Most Profitable Items to Sell on Amazon

Selling on Amazon can be incredibly lucrative – but only if you choose the right products. With millions of sellers competing in the marketplace, finding high-margin, high-demand items is the key to success. 

The most successful Amazon sellers follow a simple formula: spending ⅓ of the product’s sale price on sourcing, allocating ⅓ for Amazon fees, and keeping the remaining ⅓ as profit.

But how do you know which products offer the best margins? In this guide, we’ll break down the most profitable categories, what makes a product a winning choice, how to correctly calculate profitability for single and bulk products, and strategies to maximize your earnings. 

What Are the Product Profitability Metrics?

To maximize profits on Amazon, sellers must evaluate key profitability metrics before investing in a product. These indicators help determine whether an item is worth selling and meets your profitability expectations, and how much revenue it can generate after expenses. Here are the essential metrics to analyze.

Profit

Profit is the amount left after deducting all costs from the selling price. It is calculated as:

Profit = Selling Price - (COG + Amazon Referral Fees + FBA Fees + Monthly Storage Fees + Taxes Tax (or VAT) + Logistics Costs)

This metric helps sellers understand their actual earnings per unit after covering all expenses.

ROI (Return on Investment)

ROI measures the profitability of an investment as a percentage. It is calculated as:

ROI = (Profit ÷ (COG + Sales Tax (or VAT) + Logistics Costs)) × 100%

A healthy Amazon ROI is typically between 15-30% or higher. A high ROI means the product generates a strong return on the initial investment, making it more attractive for sellers.

Margin

Margin represents the percentage of revenue that turns into profit. It is calculated as:

Margin = (Profit ÷ Selling Price) × 100%

A good Amazon margin is 15% and up, ensuring sellers earn a reasonable profit while covering all costs.

What Makes a Product Profitable on Amazon?

Not all products on Amazon are equally profitable. The best-selling, high-margin items share common characteristics that make them sustainable and lucrative for resellers. Below are the key factors that influence a product’s profitability.

High demand and moderate competition

A profitable product should have consistent demand and a stable sales volume. However, too much competition can drive prices down, making it harder to stand out. Finding a balance between demand and manageable competition ensures a steady stream of sales without aggressive price wars.

• How it affects profitability

Products with high demand guarantee consistent sales, reducing the risk of inventory sitting idle. However, if competition is too high, sellers may be forced to lower prices, cutting into profit margins. The ideal product has steady demand with moderate competition, allowing for stable pricing and higher profitability.

Strong profit margins

Selling a high-demand product is not enough – it must also offer a strong profit margin. A good margin ensures that after deducting Amazon fees, logistics, and production costs, there is still a healthy percentage left as profit. Sellers should aim for at least a 15% margin or higher to maintain long-term profitability.

• How it affects profitability

A product with high sales but low margins won’t generate sustainable profits. Strong margins ensure that after covering Amazon fees, production, and fulfillment costs, a seller retains enough earnings. A margin of at least 15% helps protect against price fluctuations and unexpected expenses.

High product sales velocity

Sales velocity measures how quickly a product sells over a given period. A high sales velocity means fast inventory turnover, reducing storage fees and increasing cash flow for reinvestment. The faster a product sells, the quicker a seller can generate profits and scale the business without the risk of overstocking.

• How it affects profitability

High sales velocity reduces Amazon FBA storage fees by ensuring that inventory moves quickly, preventing long-term storage charges. Faster sales also improve cash flow, allowing sellers to reinvest in new stock without tying up capital in slow-moving products.

Correct cost estimation 

Many new sellers underestimate Amazon’s referral fees, fulfillment fees, and storage costs, which can quickly eat into profits. Accurately calculating these expenses before listing a product helps ensure that it remains profitable after all deductions.

• How it affects profitability

Failing to account for Amazon’s referral fees, FBA storage fees, and fulfillment costs can lead to selling at a loss. Proper cost estimation prevents this by allowing sellers to price products accurately while maintaining profitability. Understanding fee structures ensures that every sale contributes to a healthy bottom line.

Low shipping costs

Lightweight and compact products cost less to store and ship, reducing fulfillment expenses and increasing overall profit. Choosing items that qualify for lower shipping rates or have minimal dimensional weight ensures sellers keep more of their revenue while maintaining competitive pricing.

• How it affects profitability

Shipping expenses directly affect profit, especially for heavy or bulky products. Choosing lightweight, compact items minimizes storage and logistics fees, increasing overall profit per unit.

Top Most Profitable Categories on Amazon

Choosing the right product category is essential for success on Amazon. Some categories consistently offer high demand, strong profit margins, and steady sales, making them ideal for resellers. Below is a breakdown of the most profitable Amazon categories, including top-selling product examples and why these categories are lucrative.

Most profitable Amazon categories and product examples

How to Calculate Product Profitability?

To determine a product’s profitability, sellers use Amazon’s FBA and FBM calculators, which help estimate expenses and potential profits. 

Two methods for calculating profitability

• Single product calculations

Useful for evaluating individual products directly on Amazon product pages or supplier websites.

• Bulk product calculations

Essential for wholesale or arbitrage sellers who analyze multiple products simultaneously.

Seller Assistant allows you to efficiently perform both types of calculations, providing instant insights into costs, fees, and expected returns.

Note. Seller Assistant is all-in-one product-sourcing software offering 20+ tools that helps Amazon sellers quickly find profitable and low-risk deals. It provides you with effective solutions for bulk wholesale price list scanning and brand analysis alongside advanced product research extensions, tools, and features providing you with in-depth product research data.

It combines three extensions: Seller Assistant Browser Extension, and IP-Alert Chrome Extension by Seller Assistant, and VPN by Seller Assistant, Amazon seller tools: Price List Analyzer, Brand Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View,  Storefront Widget, Quick View, FBM&FBA Profit Calculator, Sales Estimator, Offers, Variation Viewer, Stock Checker, and offers secure and efficient solutions for teamwork.

Single product profitability calculation

For single products, sellers can use Seller Assistant's FBM&FBA Profit Calculator, which appears directly on Amazon product pages and supplier websites. This tool displays all essential profitability metrics, allowing sellers to make informed decisions quickly.

How Seller Assistant’s FBM and FBA Calculator works

Seller Assistant’s FBM&FBA Profit Calculator provides a side panel on Amazon product pages and supplier websites, offering a clear breakdown of FBA and FBM fees, logistics costs, and sales tax considerations. With this data, sellers can instantly determine whether a product is worth purchasing for resale based on its profit, ROI, and margin.

Key metrics displayed

• Profitability metrics
  
  • Cost of Goods Sold (COG) – Enterable
  • Profit
  • ROI
  • Profit margin
  • Break-even price
  • Minimum price for Amazon Repricer
• Amazon FBA and FBM Fees
  
  • Total FBA fees
  • Total FBM fees
  • Referral fees
  • Inbound placement service fees
  • Storage fees (displayed directly on Amazon product pages)
• Logistics costs
  
  • Third-party logistics (3PL) costs – Configurable or enterable
  • Shipping costs – Configurable or enterable
  • Prep costs – Configurable or enterable
• Sales Tax & VAT calculations
  
  • Sales tax calculation (toggle on/off)
  • VAT schemes:
    
    • No VAT
    • Standard VAT rate
    • Reduced VAT rate
    • Non-registered VAT for UK sellers
    • VAT on fees for European sellers on Amazon US or Canada
    • Incoming VAT for cost of goods

Steps to use Seller Assistant’s FBM and FBA Calculator

Step 1. Activate Seller Assistant

• On Amazon product pages, Seller Assistant appears automatically.

• On supplier websites, activate Side Panel View by clicking the Extensions icon in Chrome and selecting Seller Assistant Extension. This will open a side panel on the right.

Step 2. Enter Cost of Goods Sold (COG)

Input the supplier’s product price in the COG field to calculate profitability and Amazon fees.

Step 3. Select fulfillment method

Choose between FBA or FBM from the dropdown menu.

Step 4. Configure logistics costs

Enter shipping, prep, and 3PL costs manually or configure them in Seller Assistant’s settings to apply automatically.

Step 5. Calculate sales tax and VAT

• For sales tax: Enter COG, click on it, and enable the Tax toggle in the pop-up.

• For VAT on international sales: Select a VAT scheme in Seller Assistant’s settings, then enter COG and enable the VAT toggle in the pop-up.

Bulk product profitability calculation

For sellers dealing with wholesale and bulk product research, Seller Assistant's Price List Analyzer streamlines the process by automatically analyzing entire supplier price lists and identifying the most profitable items.

How Price List Analyzer works

With Price List Analyzer, sellers can automate bulk price list processing. The tool automatically matches supplier products to Amazon listings, calculates profitability for each product, and provides essential metrics. Sellers can filter the results by essential metrics, product warnings, and flags, and see which deals are profitable, and which have hidden risks or alerts. Set and apply filters to spot the deals that meet your profitability, selling eligibility, products risks, and other requirements.

To process a price list using Price List Analyzer, simply upload your supplier’s list and download an .xls report containing potentially profitable deals.

The Price List Analyzer can be accessed through the Seller Assistant personal account, where sellers can upload price lists and retrieve detailed profitability reports.

Key profitability metrics displayed

Pricing and profitability

• COG (Cost of Goods)

Cost of goods before tax. Product price at the supplier

• Cost of Goods incl. VAT

Total cost including VAT

• Buy Box price

Current price of the product winning the Buy Box on Amazon

• Break-Even price (FBA/FBM)

The minimum product price with 0% profit for Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). If you go below break-even threshold, you lose money on the product 

• Profit (FBA/FBM)

Estimated profit per unit using FBA or FBM fulfillment methods. Shows how much money you earn on the product

• ROI (FBA/FBM, %)

Return on investment for FBA or FBM orders, as a percentage

• Margin (FBA/FBM, %)

Profit margin after costs, expressed as a percentage

Fulfillment costs

• Total FBA/FBM fees

Overall fees associated with FBA or FBM services

• FBA fees

Fulfillment by Amazon fees

• Referral fee

Amazon's percentage-based fee on the sale

• Storage fees

Cost to store the product in Amazon’s warehouse

• Variable Closing Fee

A fee applied for books, music, video, blu-ray, and DVDs (BMVD) on top of other fees

• Inbound shipping costs (FBA)

Cost of shipping the product to an Amazon warehouse (for FBA) 

• Prepare/labeling cost (FBA/FBM)

Cost for preparing or labeling the product for shipment

• Fragile/bubble wrapping (FBA/FBM)

Additional cost if the product requires special packaging for fragility

Tax and compliance

• VAT on fees 

Value-Added Tax applied to fees. Applicable if you sell internationally

• Sales tax rate (%)

Applicable sales tax rate

• Sales tax

Total sales tax applied to the transaction

• Apply sales tax

Option to apply sales tax to the product or not

• VAT on fees rate (%)

Percentage of VAT applied to fees

Dimensions and packaging

• Height, width, length, weight (in/cm/lbs/kg)

Physical dimensions and weight of the product, useful for calculating shipping costs

• Product volume (cu ft/cu cm)

The product's volume, helpful for storage and shipping calculations

• Package quantity

Number of units in a package

Common Profitability Mistakes to Avoid on Amazon

Many new and experienced sellers struggle with profitability due to avoidable mistakes that eat into their margins. Understanding these pitfalls can help you maximize earnings, reduce costs, and scale your Amazon business successfully. Below are the most common mistakes sellers make and how to avoid them.

Ignoring Amazon fees and hidden costs

Many sellers underestimate Amazon referral fees, FBA fulfillment charges, and storage fees, leading to lower-than-expected profits. Properly calculating all expenses before listing a product ensures a realistic profit margin.

Choosing products with high competition

Selling in oversaturated categories often leads to price wars, making it difficult to maintain profitability. Identifying moderate competition products with strong demand helps sellers sustain healthy margins.

Pricing products too low

Setting a low price to compete may attract buyers but can result in minimal or even negative profits. Sellers should factor in all costs and use repricing strategies to balance competitiveness and profitability.

Neglecting sales velocity and inventory management

Slow-moving inventory leads to higher storage fees and cash flow issues. Choosing fast-selling products and managing stock efficiently prevents unnecessary costs and lost sales opportunities.

FAQ

What is the best way to find profitable products to sell on Amazon?

The best way to find profitable products is by using Amazon research tools like Seller Assistant to analyze demand, competition, and profitability. Look for products with high sales velocity, strong margins, and low competition to maximize earnings.

How do Amazon FBA fees impact profitability?

Amazon FBA fees include storage, fulfillment, and referral fees, which can significantly reduce profit margins if not accounted for properly. Sellers should always use an FBA calculator to estimate fees before sourcing products.

What is a good profit margin for selling on Amazon?

A healthy profit margin on Amazon is typically 15% or higher, ensuring sellers make enough after fees and costs. Higher-margin products provide better financial stability and help absorb unexpected expenses.

How can I reduce shipping and fulfillment costs?

Choosing lightweight and compact products helps lower storage and shipping fees, improving overall profitability. Sellers can also negotiate better rates with suppliers for cost-effective logistics.

How do I avoid price wars with competitors?

Avoid saturated markets by selecting moderate competition products and implementing a value-based pricing strategy instead of just lowering prices. Using automated repricing tools and building a strong brand presence can help maintain stable pricing and profitability.

Final Thoughts

Selling on Amazon can be highly profitable when you choose the right products, manage costs effectively, and avoid common mistakes. Understanding key profitability metrics, selecting high-margin, high-demand products, and optimizing your pricing and fulfillment strategy are essential for success. By carefully analyzing Amazon fees, shipping costs, and sales velocity, sellers can maximize their earnings and scale their business efficiently.

To simplify the process, tools like Seller Assistant provide instant profitability insights, fee breakdowns, and bulk product analysis, helping sellers make data-driven decisions.

Seller Assistant is an all-in-one product sourcing software offering all the features vital for product sourcing. It combines three extensions: Seller Assistant Extension, IP Alert, and VPN by Seller Assistant, tools: Price List Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View,  FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, and other features that help quickly find high-profit deals. Seller Assistant also offers integration with Zapier allowing to create custom product sourcing workflows.