If there's one thing that the most successful online sellers have in common, it's that they've found a way to generate healthy profit margins. If you own an online store, then your profit margin, aka "net profit margin," is how much money you make selling products after factoring in business expenses like sourcing costs and shipping costs.
Imagine, for example, that you were a veterinarian or dog groomer who developed your own brand of dog shampoo that was better than anything currently on the market. So, you decide to cash in by opening an online store that sells pet care supplies to dog lovers worldwide.
In an effort to offer your product for a low cost, you decide to sell each bottle for a retail price of $10. As the orders pour in, things appear to be going great until you realize you've overlooked the fact that each bottle costs around $9 to create and deliver.
Unfortunately, this leaves you with a net margin of just one dollar for each bottle, which isn't a good profit margin. In order to justify spending the time and energy it takes to run an ecommerce store, you'd be forced to boost your price to cover your product costs.
If you've yet to launch your online business, then a surefire way to avoid this situation is to choose high profit margin products to sell online and offer them at appropriate price points. Read on to discover what exactly high-margin products are and how to find them.
High profit margin products are items that you can sell for more money than you spent on sourcing costs.
In order to build and maintain a high profit margin business, it's important to factor in all the costs that go into buying the goods you plan to sell in your online store. Costs such as raw materials, product production, shipping, packaging, and even marketing are all notorious for cutting into the average margin profits of most retailers.
Print on demand offers online retailers a unique, predictable approach to generating steady profit margins.
High profit margin products should have relatively low production costs without sacrificing quality. They should also be in demand and have a unique selling point that makes them stand out from the competition.
A high profit margin product is a product that you can sell for more money than it takes to create, ship, and promote. The key is to find high-quality items that you can acquire for a relatively low cost, customize in some way, and then sell online for a higher price than you paid for them.
When calculating the average profit margin you expect to bring in, it's also important to account for things like your marketing budget and any ecommerce business platform expenses. High profit margin products tend to share several traits, such as:
High-demand products: In order to generate high profit margins, you'll want to focus on products from a hot market. This doesn't necessarily mean you have to sell the world's sexiest products, just that there should be a significant demand for the type of products you choose to sell.
For some online sellers, this could mean selling fashion accessories and beauty products, while others might prefer to sell phone accessories or fitness equipment. The key is to make sure you sell products that will appeal to a large number of customers.
Unique selling point (USP): Finding the USP of each of your products will come down to answering why your target customer should buy it from you rather than another online seller. For a great example, check out this foldable yoga mat from a small fitness equipment brand called Stakt.
After noticing the pitfalls of traditional yoga mats, Stakt's co-founders decided to start selling fitness equipment of their own to fill a gap within their specific niche. While more expensive than the average yoga mat, the Stakt mat has the USP of being the first foldable yoga mat of its kind, which makes it usable for a wider range of exercises.
Low production cost: While higher margins are the goal of every successful ecommerce store, skimping on quality will do your online business no favors. Even if you offer the most popular products on the market, bad reviews are all it takes to sink an ecommerce store very quickly.
So how do you establish and maintain a high profit margin without cutting corners? Partnering with a reliable print on demand company has become a popular ecommerce business solution for many online retailers.
Print on demand suppliers like Gelato are designed to decrease the time and expense that goes into selling products online. By utilizing a print on demand business model, you can keep things like production costs, printing expenses, shipping costs, and more from cutting into your profit margin.
Online retailers can choose which of our high-margin products they'd like to feature their designs on. They then integrate Gelato into their online stores and wait until a customer makes a purchase.
At that point, Gelato will create the product using the specified design and deliver it straight to the customer. The online seller simply reimburses Gelato for the pre-specified price of each item and its shipping cost from a portion of the sale's proceeds.
By factoring these costs into their pricing upfront, online store owners will know exactly how much they need to charge to make a profit from each sale. This is an easy way to ensure you'll never pay for any item that hasn't already sold and prevent unsold inventory from cutting into your profit margin
A little market research can go a long way when it comes to finding the best high profit margin merchandise to sell online. Here are some useful tools that can help you find out what's trending among your target audience.
Google Trends is a great free tool that offers an inside peek at the most searched-for topics on Google. You can customize your search to show the top trending products and subjects over the past few years, months, or even hours.
This is an awesome way to spot products or topics that may appeal to your niche market. You can then take those ideas and turn them into high profit products to sell online.
When it comes to online retail, competitor analysis can be an invaluable market research tool. Get familiar with other ecommerce merchants that cater to your target market and visit their sites periodically to check out their most popular products.
Not only can this give you a good idea of what's trending among your target audience, but it can also provide valuable clues to the average selling price of products similar to your own. It can also be a great way to spot any gaps in the market.
Coming up with an idea for a high-margin product that no one else is selling yet is a great way to make your online store stand out. If you want to go all in, there are even professional tools like SimilarWeb and SemRush that can give you valuable insights into rival stores.
Social media is a goldmine when it comes to generating ideas for high profit margin products. The key is to follow as many other online stores in your niche as you can find.
If you sell beauty products, follow everyone from high-end suppliers to other independent retailers. While the goal isn't to reproduce the same products exactly, you can generate plenty of ideas by tracking which beauty products are trending, and the average price customers are willing to pay for them.
Now that we've covered the basics, let's look at several products that can lead to nice profit margins. Whether you choose to focus on one or select items from multiple categories, each of these high-margin products is a great bet for your ecommerce business.
In 2021, the global online fashion market was worth $700 billion and is expected to grow to $1.2 trillion by 2025. Clothes are a high-demand product that will never go out of style and they can be created and sold for a relatively low cost.
Imagine, for example, that you created a cool design that you wanted to feature on a Unisex t-shirt. If you were partnering with Gelato, you'd factor in the following production costs:
Total overhead: $13.50
In order to increase your profit margin, you could offer each shirt for the retail price of $20.00. That'd leave you with a healthy average profit margin of 32.50%.
Gelato offers plenty of different apparel products to choose from, including:
As any parent can tell you, kids and babies are always in need of new clothes, which is part of what can make selling them a great choice for your ecommerce store. The children's apparel market is expected to account for $267.50 billion in 2023 alone, with a projected annual growth of 2.46%.
Children's clothes tend to be relatively inexpensive to create, not to mention cheap to ship, due to their light weight. Your shop could cater to personalized gifts for babies, kids' t-shirts featuring funny sayings, or anything in between.
Be sure to offer an assortment of different products to ensure you can keep selling all year round. Here are some great examples of some of the many products you can start selling today:
There's a good reason you'll find accessories offered in so many ecommerce stores. They tend to have very low sourcing costs, which can lead to a nice average margin of return.
Take tote bags, for instance. In recent years, stores in many US states have begun charging consumers for plastic shopping bags in order to encourage more eco-friendly shopping habits.
Many states are even considering outlawing single-use bags, which could soon make the tote bag an even more profitable product than ever before. When you partner with Gelato, you can offer your custom designs on high-quality tote bags from sustainably produced raw materials.
You can even let your customers know that we use over 130 local production sites to help cut down on carbon emissions. With delivery available to 14 different countries, you can enjoy high profit margins while making the world a more sustainable place.
As the world continues to realize the many environmental and health benefits of sustainability, the reusable water bottle is becoming an increasingly high-margin product. As opposed to single-use plastic bottles, a good stainless steel water bottle or travel mug can last over a decade.
With bottled water prices rising, long-lasting drinkware is a low-cost investment that can save your customers a great deal of money in the long run. Given how long a reusable water bottle can last, many customers are willing to pay higher retail prices for custom options that reflect their personality or style.
You'll quickly discover that the drinkware niche is full of plenty of high-margin products. Consider adding custom-designed coffee mugs, latte mugs, and lightweight enamel mugs to your online offerings.
The home decor sector is alive and well around the globe, presenting online sellers with plenty of chances to turn their designs into high profit margins. Offering your customers products like customized calendars or photo books can be a great way to boost your revenue.
But don't overlook the popularity of unique wall art, from posters to canvas or wood prints. Gone are the days when artists enjoyed their highest profit margins from the single sales of their best paintings.
Partnering with a print on demand company makes it possible to sell prints of your artwork to multiple customers, all without ever selling the original unless you choose. Another home decor niche that can lead to high profit margins is wallpaper design.
After the recent introduction of peel-and-stick wallpaper, the wallpaper industry has enjoyed a resurgence in popularity. There are now even plenty of great online courses that can teach you the art of wallpaper design right from your own laptop.
When you're ready to launch your wallpaper business, Gelato has got your back with plenty of great print on demand wallpaper options. Choose from peel-and-stick, PVC-free eco-friendly options, and more.
Did you know that the average American spends 270 minutes every day on a mobile device? It's not so hard to believe when you consider that we now depend on smartphones for access to everything from email and GPS systems to our daily calendars.
Given how much time we spend with our phones, it's no surprise that selling phone accessories can lead to a healthy average profit margin. Offering products like cell phone cases can be very profitable, especially if you offer unique designs that your customers can't get anywhere else.
Due to the vast number of different smartphone models on the market today, you could easily create an online store dedicated to phone accessories alone. Whether you choose to go all in on the niche or offer a select number of options, Gelato's got everything you need to make it happen.
We offer cell phone accessories for a wide number of both Apple and Samsung devices. You can also choose from a variety of different styles and materials.
Turning your designs into high margins largely comes down to featuring them on the right products. Remember, it's important to choose high-demand products that you can sell for a retail price that covers your overhead costs and still leave you with a profit.
Keep in mind that if you want to make the highest profit margins in the long run, it's essential that you don't try to cut corners by offering your customers low-quality products. Gelato's got you covered with a full range of high-margin products that you can depend on.
We've got a full range of print on demand merchandise just waiting to be transformed into profitable products for your online store. You supply the designs and we'll take care of the rest!