Amazon looks to out-Etsy Etsy
Amazon’s long-awaited answer to Etsy is here. Yesterday the e-tail giant announced the launch of Handmade at Amazon, a new online store featuring items made by artisans and sold directly to consumers.
The new store features products in categories including art, dining and kitchen, furniture, home décor, jewelry, party supplies and stationery.
"We have designed a custom shopping experience for customers looking for handmade items by bringing together many of the best artisans in the world, and they’re adding thousands of items daily," said Peter Faricy, VP for Amazon Marketplace, in a statement. "Knowing an item has a unique story behind it creates a personal experience that customers have told us makes owning handmade items special. Handmade at Amazon offers customers more than 80,000 quality handcrafted items from around the world, and over 30 percent can be personalized by artisans to delight customers."
![[Image: Handmade at Amazon]](/public/images/discussions/18592/amazon-handmade-still.jpg)
In an apparent attempt to distinguish itself from Etsy, Handmade by Amazon is billing itself as factory-free. Last month, Etsy launched Etsy Manufacturing, a matchmaking service between artisans and companies that can help ramp up production while holding to the site’s mission of putting community before profits.
Handmade by Amazon features more than 80,000 products sold by more than 5,000 sellers. According to The Seattle Times, about 600 items will be available for free two-day delivery to Amazon Prime members.
Etsy, which was founded in 2005, has 32 million items for sale on the site from 1.5 million sellers. The company, which went public in April, has seen its stock fall from a high of $35.74 during that time to a low of $11.85. Yesterday, it closed down 4.3 percent to $13.57.
Amazon saw its shares fall 1.62 percent to $533.16 in yesterday’s trading.
- Handmade at Amazon
- Debuting the Home for Artisans: Handmade at Amazon – Amazon
- About Etsy – Etsy
- Amazon takes on Etsy, launches craft site Handmade – The Seattle Times (tiered sub.)
- Amazon Challenges Etsy With Handmade at Amazon – The Associated Press/ABC News
- Will matching artisans and manufacturers secure Etsy’s future? – RetailWire
Discussion Questions
Will Handmade by Amazon prove to be an Etsy killer or will it grow the overall market for artisan goods, in effect, helping itself and its competitor? How do you expect the competition between the two online marketplaces to play out?
Poll
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Kai Clarke
CEO, President- American Retail Consultants
There should be room for at least two sellers of artisan goods. In fact, many customers for handcrafted goods might decide to steer clear of Amazon, with its brand perception as a monolithic force. I wouldn’t expect Etsy to suffer in the long run, but I’m sure the competition may force it to find operating improvements.
Amazon won’t kill Etsy, but it will hurt it. Consumers trust Amazon like they trust few other retailers. Over time I expect Amazon to grow the category and add significantly more items for sale. When coupled with its one-click checkout, Prime and delivery systems, Amazon is a force that Etsy does not want it its space.
If Amazon goes the route of truly handmade, customized items by individual artisans, what does that mean in terms of reliable supply and shipping which are huge components of Amazon’s consumer trust factor?
Artisans are typically small entrepreneurs with very small production and extremely limited inventory that is often in single digits, with no real-time inventory system.
Amazon reaches millions … how will Amazon Handmade be able to show if an item is available for purchase if the artisan does not have the capacity to show real-time inventory? Does Amazon Handmade then become a build-to-order fulfillment? If so that Amazon “trust” factor is highly dependent upon the artisan’s ability to execute reliably.
I think ETSY brilliantly scoped out and has cornered that market, and buyers know and are satisfied with it when it comes to handmade and antique items. Not sure it’s even worth Amazon’s time for such small production. Guess we’ll find out.
Amazon is so large and so efficient that adding another facet to their incredible logistics and web backend retailing model only makes sense. Yes, this will certainly give Etsy a challenge, and may ultimately prove to be their downfall. Only time will see, as Etsy continues to evolve (and hopefully grow).
Someone once said that a rising tide lifts all boats. It works when one gas station goes in across the street from another, or a fast food restaurant goes in across the street to another fast food restaurant. However, this is Amazon. It’s like the BIG/HUGE box store going up next to the local retailer.
Well, I have good news. The little guy can sometimes not only just survive, but thrive. Amazon will do its thing, and do it well (most likely). For the artisan, it will be another avenue to showcase merchandise. For Etsy, it will be a chance to show some differentiation and create a different value proposition to its customers.
Think about how the local Ace Hardware store competes against the big box stores that move in next door or just down the street. They provide a different experience, sometimes different merchandise and more. Etsy needs to watch Ace (and other retailers in the same situation), take notes and execute on a strategy that allows them to compete in this very competitive market.
Amazon will definitely help the market grow because they have the ability to integrate the “handmade experience” within an established global e-commerce experience. Because of their reputation, they will attract new customers to the online marketplace.
Amazon will not be able to kill Etsy because they have a strong historic legitimacy and brand universe, but they will be able to compete. However, Amazon can capitalize on its marketplace experience and its massive client base to strongly compete against Etsy. When it comes to strategic matters, Amazon fights hard and doesn’t give in easily.
In the end, Amazon has the international asset on its side, Etsy the community aspect on its side. Choice, customer experience and price will set the two marketplace vendors apart and vendors will choose which one to work with based on which platform aligns best to their overall business strategy.