Art or sales? Handmade at Amazon vs. Etsy


Ever heard of Etsy? I didn’t, until now. Etsy is a peer-to-peer e-commerce website. The website was launched in 2005. Etsy is an online marketplace for handcrafts, vintage items and unique factory-manufactured items. These items cover a wide range including; art, clothing jewelry, photography, quilts, knick-knack, food and toys. They follow in the tradition of open craft fairs. I hear you thinking, Is there really an online market for this stuff? Yes there is, and it is pretty lucrative as well.

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By the end of 2014, Etsy had 58 million registered users, with 1,9 million sellers and 19.8 million buyers. Sellers can list there products for $0,20 per item and have to pay 3,5% of their sales value to Etsy. Etsy now generates transactions worth $1,8 billion per year! The company went public in April 2015 and had a sales revenue in 2014 of $195,6 million. Not bad for selling knitted socks and leather bracelets.

Now Amazon is gunning for a piece of this booming online market. Amazon launched their own version of Etsy this morning at 3:00am Eastern time, named: Handmade at Amazon. They have all the capabilities the need to make their version a great succes. They have a lot of marketing power, and they they are already operating globally.

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Amazon is gigantic and focussed op mass commerce, so there are always people looking on the website for handmade crafts. In this case creative entrepreneurs can boost their sales. But is this a strength? Not everyone likes big corporate organization. Etsy is popular because it is not focussed on mass commerce. And by the way, art should not be focussed on mass commerce, right? For me this seems to go against handmade. This is really a challenge for Amazon. Creative entrepreneurs who want to list their work on Amazon handmade also have to find a balance between creating art and sales.

According to Etsy CEO Chad Dickerson, Etsy is meant to be community based business. They want to connect people and create an Etsy economy.

What do you think about Amazon taking over the online handcraft market? Should Amazon leave the market to be relatively small and community based or should they exploit this booming market?

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Sources:

http://www.nytimes.com/2015/10/08/business/amazon-challenges-etsy-with-strictly-handmade-marketplace.html

http://uk.businessinsider.com/etsy-ceo-chad-dickerson-interview-2015-10

https://en.wikipedia.org/wiki/Etsy

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One response to “Art or sales? Handmade at Amazon vs. Etsy”

  1. 354902kh says :

    In my opinion, mass market companies and retailers are actually losing significance within the personal style segment. More and more consumers are actually looking for “one of a kind” products. And this is exactly why Etsy is so successful. Since the community itself is the main contributor and creator, the platform is extremely authentic and I believe that also buyers would see their purchases as support to the small businesses of creative entrepreneurs. Etsy kind of reminds of a flea market – that is of course online.

    Amazon obviously identified this as a great new model to respond to these customer needs but it definitely boils down to the execution and implementation of this new business unit. Obviously the company is in posession of all necessary financial resources and also has a lot of expertise within e-commerce. However, if the company fails to include the personal and creative dimension of the vendors and solely offers a marketplace for vendors of handcrafted goods, this would neglect the entire identity of such a marketplace.

    At the moment, I cannot really imagine an “Etsy” environment on Amazon but since profit margins are generally relatively low and generating a stable revenue stream is quite difficult for those kinds of players, Amazon could possibly move many vendors to its platform, if smartly priced (e.g. lower commission fee). The tech company has the credentials and also the support system to enter this market.

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