During a recent coaching call, a student excitedly shared their product research. A small kitchen gadget with only 6 sellers. The top seller was doing 10 units a day with 30 reviews. Over 6 months, they hadn’t grown. Classic “low competition opportunity,” right?
Wrong. The market wasn’t growing because it was too niche. To scale beyond 10 units a day, sellers need to create demand. This means:
- Targeting broad kitchen accessories keywords ($3.40 CPC)
- Fighting with related kitchen tools for visibility
- Educating customers who aren’t looking for your product
- Lower conversion rates on these broad terms (5-6%)
- Spending more to make less
The “low competition” is actually a money pit because scaling requires chasing customers who aren’t actively searching for your product.
High Competition Can Mean Higher Profits
Let’s look at another student’s launch in the “saturated” home organization niche. Yes, 50+ competitors. But check these numbers:
- Main keyword: $0.85 per click
- 15% conversion rate (people know what they want)
- Cost to get a sale: $5.67
- Clear purchase intent keywords
- No need to “create” demand – it’s already there
On a $25 product, that leaves real profit even after Amazon fees and product costs.
The Hidden Costs of Creating Demand
Here’s what gurus don’t tell you about those “untapped” niches:
- Forced expansion beyond core keywords
- Customer education costs (expensive and slow)
- Lower conversion rates on broader terms
- Longer path to purchase
- Higher marketing costs for smaller returns
A Real Example: A Kitchen Gadget vs Home Organization Product
Breaking down two launches from recent coaching calls (numbers adjusted but proportions real):
- Low competition niche DOES have good metrics: $0.85 CPC, 15% conversion… but only 10 sales a day total
- The problem isn’t the metrics – it’s that there’s no room to grow. When your top competitor only does 10 sales a day after 6 months, that’s not opportunity – that’s the ceiling
- To grow beyond that tiny market, you’re forced into broad terms like “kitchen accessories” where CPCs jump to $3.40 and conversion tanks to 6%
- Better to compete in a bigger market where you can grow naturally than a small one where you have to create demand that isn’t there
That’s it. Good metrics in a tiny market are still a trap – the money just isn’t there. Stop chasing “low competition” and start chasing markets with enough demand to actually build a business.
What Actually Matters
Stop counting competitors. Start analyzing:
- Natural market demand
- Growth potential within core keywords
- Clear purchase intent in search terms
- Unit economics when scaling
Bottom Line
It’s better to be the 50th seller in a growing market than stuck in a niche that forces demand creation. Next time you research products, look at whether the top sellers are growing. If they’re stuck at low sales despite being there for months, that’s not “opportunity” – it’s a warning.
Your success on Amazon in 2025 depends on finding real demand, not lack of competition. Make sure your market has room to grow before getting excited about being “first” to a niche.
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