9 Highest Margin eCommerce Products of 2019
In 2018, 51% of all consumers started their research about a product on Amazon, compared to 49% starting on Google.
In 2019, 66% of consumers start their search for a new product on Amazon!
20% search for a new product on search engines like Google, 4% on brand websites, 4% on retailer websites, 3% on other marketplaces, and 1% on social media. (Statistica, 2019)
So let’s take a look at Amazon US before we dive into a global overview:
Amazon’s most significant sales categories of 2019 looked something like this:
- 40% sales in electronics
- 30% sales in clothes/apparel
- 11% Homeware/ Kitchen
- 9 % Beauty and Personal Care
- Etc.
You can see roughly 70% of Amazon’s total sales were concentrated in 2 categories: electronics and clothes. That is huge! No wonder these two categories are also some of the highest margin products of 2019!
"To gain profitable growth in today’s highly competitive blended environment, digital has the potential not only to influence but also to capture market share."
- Deloitte
So how does Amazon US Compare to the Sales across the Web?
Here is the PriceMole Countdown for Growing & Trending E-commerce Product Categories of 2019
# 9. Pet Supplies
15 - 30% markup
$140 billion in global sales in 2019 (so far)
"There are now more pet-owning households then there are those with children, some 84.6 million strong as compared with 52.8 million with kids, or 41.43%."
Pet Supplies have become more and more popular over the last 5 years, and continue to grow in popularity - especially in the largest online retail markets: North America. With 3% YOY growth the industry is steady and growing. This may not seem like a lot, but it is catching up to the total baby supply sales globally.
Interesting Facts:
- Dog Food makes up about 40% of all pet related sales, totaling in approx $91.1 billion
- Pet Insurance, according to the North American Pet Insurance Association reports the number of pet insurance policies sales grew more than 25% from 2016 to 2019
Top Retailers to keep your eye on:
Amazon, Petco, Petland, Walmart, etc.
If you want to learn more about the growing pet supply industry check out this great article on Forbes.
# 8. Baby Accessories
30-40 % markup
80 billion in global sales in 2019 (so far)
The sales for baby products continue to grow with about 6.5% YOY. Expected to hit 92.8 billion US$ in 2023 in global sales. But how will the trend continues with the ever growing pet industry and the lower level of birth rates in the largest eCommerce market in the world? Only time can tell .
Interesting Facts
Procter & Gamble (P&G) and Johnson & Johnson are the leading companies in the global baby care market, with over 18% of global market dominization each (cornering almost 40% of total sales) (Statistica, 2019)
Top Retailers to keep your eye on:
Amazon, Walmart, Procter & Gamble,Johnson & Johnson, etc.
#7. Personal Care Products
80 - 100% markup
$420 billion dollar industry
By 2021 the Skincare portion of personal care products is expected to produce 20 billion dollars in sales alone. This is the category to keep an eye on. This category appeals to both men and women equally.
By 2050, our life expectancy is expected to raise significantly (women from 82.8 years to 86.3; men from 78.4 to 83.6 years). This means the demand for anti aging and skin care products can only surge!
"Rapidly aging demographics have led to a robust demand for anti-aging products in order to prevent wrinkles, age spots, dry skin, uneven skin tone, and even hair damages, creating room for new innovations in cosmetics, thus boosting the industry growth."
- Reuters
Taking into consideration not only the increased life expectancy but also that consumers have been spending higher levels of disposable income on cosmetics, it can only mean the margins of personal health products will sky rocket!
Now that Generation Y has entered the job market, they have become a big driver of the cosmetics market; especially in the United States!
Interesting facts:
- Leading beauty manufacturer worldwide is L'Oreal - (Statistica, 2019)
- Skincare was the leading category, accounting for about 36 percent of the global market.
- Hair care products made up a further 23 percent, while make-up accounted for 18.2 percent in 2016.
- Natural and Cruelty Free Products are trending and will most likely become the dominating products on the market
Top Retailers to keep your eye on:
L'Oreal, Unilever, Shisheido, Estee Lauder,Procter & Gamble, Beiersdorf, Johnson & Johnson, etc.
#6. Jewelry
100% markup
286 billion dollar industry
When it comes to Jewelry, the category is so vast, that it’s hard to start. You will see trends come and go, but one thing remains, humans love to accessorize. In today’s market retailers need to pay close attention to trends and can make a bundle. But due to social media, success can come and go much faster than it used to.
"Jewelry is like ice cream, there is always room for more."
- Stevie Wren, Jewelry designer
Technology advancements are rapidly changing the industry. New e-commerce platforms to start your own store, cloud solutions, easier ways to discover valuable gemstones, computer-aided design, 3D printing, augmented reality and so on. Everyone has the potential to become a player in the market, because the technology is out there, available to anyone.
As mentioned previously, not only jewelry retailers make profits. Smart players in the market like drop shippers add small boxes, cards/notes, gift wrap and markup jewelry sales up to 200%, often even buying replicas at wholesale prices. Sometimes you will find the exact same product on another site for less than half the price depending on their sales strategy.
Currently trending in 2019:
Interesting facts:
- Diamonds make up 41 percent of retail jewelry sales
- Branded items already account for 60 percent of sales in the watch market. - McKinsey & Company Research
Top Retailers to keep an eye on:
Pandora, Tiffany & Co., Richemont (Cartier),Swarovski, etc.
#5. Furniture
80-200% markup
$600 billion dollar industry
Many stores advertise sale prices at 50% off MSRP, but when you take a closer look at their costs, or even of their price history, you will find they never sold at MSRP, they are most likely dropping their price by 5 to 10%.
Because the furniture industry
In recent years, furniture dealers have popularized the idea of selling furniture on financing plans, allowing you to pay even more than the sticker price at their benefit.
No wonder that the furniture market size is estimated to surpass 750 billion USD by 2024, according to Global Market Insights.
The Dragon chair with a $28 Million Dollar price tag is the most expensive piece of furniture sold to date(2007, Huffpost)
Interesting facts:
- More than 1 in every 4 shoppers bought furniture online this year and 4 in every 10 people plan to buy furniture within the next 12 months
- "You spend about 33% of your total lifespan in bed. Why not invest in a good one?" - Furniture Salesmen everywhere
Top retailers to keep an eye on:
Inter, IKEA, Ashley Furniture Industries Inc., Wayfair, Costco, etc.
#4. Electronic Accessories for Mobile Phones and TV
100 - 700% Markup
$528 billion Industry
Low cost items and high volume sales drove the electronics industry in the early days. Lowering prices on products kept growth going was offset by enormous markups for accessories.
The Top selling electronic accessories of Amazon in 2019 included:
- Apple AirPods,
- Iphone Glass Screen Protectors,
- Rechargeable AA and
- AAA Batteries,
- iPhone Lightning Cables,
- Iphone Headphone Jack Adapter,
- HDMI Cable
- 9 Volt Batteries
- 32 GB micro Memory Card
- Wireless charging station
The smartphone accessory industry is expected to grow to $108 Billion by 2022. Phone Chargers are often marked up 672%. Designer Phone Cases and Laptop bags have made even bigger profits. Key players focus on expanding their business operations in emerging countries, with new product launches as a preferred strategy.
Interesting Facts:
5.5 Billion people with mobile devices worldwide, – This means that 66.53% of the world's population has a mobile device. Compare that to 5.4 Billion people have a bank account and 5.3 billion people have running water, for perspective.
Top competitors to keep an eye on:
Amazon, Walmart, Apple, Target, eBay, etc.
#3. Health Products & Dietary Supplements
350% average markup
$127 Billion Dollar Industry
"The vitamins segment usually dominates the global market, in terms of revenue."
The dietary supplements market is anticipated to reach over 349.4 billion dollars by 2026.
Yet other health and diet branded products on the market are gaining traction. Globally, people have become obsessed with being healthy or losing weight. This is also why Shapewear seems to still be one of the highest margin and most popular products. Currently, along with Vitamin Tablets, and Appetite Suppressants, things like Protein Powder, Collagen Powder, Keto Tablets, Matcha Powder, etc. are contributing to the ever growing industry.
As seen in the graphs below from Google Trends, across various continents, the trend persists over the last 5 years:
Interesting facts:
- Over the counter dietary supplements held the leading market share of over 75% in terms of revenue in 2019
- Dietary supplementary sales for children are expected to rise during the next 5-10 years. Especially Chinese parents are willing to spend large amounts of money on the health of their children in relation to family income.
Top retailers to keep an eye on:
Amazon, GNC, Vitamin Shoppe, Vitamin World, Holland & Barrett, etc.
#2. Fashion
40-2000%
40-80P% markup average on retail clothes
400-2000% markup on Luxury Brands
$589 Billion Industry
The term fashion in this research includes retail fashion, luxury/designer items, athleisure and shapewear.
As outlined in the highest margin products of 2018, looking good comes with a price, and this hasn't changed. Based on Shopify’s The Fashion and Apparel Industry Report worldwide fashion revenue is expected to rise from $481.2 billion in 2018 to $712.9 billion by 2022.
Between 2017 and 2022, annual growth rate is expected to settle in at 8.8% in the US vs. 15.8 in 2018, which indicates a rapid shrinkage. Retail fashion has seen similar shrinking numbers, as have bags and accessories, although they are still projected to be the strongest sales category in 2022 at about 9% YOY growth.
The Athleisure trend and market sales are growing strong due to increased involvement of developing nations in sports and fitness. As mentioned above, an increase in disposable income has also helped athleisure brand sales. Athleisure includes joggers, leggings, sneakers, hoodies, etc. Companies use high-end performance enhancing to promote enhanced performance abilities, which allows them to markup the items even more (although often there is little to no research to support these claims).
Top Brands include: Lululemon, Under Armour, Nike, Adidas, H&M, etc.
Shapewear sales are growing in popularity and proving they are not just a fad. Shapewear is worn underneath a woman’s clothing to help create a more slimming look. On AliExpress, shapewear products have received thousands of orders. It is a very popular search term in Sri Lanka, the Philippines, Ghana, and Tanzania. Top Brands include: ASOS, Victoria’s Secret, Zara, and QVC, etc.
Some aspects of the fashion industry are struggling though, and we should keep our eye on the over the next decade:
- Brand loyalty is no longer expected due to market fragmentation
- Return rates from online shoppers are as high as 50%, and come at a high cost to the brand
- This generation brings lots of pressure to use ethically sourced and green manufacturing materials
Top retailers to keep an eye on:
L Brands, GAP, Fast Retailing, H&M, Inditex, etc.
Top Luxury Designers:
Chanel, Hermes, Gucci, Tiffany & Co., Dior, Burberry, Prada, etc.#1. Eyewear
800 -1000% Markup
$210 Billion Industry
Last year we included eyewear under the category of fashion, but since then we believe it deserves a category of its own!
About 80% of people would be eligible to wear a form of corrective eyewear for Hypomiopia, Hyperopia or Astigmatism. The remaining 20% would be eligible for eyewear purchases as well, by way of Sunglasses.
Eyewear Retail is heavily centered in North America, as many countries around the world have yet to expand into this market space. Eyewear Retail is a very difficult industry to break into, due to restrictions and required licenses, along with retail giants like Luxottica who have had market dominance for decades. The high cost of frames reflects a market that is woefully lacking in meaningful competition.
Yet there is an opportunity that new players are taking advantage of:
In a study conducted at UCLA, you can see how Luxottica compares to Warby Parker, an eyewear company who found success by manufacturing frames in house and therefore avoiding licensing fees, by pooling inventory to lower holding costs and manufacturing markups and having the ability to work directly with their distributors.
Interesting Facts:
- When you Google, what are the largest eyewear retailers in the world, you will find the following list: Ray-Ban, Essilor, Persol, Oakley, LensCrafters, OPSM, Sunglass Hut, Apex by Sunglasshut, Eyemed, Pearle Vision, Sears Optical, Glasses.com, OneSight, Target Optical. They are all owned by Luxottica.
- All of the top luxury fashion designers mentioned above in #2 also make designer eyewear frames; My little fortune was invested in a pair of Tiffany’s.
Top Retailers to keep an eye on:
Luxottica, Pair Eyewear, The TJX Companies, Warby Parker, Vera Bradley, etc.
Considering these as the top 9 highest margin products of 2019, still leaves room for some interesting notes that were not included:
- Bottled water in some grocery store chains can be marked up by 4000%. But it is not in the list because it depends on the "type" of water, packaging etc.
- You will often hear that subscription boxes are extremely profitable. But profit margins are very thin and success is only seen with large amounts of sales.
- Vaping Products was in our list of highest margin products of 2018. Vaping Products still remain profitable but have lost the higher margins due to a shrinkage in popularity - greatly to rumours and recent findings on some variations of products that can cause health issues
- Dark Note: Funeral Home services are marked up 300-600% because there are few options out there, and when the time comes, someone needs to plan and host this event, there is no way around it.
All Products start from nothing and develop into a stable market that lasts the test of time. They never actually go out of style because consumer demand continues to build over time. Growing markets can last for decades. A best example? The Smartphone. At first, no one knew what it was or why we would need one. Now, can you imagine life without one?
So Now, What are the next steps for your retail store?
- Research ideas in Google Trends to find popular high margin products to sell
- Find market data to see if the industry sales are growing with helpful tools like Google, PriceMole, SEMrush, etc.
- Narrow down to product categories using Google search volume
- Research blogs and influencers to find passion topics like on LinkedIn, Medium, Facebook, Twitter or Business Insider
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