Why Amazon Enters the Hand-made Market to Grab Etsy’s Business?
The aggressive giant Amazon stepped into Etsy’s hand-made niche market and launched Amazon Handmaid’s new service focusing on hand-designed products. But Amazon’s ambitions may be far more than that. Creating a market designed for crafts is just Amazon’s first step to attract more “in-house creators”. Amazon includes Etsy’s craft sellers and provides Kickstarter inventors with a way to sell products. The platform quickly faces consumers, as if it is creating a platform for brand and innovation cultivation, and this platform can quickly face the largest number of consumers, which is an advantage that other niche market platforms cannot match.
Reasons behind Amazon entry in hand-made market
In May of this year, Amazon sent a letter to Etsy sellers inviting them to open a store on Amazon.
- Amazon charges 12% of sales. This includes sellers’ access to Amazon’s cash flow service, more favorable logistics fees, and other Amazon-provided services.
- Service (free of listing fee and monthly fee).
- Today, as soon as Homemade is launched, there are more than 60 countries and 80,000 products that can be purchased on Amazon Handmade.
- Amazon’s massive online consumers of up to 285 million have greatly attracted handicraft sellers to take refuge.
- On the contrary, Etsy, which has 1.5 million sellers and 21.7 million buyers, charges sellers a 3.5% discount on sales, as well as a listing fee of $0.2 per item, plus the fee paid by the cash flow.
- In terms of manufacturing specifications, Amazon Homemade and Etsy are also very different. Amazon stipulates that the products listed on Homemade must be “factory-free”, which means that the products must be guaranteed to be non-factory OEMs. This hits Etsy’s pain points because in order to allow sellers to expand their business scale, open products can be outsourced by factories, Etsy also helps hand-made designers and factories to match demand, which has been criticized by many Etsy sellers.
- Etsy’s insistence on giving up purely hand-made products has also challenged its brand positioning.
Etsy still has the largest community of hand-made designers, and the brand’s design art and hand-made impressions are still deeply rooted in people’s hearts. Now that Amazon is challenged by the behemoth, it is worrying whether it can persist without being destroyed. After all, Etsy’s stock price Since its listing in April this year, the peak has fallen 65%. The launch of Homemade at Amazon has aggravated the decline in Etsy’s stock price, which shows that the market is not optimistic about Etsy’s future survival space.