Amazon has launched a new online store with handmade arts and crafts that competes directly with Etsy, the longtime market leader.
Just in time for the holidays, Amazon has launched a new online store with handmade arts and crafts that competes directly with Etsy, the longtime market leader.
Handmade at Amazon allows artisans to sell their handcrafted wares to the online retailer’s 285 million customers worldwide. It debuted Oct. 8 with a selection of more than 80,000 items from about 5,000 sellers in 60 countries.
The site is open to artisans who make jewelry, home décor products, party supplies, furniture and stationery, although the Seattle-based company says it plans to expand to other categories. Crafters must apply to sell on the site and create an artisan profile to share their story and showcase their work.
“Knowing an item has a unique story behind it creates a personal experience that customers have told us makes owning handmade items special,’’ said Peter Faricy, vice president for Amazon Marketplace, in a press release announcing the store.
All products sold on the site must be made entirely by hand and not mass-produced or resold. Sellers can’t have more than 20 employees or be part of a collective with more than 100 people.
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As part of the initial launch, Amazon is charging no listing fee but taking 12% of sales, which covers payment processing, marketing and fraud protection. Artisans can choose to ship their products to Amazon’s fulfillment centers for distribution, making the items eligible for expedited shipping for Amazon Prime members who pay the annual fee.
Handmade by Amazon takes a direct aim at Etsy, the go-to website for unique, quirky crafts and other merchandise. Etsy charges sellers significantly less than Amazon – 20 cents per listed item and 3.5% of sales – but its customer reach is considerably smaller, fueling speculation about its ability to compete long term.
Since its founding in 2005, Etsy has grown to $2 billion a year in sales, proving the buying power of one-of-a-kind, specialty goods. While its revenues have remained strong, mounting costs and changes to its vendor rules allowing sellers to outsource some manufacturing work have caused angst among some investors and sellers. Etsy’s share price has dropped to half of the peak it achieved after the company’s highly publicized initial public offering in April.
By contrast, Amazon hit sales of nearly $90 billion last year and, despite concerns about low profitability, its share price has soared this year.
While many sellers are thrilled by the exposure Amazon can bring their products, some are concerned about the higher costs and increased workload of having to list products on both sites. Just the enormity of Amazon seems to go against the whole idea of handmade.
Time will tell if shoppers who look to Amazon for their everyday shopping needs will also look to the site for handmade goods.
