Etsy shares had quite of a nightmare when Amazon launched a marketplace for crafters and artists called Handmade at Amazon. The stock closed out at $13.57, which was down 4%.
Investors were worried that the new competitor might affect the potentials of Etsy. The latter, however, released an immediate statement:
"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," said CEO Chad Dickerson.
As early as May, Amazon started handing out invitations to try Handmade, giving sellers an opportunity to reach Amazon's 285 million shoppers.
"We had thousands of searches every day from customers looking for handmade or handcrafted items," said Peter Faricy, vice president for Amazon Marketplace.
Etsy Inc. started 10 years ago as a marketplace for homemade goods and went public on April.
Handmade at Amazon includes 5,000 sellers from 50 states and 60 countries offering 80,000 items. Amazon retains 12% fee from overall sales made by Handmade at Amazon sellers with no listing fee.
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.
On the side of manufacturing, the two platforms have different takes, as well. Amazon said that all items on the site must be factory-free, meaning they must not be made by manufacturers.
Etsy, however, started letting sellers to use manufacturers for some products to make it easier for its sellers to find 'responsible production assistance'. They just had to meet a certain criteria to be approved by the company.
It is always good to have a healthy competition among companies. That way, customers will always be the priority of each of them.
Do you think Handmade at Amazon can compete and outshine Etsy? Share your thoughts.
