Amazon Treads On Etsy’s Toes With Handmade Marketplace Launch

Amazon has expanded its ecommerce empire yet again, opening a marketplace for handcrafted goods that takes it right onto Etsy’s bespoke knits.

The new marketplace, Handmade at Amazon, went live in the U.S. earlier today — offering handmade items in the following initial categories: Jewelry, Home Décor, Artwork, Stationery & Party Supplies, Kitchen & Dining, Furniture and Bedding.

Amazon is making a big push to tout the “benefits” of selling on its platform to the artisans it’s hoping to woo to the marketplace — flagging its large customer base, free phone and email support, business reporting tools and custom ordering tools.

Amazon’s fee structure for Handmade is a 12 per cent cut per item sold, plus a monthly fee of $40 if an artisan sells more than 40 items per month from their Handmade account (although it’s waiving this fee until August 2016 — to get the handknitted ball rolling).

The company is applying strict criteria at this stage to who qualifies to sell on Handmade — noting that:

All products available in your Handmade at Amazon store must 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. Mass-produced products or products handmade by a different artisan are not eligible to sell in Handmade.

This positions this new sub-division of as ‘more bespoke’ than Etsy, which opened a manufacturing program last month, allowing sellers on its platform to outsource manufacturing to approved Etsy manufacturers in order to scale their businesses (taking it further away from its strictly handcrafted roots).

Handmade at Amazon

Amazon, of course, already offers a standard marketplace option for individual sellers wanting to shop goods they didn’t make themselves on — so it can offer an artisan-only sub-division now without any downside. It’s presumably hoping to woo smaller Esty sellers who might be disgruntled about competing with other craftspeople that are outsourcing their manufacturing.

Speaking an interview with the NYT, Peter Faricy, the Amazon VP overseeing Handmade, touted the sub-division of the ecommerce empire as “a factory-free zone, a mass-produced-free zone” — taking a clear side-swipe at Etsy (while side-stepping the irony that, taken as a whole, is absolutely not a factory-free or mass-produced-free zone).

It remains to be seen whether artisans will heed Amazon’s call to be hosted on a ‘bespoke’ sub-section of its sprawling ecommerce empire. According to the NYT, Handmade at Amazon is kicking things off with around 5,000 sellers from 60 countries signed up, and more than 80,000 handcrafted items on sale.

Etsy, which went public in April, has had a turbulent time in the share price department since its IPO, with investor concerns focusing on slowing revenue growth and rising costs — likely explaining why it’s making moves to scale sellers on its platform by opening up outsourced manufacturing. Things aren’t going to get any easier for the New York-based craft marketplace with Amazon squatting in its backyard.