Since its stock launch, Etsy’s shares have plummeted, and an additional eight percent drop followed the Amazon announcement.
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Investors were anxious that the new competitor might affect the potentials of Etsy.
The divide on manufacturing highlights the challenge that platforms for handmade craft sellers face: They want to preserve the personal nature of handmade goods but also help their sellers (and themselves) grow and make more money.
While Amazon’s initial seller base is significantly smaller, the company does have the benefit of having a 285 million-strong customer base.
“We have designed a custom shopping experience for customers looking for handmade items by bringing together numerous best artisans in the world, and they’re adding thousands of items daily”, said Peter Faricy, VP for Amazon Marketplace. Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can.
Amazon said it has no plans to allow Handmade sellers to work with manufacturers.
Handmade at Amazon went live Thursday, already populated with more than 5,000 sellers and more than 80,000 products, the e-commerce giant said.
Amazon will take a 12% sales fee for every product shifted through its Handmade section.
The cuts both sites take from their sellers are also different.
In order to get wares onto Handmade, sellers have to apply and be vetted to check on the materials they use and to ensure all products are made by hand.
On the other hand, the 1.5 million sellers at Etsy pays 3.5% fee on overall sale with 20 cent listing fee per item listed. Manufacturers can apply to be part of the program and Etsy approves them based on certain criteria.
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It is always good to have a healthy competition among companies. With the online retailer capsizing lesser entities and droning around the country dropping off books, lube, and squeegees three minutes after you drunkenly buy them, the next head to roll looks like it might be Etsy’s.
