Most Profitable Amazon Categories 2024: Which Products Are Most Lucrative?

Most Profitable Amazon Categories: Key Insights

• Marketplace Influence: A major factor in the success of online platforms like Amazon is the contribution of third-party sellers, who are projected to generate 66.1% of Amazon's total gross merchandise volume by 2024.

• Profitable Strategies: The success of Amazon sellers’ hinges on strategic choices, including niche selection, competitive analysis, and pricing tactics. Categories such as beauty and personal care, along with home and kitchen, are highly profitable.

• Strategic Niches: The prominence of categories like home and kitchen underscores the importance of choosing the right products to sell. Sellers can find opportunities in less competitive categories, as shown by the success of those who target underexplored areas within Amazon's marketplace.

In today's eCommerce industry, selling products through online marketplaces is a beneficial way to be successful with your business. In addition to providing a platform for third-party merchants to do business, many marketplaces, such as Amazon, also sell their own-branded products.

A closer look reveals that this hybrid business model is experiencing significant growth: Our data shows that third-party sellers is projected to account for 66.1% of Amazon's total gross merchandise volume (GMV) in 2024, an increase of 70% since 2011. This growth is to be expected, as online marketplaces offer small businesses a valuable, low-barrier opportunity to offer their products to a broader audience.

Amazon Product Categories: Which Ones Are Most Profitable?

Amazon's marketplaces offer a wide variety of opportunities for sellers, but profit margins seem to depend largely on the choice between the more than 40 product categories found on Amazon.

A Jungle Scout analysis shows that there are significant differences between product categories on Amazon in terms of profitability.

Almost one-third of beauty and personal care sellers have found success by meeting the demand for self-care and grooming products: 30% of Amazon sellers in the category beauty and personal care are highly profitable with a net margin of 21% or more. Notably, beauty and personal care is not only very profitable but also ranks as one of the most popular Amazon categories for sellers. With 26% of Amazon sellers offering products in the beauty and personal care category, it is the second most popular product offering.

Sharing the podium with beauty and personal care, home and kitchen products are also a highly profitable Amazon product category, with 30% of sellers in the category generating net margins of 21% or higher. Next to being comparably profitable, home and kitchen is also the most popular product category for Amazon sellers: 35% have products from the home and kitchen category on offer.

The Amazon categories clothing, shoes and jewelry, arts crafts and sewing as well as electronics have profitability shares higher than 20%. Clothing and electronics are again two popular categories that are also relatively profitable. However, popularity and profitability are not necessarily always linked. 

Most Popular Amazon Category: Home and Kitchen

The Home and Kitchen category stands out as the preferred choice for many sellers, and its popularity can be attributed to several factors. First, home and kitchen products have a large potential customer base, as these items are an integral part of everyone's daily life.

Simple product requirements add to the appeal. Unlike categories with strict regulations, home and kitchen products often lack complicated specifications such as food expiration dates or toy certifications. As a result, 30% of home and kitchen sellers choose to manufacture their own private label products, according to Jungle Scout.

Amazon Categories: Find the Perfect Niche

A highly popular and therefore competitive product category often has a large user base and therefore a large number of sales opportunities, as seen with the beauty and personal care category or the home and kitchen category.

On the other hand, less competitive product categories such as electronics - only 16% of Amazon sellers are active in the electronics category - sometimes have a large customer base. This is reflected by 44% of Amazon shoppers who buy   electronics. This also means a high profit potential.

Least Popular Categories on Amazon

Having discussed the most popular categories, we now turn to the opposite: Product categories that are the least popular among Amazon sellers. Only 2% of sellers offer musical instruments, which is the lowest of any category. CDs and vinyl, luggage and travel, and video games are each offered by only 4% of sellers.

While certain categories on Amazon may be less popular among sellers, it is important to recognize that profitability is not solely determined by the overall popularity of a category. Key factors affecting profitability include the competitiveness of your product, pricing strategy and cost of goods. In fact, choosing a less competitive category can provide unique opportunities for success.

For sellers conducting product research, exploring these less obvious categories becomes a strategic move. By venturing into areas with fewer competitors, you increase your chances of finding a niche where you can establish your brand and product offerings distinctively.

In the final section, we discuss which are the product categories with the highest growth potential, meaning: They provide the perfect opportunity for sellers to increase their margins in a market that still has room for new competitors to join.

What Are the Fastest Growing Amazon Categories?

Fashion and apparel are not only categories that play a large role in global eCommerce, but they also have the most potential when we look at the fastest growing product categories on Amazon, projected from 2022 to 2027.

With a CAGR (2022-2027) of 12.4%, fashion and apparel have a high potential for Amazon sellers. Close behind is health and beauty, with a projected CAGR (2022-2027) of 12.1%. Office supplies have been one of the smallest contributors to sales, but they are projected to grow at a CAGR of 11.6%, the same as with electronics.

Most Profitable Amazon Categories: Closing Remarks

Amazon offers businesses large and small the opportunity to get their products in front of a wider audience. However, success depends on the product category in which your business wants to specialize.

This insight discussed key indicators such as popularity and profitability among sellers, but also which product categories are expected to grow the fastest in the coming years. Without a doubt, platform providers are the clear winners in this guessing game, as they profit from every sale on their site and can gauge consumer interest most directly.