Amazon vs Etsy: Can 'Handmade' Replicate the Charm of Etsy? Does it Need To?
Amazon is ready to take on the bespoke charm of Etsy with a new marketplace for items for sale, handmade by the good people of everywhere. On Thursday, the online retail giant launched a new artsy and crafty marketplace called Handmade at Amazon.
The entry of the largest online retailer into the handcrafted marketplace marks both entirely new domain in Amazon's market domination strategy and a sign that the online artisan-direct marketplace first awakened by Etsy has become a powerful force. According to the New York Times, Etsy's market has grown in the past decade to $2 billion per year in sales.
With Handmade, Amazon is gunning directly for Etsy's consumer base, which the Brooklyn-based company calls a "global community" of "creative entrepreneurs who use Etsy to sell what they make" to the shoppers "looking for things they can't find anywhere else."
Amazon's chief of Handmade Peter Faricy echoed Etsy's language in describing the new venture to the Times, saying, "You can think of it as a factory-free zone, a mass-produced-free zone."
"For the first time on Amazon," he continued, "we're going to have a picture of the artist, a little icon of what state they're from, what country they're from. We're going to launch with an experience that's very different. Customers are going to see the difference."
One could assume Faricy meant it was different than regular Amazon, not Etsy. On that site, artists open an "Etsy shop" for themselves, similar to a social media profile, which puts the seller's identity and craftwork front and center.
But it is a completely new and different realm for Amazon, with its habitual focus on efficiency, low prices, and fast fulfillment and shipping from any number of anonymous sellers. And as such, Amazon has been working towards the launch of Handmade for a while, reportedly sending invitations to artisans, both independent and those with Etsy shops, since May.
The retail giant will begin with six verticals of handmade products for sale, including home, jewelry, art, stationary and party items, dining, and baby products.
Amazon says it is being selective in what type of sellers it allows in Handmade. No outsourcing is allowed, and sellers have to detail their sourcing and manufacturing process: All products must be made entirely by hand, hand-altered, or hand assembled by the artisan or their direct employee to be accepted into the program.
But the company is offering the full force of its logistics, including access to Amazon's shipping and fulfillment centers throughout the country. Add to that, Prime members will get free unlimited shipping with orders from Handmade, the same as with any other Amazon Prime certified seller. The weight of Amazon's shipping empire may attract artisans towards Handmade, even with the strict criteria, the $40 monthly fee that takes effect August 2016, and the 12 percent cut Amazon takes per item sold.
Etsy may be in trouble, or Amazon Homemade may end up being another Amazon experiment that never launched beyond the first phase. It's easy to see the target on Etsy's back, but harder to see if Amazon will miss the mark. While Etsy was the original homemade artisan marketplace and has a decade of experience in that market already, Amazon has an overall active customer base that's more than 10 times the size of Etsy's.
But whether the corporate giant Amazon can attract the type of customers that would go to little, independent Etsy in the first place is yet to be seen.