As competition gets fiercer in the e-commerce ecosystem, sellers face mounting challenges to stand out and maintain profitability. With rising customer acquisition costs and marketplace fees, margins are more important than ever.
It’s not all doom and gloom, though: With online sales projected to exceed $8.1 trillion by 2026, there’s still plenty of opportunity in e-commerce. The trick is maximizing your profitability — and that starts with product selection.
Which niches and products offer higher profit margins? Let’s dive into some high-margin products to consider, as well as some proven strategies for choosing profitable products.
High-Profit Product Types to Sell in 2024
Let’s get right to the good stuff: specific niches that are profitable right now, and their average profit margins. This list isn’t exhaustive, but if you’re looking to expand your offerings, it’s a great place to start.
Vitamins and supplements
Vitamins and supplements like protein powder are still a profitable and growing niche to break into. However, new compliance requirements by Amazon could make it more difficult to sell these products on the platform. Shopify recommends using Google Trends to choose which supplements make sense for your online business to offer.
💵 Estimated profit margin range: 38% – 40%
Pros:
- The health-conscious consumer base is growing
- High AOV — shoppers spend $96.50 on average
Challenges:
- Stringent labeling and advertising requirements
- Ensuring brand is seen as safe and effective
Pet products
The pet care industry is lucrative and ever-growing — pet owners are willing to spend generously on their furry friends. 🐶 Products in this space are often low cost and can be sold at a healthy markup.
💵 Estimated profit margin range: 30% – 50%
Pros:
- Wide variety of different products and niches within the industry
- Recurring revenue potential for consumables like treats and shampoos
Challenges:
- Complex regulations
- Ensuring product quality and safety
- Some products are bulky (e.g. dog beds) and take up lots of warehousing room
Fashion
Fashion is a dynamic and competitive industry, but with the right strategies, it can be very profitable. Apparel, particularly seasonal socks and undergarments, has a good profit margin.
💵 Estimated profit margin range: 30% – 50%
Pros:
- High demand for trendy designs that change quickly
- Potential for higher prices on luxury items
Challenges:
- Rapidly-changing trends can be hard to keep up with
- Managing inventory and minimizing unsold stock
Jewelry
Jewelry is a timeless product category. Margins in this space can be fairly high to “insanely high,” depending on the product. From fine jewelry to inexpensive accessories, there’s a wide range of options to explore.
💵 Estimated profit margin range: 42% – 50%
Pros:
- Emotional significance of fine jewelry, especially as a gift
- Substantial markup on precious metals and gemstones
Challenges:
- Sourcing authentic materials
- Building credibility in a competitive market
Beauty
The beauty market is constantly evolving — and it’s currently in its influencer era. The diverse range of beauty products you can offer in this market includes skincare, perfume, nail care, hair care, extensions, bath products, and more.
💵 Estimated profit margin range: 26% – 50%
Pros:
- Recurring revenue opportunities with consumable items
- High potential for customer retention and brand loyalty
Challenges:
- Complex regulations
- Standing out in a saturated market
Artwork and crafts
Don’t let this niche market fly under your radar. If you have a creative side, this market provides a rare opportunity to make money doing something you love. From paintings to handmade jewelry and home decor, it can be a profitable industry.
💵 Estimated profit margin range: 50% – 70%
Pros:
- Opportunities for personalization and customization
- Artist’s passion adds perceived value to products
Challenges:
- Building a customer base
- Managing production for handmade items
Baby products
You could say three things are certain in life: death, taxes, and babies. There are always new parents willing to invest in high-quality products for their little ones. Potential products in this growing industry include clothing, toys, furniture, and safety gear.
💵 Estimated profit margin range: 30% – 60%
Pros:
- Consumer willingness to spend on high-quality products
- Recurring revenue for consumables like diapers and wipes
Challenges:
- Ensuring quality and safety
- Complex regulations
Home
The “home” market encompasses a wide range of product categories, from bedding, kitchen appliances, cookware, organization solutions, and even decor like candles.
💵 Estimated profit margin range: 30% – 50%
Pros:
- Consistent demand for home improvement
- Lots of niche opportunities
Challenges:
- Shipping and logistics for bulky or heavy items
- Staying competitive in a crowded market
Small electronics
Small electronics, like earbuds and speakers, can be very profitable. Phone accessories such as cases and chargers also fit here. Constant innovation in this space means a consistent demand for the latest and greatest.
💵 Estimated profit margin range: 30% – 40%
Pros:
- High markup on premium products
- Small products take up less warehousing space
Challenges:
- Keeping up with rapidly-changing technology
- Minimizing unsold stock due to obsolescence
7 Tips to Find High-Demand, High-Margin Products
Identifying the right products is crucial to maximize your profitability. These seven tips will get you on track to gain valuable consumer insights and make informed decisions on your online store’s offerings.
1. Use the Right E-commerce Tools
No matter where you’re selling, each marketplace has tools, filters, and features you can use to find data on product trends. In most cases, these built-in tools are also free for sellers.
Here are two of our favorite use cases:
- Use tools like Amazon BSR, SellerApp, and Helium 10 to explore trending categories and identify gaps where you could introduce a unique product.
- eBay has its own Marketing feature and other tools to help sellers recognize hot products that may win with customers.
2. Use Search Engine Analytics
Search engine trends and patterns provide valuable insights to identify high-demand products. Free tools like Google’s Keyword Planner quickly reveal what products are trending.
Sticking with the Google theme, check out Google Trends for high-level keyword search volumes and patterns over time. This can help pinpoint seasonal demands and the best times to sell specific products.
Of course, if you’ve got the budget, you can opt to invest in expert analytics to get even more actionable tips and metrics.
3. Analyze the Competition
Tools and analytics can help you identify potential high-demand products, but there’s no guarantee those products will soar once launched.
To find out whether a product will truly be profitable, nothing beats checking out your competition. Tactics in this area might include:
- Read competitor reviews to see what other products are getting wrong and try to offer something that better meets consumers’ needs.
- Explore other factors in a product’s success, like packaging, promotion, and launch timing.
- Compare social media presence, including following, mentions, and engagement.
- Monitoring inventory where competitors are selling. Are they sticking to one channel or are they diversified across multiple channels like Amazon, eBay, Walmart, AliExpress, and Overstock?
By thoroughly evaluating your competition, you can gain insights into a product’s true potential and identify ways to differentiate your offering.
4. Compare Product Performance
A product’s popularity can vary across channels. One product might top the Amazon best-selling list but fail to appear in the top ten on Etsy.
To get a comprehensive view of a product’s potential, look at its overall performance across multiple e-commerce platforms.
And remember, crossing over to sell new products may require new marketing strategies and other changes. Sellers should have a clear idea of what types of products they intend to sell online and the target market they’re intended for.
5. Use AI and Predictive Tools
Tired of hearing about AI yet? Like it or not, it’s here to stay. AI-powered predictive tools can give you a competitive edge in identifying high-demand products.
These tools analyze vast amounts of data like search trends, social media mentions, and consumer behavior patterns to forecast product demand.
This helps take the guesswork out of predicting demand in a dynamic market. It also gives you a glance at future trends and keeps you ahead of the curve.
For example, say sundresses are all the rage this summer. If you’d known to manufacture a ton of them a couple months ago, you’d be making a killing today.
6. Become a Master of Social Listening
Want to find out what your customers want? Listen to them.
Use social listening platforms to monitor what products and trends your audience is discussing, sharing, and searching for. Staying on top of social media conversations helps you spot emerging trends early.
Reddit in particular provides valuable insights from other sellers on what products are performing well across platforms. Be sure to approach this crowd-sourced info cautiously — some sellers might try to mislead you to reduce competition.
7. Don’t Forget Your Margins
High-demand products aren’t automatically profitable.
Sellers should calculate the profit margin and ROI potential before investing in any product. The general rule of thumb is to start selling products with a 100% markup, which usually translates to about 50% profit.
Whether you’re dropshipping or fulfilling your own orders, shipping costs play a huge role in profitability. Small and light products are more cost-effective to ship and can often be shipped in bulk. Smaller items also cost less to store, saving you on warehousing costs.
Keep in mind, the size of the product is a significant factor in keeping your costs low. Profitability could come down to each seller’s capacity and logistics.
Staying Ahead of the Game in E-commerce
As the world of commerce continues to evolve, e-commerce entrepreneurs can stay ahead of the curve by offering in-demand, high-margin products.
Launching new products can increase your revenue without skyrocketing costs — but market research and planning are crucial before you take the plunge.
And remember, product selection is just the first step. Pricing strategies, buzzworthy marketing, operational optimization, and customer experience are also key to maximizing your e-commerce store’s ROI.
We’ve got everything you need to position your e-commerce business for sustainable growth and profitability. Check out our growing resources hub for more strategies.
