Amazon vs. Etsy – Who Will Win?

by Carolyn Edlund

Amazon is launching a new “Handmade” marketplace to compete against Etsy, which went public in mid-April.

Amazon v Etsy

Although it’s too early to tell which way things will fall, events are happening at a rapid pace that may affect the outcome of this upcoming rivalry.

  • Etsy sellers have bemoaned the retail giant’s practice of allowing mass-produced merchandise from China to compete with the handmade-only merchandise on the once-purist site.
  • Investors have filed lawsuits against Etsy, alleging that millions of items sold through the site may violate copyrights or trademarks from brands such as Disney, the NFL, Chanel, and others.
  • Although the IPO just launched weeks ago, the stock price has plunged almost 25% due to these concerns.

Amazon is a retail monster, even compared to multi-billion dollar Etsy, and has already gotten into the business of art sales through its Fine Art category.  Now they are headed into the handmade arena. They are reportedly wooing selected Etsy sellers with an offer and an attempt to migrate them over to Amazon’s new marketplace.

Although it’s been voiced that sellers may reject the 15% commission rate Amazon plans to charge versus the much smaller commission + listing fees on Etsy, I tend to disagree. I’ve spent the past couple of years compiling the internet’s largest directory of places to sell art and craft online, and 15% is on the lower end of the range of commissions charged. Plus, there seems to be no upfront listing fees – which means that if you don’t sell, you pay nothing (this is a trend among online marketplaces that seems here to stay.)

In my opinion, it’s going to be an emotional decision for the thousands of Etsy sellers who will be making up their minds whether or not to move over to Amazon. How mad are they that Etsy has made sweeping changes in their policies and that they are competing with mass-produced goods for sale? How frustrated are they that they spend hours working on their listings in an attempt to get found on the massive site? Will they actually be relieved to find an alternative that may offer greener pastures? Or do they have a sense of loyalty to the site that will win out?

On the other hand, Amazon will have to handle this launch carefully. If they promote a “handmade only” message and police knock offs and mass-produced goods aggressively, they might prevail. If they keep integrity at the top of their list and offer lots of benefits for artists and makers, they have a good chance. Plus, with their enormous marketing capacity, Amazon has the ability to be just about everywhere. And that might just appeal to a lot of small creative entrepreneurs who want to cash in on a shiny bright new opportunity.

Are you an Etsy vendor? What do you think – would you switch, or stick?

 

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Comments

  1. I don’t think it’ll be a matter of “either/or”. I think current Etsy sellers will try Amazon out and see how it goes. 15% is a lot less than the current 30%, for outside sellers, Amazon charges – so that will entice a lot of people who were interested in selling on the site before. I wonder what types of proof they are going to require of sellers, to make sure everything is handmade or copyright compliant. It’ll have to be more stringent than Etsy’s current policy – or they’ll be in the same situation. Another venue for art sellers, is never a bad thing. 🙂

    • I would agree with you on that, Sue. Choice is never a bad thing, and sellers will go where they feel they get the best service and result. Amazon has their work cut out for them to enforce policies for the good of artists and makers.

  2. I would consider giving them a try…15% isn’t unreasonable. (Galleries charge far more!) I don’t think I’d move everything over there, at least not at the start. Would probably maintain an equal presence at both spots…assuming I got accepted at Amazon.

    • MJ, have you received an invitation? Apparently Amazon is sending emails to selected Etsy sellers which leads to a questionnaire. Perhaps they are polling to find out how to make the best possible marketplace.

  3. I really appreciate seeing your comments posted here, Caroline. I would switch.
    Waiting to see how it evolves. I have had a good run on Etsy. Thanks.

    Judy

  4. Great article and I agree that more choices is better for buyers and for sellers. I’ve been with Etsy going on 7 years now and like many on the site, was very dismayed when the reseller and manufactured things began to truly overwhelm the handmade. I continue to hope that Etsy will find a way to clean this up, especially now that the eyes of the public are there more than before with the IPO….but if Amazon does a better job in presenting handmade, I’m guessing many sellers on Etsy will give it a close look and even a try….

    • I tend to agree with you Karen, and have heard many of the same complaints from Etsy sellers. It seems they have made a decision of what they want to sell, and as you stated the resellers and manufactured goods overwhelm the handmade.

  5. Oh wow, I had not heard this news before!! I use to do very well on Etsy but sales have been really sluggish the last few years. It’s definitely not the same as when I started years ago. So, I am going to check it out and switch if it looks good! Thanks for the info Carolyn!!!

  6. I am wondering if I just read things wrong in an earlier article, but I thought I saw that the Amazon Marketplace would cost a seller $34.99/month in addition to the 15% commission. I can’t really see that Amazon will be any better than Etsy in the long run – it will end up being large and difficult for customers to find you just as it is with Etsy. As far as the Chinese companies and those that knock off Disney etc., as a customer, it isn’t too hard to see which companies are doing this, and those people aren’t handmade customers anyway. It will be interesting to see how all this turns out!

    • Hi Julie, interesting info about the $34.99 per month. I had not heard that.

      I disagree with you that the handmade sellers aren’t knocking off Disney and others – I’ve seen it myself. Items painted with team logos, and characters on are rampant (here are two examples, found easily: https://www.etsy.com/listing/232102579/mickey-piggy-bank-hand-painted and https://www.etsy.com/listing/214812272/superbowl-2015-ooak-handcrafted)

      Regardless, the internet is still “the wild west” to a large degree, and it remains to be seen whether Amazon can improve on the seller experience!

    • Actually it’s more – to have an Amazon Handmade account, you will have to pay for a Pro Seller Account, which is $39.99/month.
      Sounds like for new sellers they are going to waive that for the first year and charge 12% instead of 15, but after August 2016, you have to pay the monthly fee and the higher commission.

      I’ve sold books and things here and there on amazon for years, but have always opted out of the Pro Seller account and paid higher commissions, because I simply don’t sell enough to justify the monthly fee. The commissions are high, and the company so far is not very seller friendly. There is a lot more traffic on the site, but I will be curious to see if that outweighs the higher commissions and monthly fees.

      On Etsy last year, our total fees for listings and sales were about 8% of our sales. It makes me a little nervous to double that on Amazon, PLUS pay the $40/month fee no matter how many or few sales we get. If our sales went up by 50% or more, it’d be worth it, but I too have concerns it will be too big and have too much competition.

      • Thanks for that update, Lucy. It will be interesting to see whether vendors end up going this direction, or if they feel Etsy is more friendly to sellers.

  7. Hi Carolyn, just thought I’d let you know…Amazon said they have a limited space for new sellers right now, but you can leave your information with them and they said if they expand their site they will contact you.

  8. Looking for a link to that specific seller program in Amazon. Carolyn, do you have one?

    • Gwen, I do not have a specific link to the seller program. Currently as I understand it is by email invitation only.

      • There is no program yet. We received an email basically saying they are in research mode is the way I read it. ”
        We promise to share more information with you soon, and when we’re ready to accept applications, you’ll be among the first to know!”
        Barbara

  9. I am just reading the thestreet.com’s article on it. Well, it will all depend on the charges that the seller will have to incur. If they do just a flat 15% then that would be okay, but to add a per month charge on top of that would really limit many from jumping over from Etsy. If Amazon does not charge a monthly fee and would just take 15% then I would be in. Why not? It’s a huge marketplace and since their fine art section actively prohibits individual artists from selling their work (the last time I looked into that you had to be fine art gallery representing at least three different artists) then yes, I’d look into it. Not crazy about either of them, Etsy nor Amazon but, there you go.

  10. Hmmm…. Interesting… I’ve seen so many panic buttons concerning Etsy over the years. Zibbet got a lot of hype for a while, but I don’t think they have the business savvy to take it to the level it needs to go. I was a part of 1,000 Markets, which I thought had a great platform and I was very hopeful about it, but then their quality went down and eventually they sold out to … (forgot the name now). If I remember correctly, we had to set up an account through Amazon for payments and we didn’t get paid right away. I hated that and that we couldn’t take PayPal payments. If it is still like that, it will put a lot of people off, especially after having direct control over payments and shipping.

    My gut is that Amazon is too big and commercial. There was talk for a while that Google was going to set up some kind of handmade competition against Etsy, but then I heard no more about it. Etsy finally has great tools and people can still carve a niche in there like we have done with Artizan Made (www.artizanmade.com). I think that the solution would be to see an effective tool where people could band together like we have and create their own “chambers”, independent of whatever platform they were using. We have been using something that is “almost” there, http://www.merchpin.com, which has a stroke of genius to it, but unfortunately, the developer doesn’t seem to be maintaining it and it has glitches and limitations that make it an unreliable choice. The idea would be that any shopping cart system could be pulled into a large database of products and then you can create features with curated products that link directly to that member’s cart. I envision similar types banding together to create larger sites that attract a common following. For example, an artsy neighborhood in a big city could create a shopping site that includes all of the boutiques, restaurants, book shops, etc. that are located in that neighborhood, so long as they all had online cart systems.

    With Artizan Made, we have focused on eco-fashion and home decor and we have around 60 participating shops. Three of them are no longer on Etsy and have gone to big commerce or big cartel. When we started this over a year ago, I thought 100 shops would be a good number to have, but have found that the upkeep on the back end and manual marketing is just too time consuming. But, I would still love to see the concept replicated. Artsy Shark, for example, could have its own shopping mall. I think that smaller groups have more success at being seen once they can get out there and have a large enough following. We are still not there, but our traffic is growing and I think that eventually it will show good results for our members. It doesn’t really matter where you are, in terms of being found. The internet, Etsy, Amazon and all of these other giant places are competitive and it’s a nightmare trying to keep up with what they and Google need in order to show up on search results. Every shop owner still has to invest in marketing and I just think that it’s easier to do with a like-minded group that really likes what the rest of the group is doing and shows support.

    There are other models out there who are extremely successful at promoting fine handmade work, like Artful Home and Mobilia Gallery. Curation is a huge deal and having a limited group that makes sense will eventually attract the right patrons. This was Etsy’s flaw from the beginning. If they had had some kind of vetting process, they could have weeded out a lot of crap that is out there. A simple way of doing that is to have an application or joining fee. It serves as a deterrent for anyone who is not serious about investing in a place and then those who are, are usually more seasoned and have higher quality products. It sounds like Amazon is screening their first shops which will help set a precedent, but then, if they open it up to anyone who wants to set up shop, they will have the same crappy products that are now flooding the market everywhere else.

    We’ll see what happens. My preference is to see people set up their own cart systems on their own sites so that they can’t be shut down by Etsy or another platform who might not understand what they are doing. Several fair traders that I have worked with were shut down with no warning by Etsy, some were reopened while others gave up trying to communicate with an exhausting system. The problem with having your own site is that shoppers might not have the confidence to buy from a small seller. That’s where creating community and forming an umbrella really helps.

    The good thing is that I think this shows us that the mainstream understands that handmade is also “big business”. There is money to be made from commissions, from charging for space, for advertising and so on. I think that all of us need to understand that our products have value (the ones that are well made and that truly have selling potential) and that our time and effort is an investment that is worth negotiation and good will. Aside from the amazing creative juices that flow through our community, I think that buyers want to feel happy about the personal side of their purchases as well. And, a big box like Amazon just might not be the best fit for us. I do long for a viable option that is not Etsy, but I also appreciate much of what Etsy offers and would like to continue to see it as one egg in the basket of choices that are out there.

    • Thanks, Rachel for your insightful comment. Yes, it definitely helps to have your own e-commerce solution on your own site, and I advocate that all artists do this. After all, any large site can fail, drop you or close you down. When you run your own e-commerce, you own it and you own your list.

      Still, visibility on large sites can be helpful to be seen, and for neophytes who have no idea of how to market or sell, it’s a lifeline. I’ve probably paid more attention than most people to the plethora of online selling solutions for artists and makers because I have the largest directory of them on this website. And I don’t know if there is any one right answer. Just like all trends, there will be an endless number of these sites that rise and fall, as things shake out. A fascinating thing to watch!

  11. I had been watching Amazon long before this announcement was made. Amazon is not a marketplace for the faint of heart. I belong to a couple of groups that give you step by step on how to be successful on Amazon. They are brutal if you violate. It takes a savvy seller to make it there. That being said it holds huge opportunities if you can do volume.
    We have been online for 6 years. I spend a great part of my time learning about what is new in online selling, marketing and social. Have tried somewhere around a dozen platforms. From large to very niche, several highly funded start-ups. We currently sell only on Etsy and our own site. Most marketplaces never really make it. Amazon has the clout to do it. The innovations in shipping/fulfillment alone are amazing.
    To me it is not a question of etsy vs Amazon it is can you make it on Amazon. I don’t believe most Etsy sellers can. Particularly those that want to try it because they think etsy doesn’t care, etsy makes too many changes etc. The online arena changes in the blink of an eye and Amazon is at the forefront of change. I will be curious to see if the upcoming handmade market will utilize fulfilled by Amazon.

    • That’s exactly what I was thinking Barbara, I sell on Etsy but it’s very small and more just to sell the things I make (as well as some destash, which I couldn’t sell on Amazon) but honestly with 25-100 dollars worth of sales a month typically, I’ve been selling a while online (since 2006) but I can honestly say I am not up to their usual stringent rules.
      I used Af for awhile and then Zibbet – both priced them selves out of the market just when they really needed to pull sellers in. I was even on 1K Markets – too many people didn’t want to use Amazon Payments then.
      I think for some sellers Amazon will work but like you said, it’s not for most. Etsy doesn’t like to admit but the largest percentage of active sellers is still the hobby seller – no comment on the quality but for most, you can’t quit your day job.

  12. I would switch to Amazon, I’m hoping they will roll this out in the UK as we have not got a really good online selling platform. ETSY always seemed to be profiteering from the sellers unless you really got the market sew up (scuze the pun). Yes they really messed up by allowing bought in, it had nor fit in their image at all. At least Amazon are openly capitalist…

  13. Great News that the Amazon is in handmade marketplace. Etsy has a stupid integrity Team, one of the terrible customer service. For example if you are a seller and if you reported by the competitors, sometimes later when you open your shop, you will see “uh-oh” – your shop is deactivated or suspended. Etsy is not a trusted place for sellers.

    If you are a buyer and you purchased an item but it’s not what you expected, you don’t have any chance. They do not work with you (eBay is powerful). You lose or go to Paypal and Paypal will help you.

    Now great news. Uh-oh, Etsy. Amazon may have a Handmade challenge for you.

  14. helen jones says:

    I have sold both on Etsy and Amazon and let me give you a big warning about Amazon they treat their sellers awful, I will no longer waste time on any of these sites and spend my time on my own website.

    • Helen, I think that your sentiment is shared by many sellers, although both of these sites have their fans. I would agree with you that having your own website – that you own and control – is one of the best strategies for growing your art business.

  15. I am an artist just looking into the comparison. I will tell you this for sure: a family member sells books on Amazon. She has a huge inventory and a very business like approach to treating customers fairly, describing her product to a tee, etc. She works hard to keep her rating way way up. The sales are worth the effort she puts in — BUT Amazon favors the buyer, no two ways about it. Her rating is the number one concern and one crank can drop you right down in the ratings.

  16. I have not heard ONE PERSON say they are LEAVING Etsy for Handmade @ Amazon.

    It’s an unknown. The platform is clunky, no copy function, for instance. Lots of conflicting info and rumors on their dedicated Handmade forum. Some of it perpetuated by experienced AZ sellers who they invited to shepherd us and who have instead been telling us to prepare to fail. All of us.

    As far as fees, we have about 10 months, it seems, to test it before the $40 monthly fee kicks in. It will not work for those with a very slim profit margin and/or those who sell very little. If I sell at my average price point, and sell 2 pieces a week, which is less than I currently sell between Etsy and my own site, that extra cost comes to about 2% per piece.

    It all depends on how Amazon promotes it and whether new buyers want to buy original art.

  17. I think that Etsy should get back in the game and reverse the policy of allowing mass produced items. This was a terrible decision. Regardless, I plan to sell on Etsy. The idea of a monster retailer selling handmade goods does not sit right with me. It reminds me of shopping in the supermarket and finding the store’s generic brand under cutting by price a company’s product. And who are these select artisans being selected by Etsy? I also think about having one bad review from a customer. You may be able to make good on Etsy but on Amazon. No way, your bad review is broadcasted around the world. And what if you run afoul with Amazon. What are your options. If something is too good be true, it is. Be careful for what you wish for.

    • I don’t blame you for your decision, Artsy, but isn’t Etsy a monster retailer, too? They do millions of dollars in sales every year, issued stock earlier in 2015 and in many ways act like big business. Namely allowing manufactured products, and leaving behind their core concept of handmade goods – according to many artists who have had shops there.

      • What you say is correct. This is why I want Etsy to go back to its roots.The core of Etsy is good. I just read about a tester trying to find a product in handmade on Amazon and she was quickly led into big company products. Etsy will probably lose some money but it will regain the trust of its artisans. I also don’t like the high fee that Amazon is charging. I am still going to stay with Etsy. But you have given me a good idea to check out smaller less commercial sites that sell artisans good.

  18. DON’T EVEN THINK ABOUT HANDMADE AT AMAZON. Amazon is not an artist friendly place. I sold my artwork on small device accessories on Amazon for 4 years until I was literally pushed out of the market place by Chinese forgeries of my own art products. How does this happen and how do they get away with it?

    Amazon has made copyright infringement as easy as possible by allowing anyone to copy / tag onto any listing (detail page) regardless of who the brand or intellectual property owner is. Amazon wants to sell as much as they can a cheap as they can to keep more people coming back.

    They make their $ just the same regardless if it is authentic / legal or not. The current laws under the U.S. digital millenium act grant them safe-harbor rights to protect them from lawsuits as long as they are just a marketplace provider. So Amazon has worked all of their policies and systems around this to literally make it as easy as possible for fake goods to be sold by anyone as the safe harbor status protects them and shifts the blame to the thousands of shady sellers that pop up daily and pay $ to Amazon.

    What about copyright take down notices (DMCA Take Down)

    By training employees in India to deny 3 out of every 5 take-down requests with random responses they can keep the marketplace from being burned to the ground by artist activists and copyright complaints. They then point blame at a foreign Indian subcontractor when they violate DMCA laws by incorrectly denying take-down claims.

    Once a store / copyright infringing listing is taken down, the seller just invents another random name and re-uploads all of the ASIN numbers from their previous shop on a spreadsheet. Boom – they’re back in business in less than 24 hours selling your artwork directly from your own listing or using images from your shop.

    The copyright infringement situation at Amazon IS OUT OF CONTROL.

    Amazon must have legal repercussions for their actions (or lack their of) and DMCA laws must be revised to create this. Ultimately no one cares about artists or their intellectual property rights. Not Amazon, our U.S. government or even most customers looking for a deal. We’re an abandoned class of people and it’s why we starve no matter how business savvy we become. The world just takes advantage of us. It’s been this way forever. Sure we can sue – but when you make no money from your work – you have no money to hire a lawyer.

    Etsy may have it’s problems and mass produced items – but it is nothing compared to the chaos happening at Amazon.

    • Christopher, Although I haven’t heard this complaint before, I have no doubt you had a horrendous experience with Amazon. I’d like to see what their response would be about copyright infringement and will look into this to see if I can get a response from the company.

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