Move over Etsy there’s a new arts and crafts marketplace coming to town. Well, maybe they aren’t really all that new and it’s actually hitting cyberspace not your hometown, but still it’s big news and it’s attracting plenty of attention.
Who’s the new kid on the block, you ask?
Well, it’s none other than good old Amazon.com. Yep, that’s right. Amazon is trying to cut themselves in for a piece of the arts and crafts pie. Can you really blame them? The Wall Street Journal reported that there were some 1.4 million members on Etsy last year that were considered active sellers and they sold their goods to some 19.8 million active buyers.
Amazon is calling its new platform “Amazon Handmade” and has reportedly been actively recruiting Etsy sellers by taking surveys to gauge their interest in being part of the new platform. Although the survey didn’t really give sellers any insight into what type of fees or pricing strategy Amazon is planning, you can bet it will be competitive with Etsy. At the moment, sellers there pay 20 cents for a listing and it stays on the site for four months. When an item sells, they then charge 3.5 percent for whatever the item actually sells for.
While there will be no way to know the true difference in the costs and fees between the two sites until the new platform officially opens, at the moment, the closest model to that fee structure is the one where Amazon lets sellers who sell no more than 40 items a month to list for free, but then charges .99 cents when an item sells. In addition, there are variable costs from 6 to 15 percent that sellers are charged, depending on which category their item was listed in. Sellers who sell more than 40 a month, have a monthly fee and then additional fees for items as they sell.
How this will affect Etsy is anyone’s guess. Etsy has had some bumps in the road lately and while sellers are for the most part content, investors perhaps not so much. Etsy went public back in April with an opening of $16, which then almost doubled closing at $30 on the first day it was trading. Take a look at today, however, (May 29, 2015) and they’re sitting at $16.76 a share.
Etsy also has had to deal with some bad pr issues when reports surfaced that there were allegedly sellers with counterfeit goods for sale on the site. While neither the stock price nor the accusations have really effected most of their sellers, if Etsy continues to post company losses each quarter, you have to kind of wonder if they’ll have to make an adjustment to those low listings fees if they don’t want to continue to having a deficit.
Do you sell on Etsy? What do you think about Amazon’s plans for Amazon Handmade? Leave a comment below.