Etsy CEO Chad Dickerson released this statement on Thursday, the day Handmade at Amazon launched:
We believe we are the best platform for creative entrepreneurs, empowering them to succeed on their own terms. Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can. Our platform attracts 21+ million thoughtful consumers seeking to discover unique goods, and build relationships with the people who make and sell them.
Dickerson has said similar things in the past, but for many sellers his words fall on deaf ears. Over the last several years Etsy sellers have become disenchanted, accusing the site of losing its way. They point out the many resellers who stock their shops with cheap manufactured goods and sell at very low prices. There’s also concern over shops that seem to be clearly violating intellectual property yet are left unchecked and an overall disenchantment with what seems to be Etsy’s push to welcome sellers who work with manufacturers. Etsy has tried to dispel these fears over and over again, most recently by issuing a transparency report explaining how they handle shops that break the rules.
With nothing to hold Etsy up to, no real competitor to evaluate it side by side with, it’s been difficult to see Etsy’s true value to sellers. Other handmade marketplaces have existed for years, but none of them have rivaled Etsy’s customer base of 21 million. Without a true marketplace comparison it was hard to believe that Etsy was still a good platform.
Handmade at Amazon launched last week and now we’ve got a true competitor at last. With an active customer base of 285 million, Amazon has what it takes to make being part of a marketplace worthwhile.
The media is overwhelmingly describing Handmade at Amazon as “the Etsy killer.” In fact, I think it’s just the opposite. I’d argue that Handmade at Amazon is Etsy’s dream come true.
Etsy’s focus on serving the needs of small craft businesses is now shining more clearly. For one, the interface is incredibly easy to use. On Etsy setting up a new listing quick and easy. Use the one page editor to import multiple images at once and easily rearrange them. Need to change something? Make bulk edits to all your listings with just a few clicks. Sellers listing items on Handmade at Amazon are experiencing something very different. They can only upload one photo at a time and images can’t be rearranged. The listing text is in one long paragraph with no breaks (and using HTML to make paragraph breaks is not allowed). Mistakenly put your item in the wrong category? You’ll have to scrap the whole listing and start again. There are no shipping profiles which means there’s no way to bulk update shipping information on all of your listings. And you can’t create and control the sections of your store. Amazon is working to refine the process (they just added the ability to copy listings yesterday), but I now fully appreciate Etsy’s smooth user interface for sellers.
It’s also hitting home how much creative freedom Etsy gives sellers when it comes to photography and styling. Amazon strongly suggests that photos to be on a white or neutral background and props are only allowed in the main photo if they’re sold with the item. If sellers don’t follow the suggestions their items are suppressed in search.
Etsy now looks really affordable, too. Handmade at Amazon takes a 12% fee on each sale, assessed on the sale price plus shipping (note that this fee is 15% for sellers elsewhere on Amazon) and will begin charging handmade sellers $40/month beginning in August 2016, although there are no listing fees. Etsy’s .20 listing fee and 3.5% transaction fee is more affordable. For example, it costs a seller $5.76 to sell a $40 ceramic mug with $8 shipping on Handmade at Amazon, but just $1.60 to sell the same mug on Etsy, and this is not including the $40 monthly fee that hasn’t been implemented yet. Again, Etsy’s focus on helping tiny businesses to be profitable shines through.
For artisans who make items to order, Etsy’s payment structure is more favorable as well. When a buyer places a custom order on Etsy the seller gets the money right away. Amazon holds the money until the item is shipped, meaning you’re not able to use it to buy supplies.
Etsy’s comprehensive and ever-growing resource library to help sellers grow their businesses really stands out, too. The Etsy Seller Handbook and the Etsy Success Newsletter contain hundreds of articles on topics like photography, legal, talking to the press, pricing, and marketing. This resource library is incredibly valuable to novice and seasoned sellers alike. In comparison, sellers on Handmade at Amazon, who are in the mix with the hundreds of thousands of other sellers on Amazon, don’t have access to articles and tips for improving sales in their division. Handmade at Amazon is still very new and perhaps those resources will grow, but it’s also highly possible that Amazon won’t invest very much in them given that Handmade at Amazon is only one of many new divisions they’ve opened in recent months.
Amazon vetted every handmade seller to be sure their products were truly handmade. But how does Amazon define handmade? Items have to be “made entirely by hand, hand-altered, or hand assembled (not from a kit). Products must be handmade by you (the artisan), by one of your employees (if your company has 20 or fewer employees), or a member of your collective with less than 100 people.” Having one of your 20 employees add a bow to imported leg warmers? That seems like it would past muster. We’re seeing that defining handmade is very difficult for across the board, not just for Etsy.
And keep in mind that Etsy doesn’t manufacture anything itself. There is no fear that Etsy will notice the popularity of a particular item and begin producing that item and selling it at a lower price, undercutting the original maker. Amazon, on the other hand, is known for manufacturing products that do well in its marketplace. There’s no indication right now that they plan to use the handmade marketplace this way, but even if they never do the fear that they could and they might still exists.
None of this is to say that Handmade at Amazon is a bad thing or that Etsy has totally resolved its trust problem with sellers. What Handmade at Amazon does provide, though, is a comparison. Rather than killing Etsy, Handmade at Amazon is shining a light on its strengths.