are bulkier than some of the items on this list but you can still get them for a low cost. Plus, there are plenty of suppliers for this product. You can even source them from a physical store as part of a retail arbitrage strategy.
8. Kids Play Tents
Average margin: 66%
Highest margin: 74%
Play tents are another popular item for children. On Amazon, you can find both indoor and outdoor versions of these products. Tents command a good selling price, so you can sell them at a high margin if you’re able to keep your product and shipping costs down.
9. Vegetable Choppers
Average margin: 65%
Highest margin: 80%
Vegetable Choppers are useful kitchen items that let you cut up a variety of different products. The kitchen niche has some of the strongest demand on Amazon so you’ll never lack customers when selling this product. You can set a high or low price depending on how you want to position your product. And, the sourcing costs are low so you can enjoy a solid margin no matter which you choose.
10. Pet Gates
Average margin: 64%
Highest margin: 85%
Pet gates help to keep your furry friends away from areas they shouldn't go. Due to their size, these products will have notably higher fulfillment fees compared to others on this list. However, because of their simple design, the product cost is generally low. Plus, you can list these items for a high sales price.
Conclusion
When evaluating high margin Amazon products, be sure to factor in all your potential costs. By doing so, you’ll ensure that you have the most accurate forecast when launching a product. You can then use the examples and the steps in this post to uncover the best high margin products for your business.
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