Etsy stock continued its decline in November dropping another 14.6% according to S&P Capital IQ data.

Can Amazon Handmade Actually Kill EtsyThe company began shedding value in early October when online retail giant Amazon Handmade launched a marketplace for handmade goods which competes with Etsy.

Despite the threat, Etsy is putting up a fearless fight against Handmade Amazon, with transactions across its platform rising 21.7% year over year.

The Brooklyn-based company has been cultivating its marketplace dynamics for the last 10 years and has roughly 1.6 million active sellers.

But can Handmade at Amazon actually kill Etsy? It depends.

Let’s look at their benefits first:

Etsy Benefits

Etsy has been at this game far longer than Amazon, and it’s entirely possible that Amazon doesn’t know it’s bitten off more than it can chew.

The most important thing is whether the sellers drifting from Etsy to test the waters at Amazon see any overall improvements to their brand reach, traffic, and sales. If they don’t, they won’t bother hanging around Amazon for long.

Look at their benefits:

  1. Can set up a collective store with other crafters
  2. Buyers can request commissioned work
  3. Easy to list custom and other one-of-a-kind items
  4. Popular site among craft artists and customers
  5. Ability to create custom orders
  6. Not competing with non-craft listings
  7. Access to resources and community centered around making and selling crafts
  8. The stability and “friendliness” of Etsy’s marketplace is something that many handmade sellers have come to rely on and expect.

However, this is not to imply they’ll stay exclusive to Etsy (history tells us they won’t–they’re constantly on the lookout for the magic bullet that Etsy has never provided).

Amazon Benefits

Amazon’s two biggest “pull” factors for sellers emigrating from Etsy are its strict enforcement of only selling truly handmade goods (something that Etsy, for all practical purposes, stopped enforcing in mid-2013), and a perceived decline in the quality of seller relations on Etsy’s part.

However, Etsy has already suspended 168,000 Etsy Accounts in 2014.

There are however other benefits to selling on Amazon that make it competitive with Etsy, such as:

  1. Charges a lower sales commission than Etsy
  2. Ability to host amazon store on your own website
  3. No listing fee to sell as an individual (Etsy charges 20 cents per quantity)
  4. You can sell unrelated items from the same store as an individual, such as books
  5. If anything, Amazon has a reputation for being extremely unfriendly to its merchants.

Amazon’s chances of surviving the next 3-5 years are extremely good.

The thing is, Amazon Handmade doesn’t even really have to succeed in order to kill Etsy. It could be wholly ephemeral.

The other option for Etsy is to return to a business model more similar to its pre-2013 approach, where sellers are strictly vetted before market entry, but gently cared for thereafter.

It’s incredibly hard to imagine how Etsy might begin to roll back some of the changes that alienated sellers, but it’s clear that without the loyalty of sellers, Etsy’s marketplace is not likely to survive.

Whether Amazon is what kills Etsy, or Etsy’s own haphazard strategic planning, remains to be seen.

How about you? Have you tried Amazon Handmade? Do you think it’s a better platform than Etsy?

Let us know in the comment box below.

Gary Capps

I live in the one of the most beautiful places in the world on the Sunshine Coast in Australia with my wife and our 2 dogs, Poppy and Mia. Since 2009 I have helped over 15,000 handmade business owners to grow their business with our software and free tools designed for todays entrepreneurial artisan.

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3 Responses to “Can Amazon Handmade Actually Kill Etsy?”

  1. Prairie Primitives 04. Jan, 2016 at 8:22 pm #

    * Multiple sellers can set up a collective on Etsy BUT one person’s name is still on the account so the income will appear as THEIR income. Etsy accounts can’t be in the name of a partnership or LLC, etc.

    * Your points #2 and #5 are essentially the same thing.

    * Etsy has always allowed craft supplies & vintage items to be sold there, along with handmade items. And for the last few years there have been more than a few “import” items being sold there as “handmade” … when we all know they’re “handmade in a factory.”

    * Charges considerably MORE than Etsy! Right now, [email protected] fees are 12% of the selling price. As of August 2016, that percentage will increase to the percentage for that category on “regular” Amazon PLUS there will be a $39.99/month fee. Hardly cheaper!

    * How do I host an Amazon store on my own web site? Can that be done with [email protected]?

    * There’s no listing fee for NOW. As of August 2016, there will be a $39.99 month fee for [email protected] sellers. Technically not a listing fee, but still a mandatory fee.

    * * *
    I have sold on Etsy for 9.5 years and on [email protected] since it launched in October 2015. Sales are still MUCH better on Etsy, but I plan to stay with [email protected] at least until the monthly fee takes effect.

  2. Sandra 04. Jan, 2016 at 4:37 pm #

    Amazon won’t kill Etsy. At least not until they figure how better to sell handmade. When you sell on Amazon, your customers are Amazon customers. There’s zero personal connection. Amazon also rates every single interaction, monitoring timeframes, etc. Etsy customers are the seller’s customers. Transactions outside of etsy are allowed, and for those making made to order items if more time is needed it is up to the seller to communicate with the buyer, thus allowing sellers the ability to manage their business while still balancing a life outside of their business. Amazon also holds funds if your store performs better than expected, this can be thousands of dollars held up for “review” which can take an inordinate time to release to the seller making it difficult for some to purchase much needed supplies and packaging. I was accepted and never opened a shop but have been monitoring the first round of sellers via a group on Facebook for Amazon handmade sellers. So far I’m turned off by Amazon. Oh, and the fees change in a few months. Jewelry category fees go up to 20% with $49.95 monthly fee (or something close to that) so no, the fees are not better on Amazon unless you’re selling a product with a high markup that is quick to manufacture.

  3. Jules Marriner 22. Dec, 2015 at 12:51 pm #

    Have tried [email protected] this Xmas season as a seller & have sold nothing. Didn’t like the site, thought it was hard to navigate and felt unfriendly. Have had a shop with Etsy since 2008 and prefer it by miles. Hope Amazon don’t kill Etsy.

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