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Amazon Handmade: Healthy Competitor or Etsy Killer?

“Discover items you can’t find anywhere else,” a bold invitation to anyone in search of products screaming “novel” or “original" (or yes, even “hipster").  This call to action is the work of Etsy, the ever-expanding online source for handmade goods.  Born in a small Brooklyn apartment about a decade ago, Etsy was the brainchild of Robert Kalin, Chris Maguire and Haim Schoppik.  Since its inception, the online marketplace has experienced rapid growth in which it grossed close to two million dollars in under two years, according to the New York Times.

Since then, that two million has grown to two billion per year and is still on the rise (that’s a lot of crocheted beanies and lamp fixtures made of clothes-pins).  But just as Etsy once used its myriad of quirky mittens to eliminate the need for knitting grandmothers everywhere, a bigger fish smells blood in the water. This time though, that fish is actually a gargantuan sea-monster that eats the biggest sharks around for breakfast. Its name: Amazon Handmade.

Heads up Etsy, because the $2 billion per year you’ve been celebrating shrivels in comparison to the $75 billion in annual sales experienced by Amazon, making the e-commerce mega-store worth over $250 billion and the largest online retailer present, surpassing even Walmart and AT&T.  By officially launching project “Handmade,” the newest addition to Amazon’s shopping site, which at first glance, virtually aims for Etsy’s exact business model: delivering goods handmade by small, independent retailers straight to consumers. Amazon poses a threat vastly larger than any other sites specializing in handmade goods such as Hatch, Brika and Aftcra.

We’re not saying coincidences don’t occur, but after the 3 A.M. launch of Amazon Handmade last Thursday, Etsy’s stock dropped over four percent by the day’s market close, though this may only indicate that Etsy’s got some fickle investors scared of competition.  A little fear, nevertheless, seems reasonable when faced with your competitor’s ability to reach 240 million people with products from over 5,000 sellers instantly. 

As for small business owners and lovers of art culture whose lives don’t depend on the up-and-down fluctuations of the stock market, is Amazon Handmade a friend or foe?
For small business owners — friend — and in this case, the most popular friend you can get.  Recognizing the large pool of popular small businesses that populate the internet currently, Amazon has already begun seeking out artists from other markets such as Hatch and Etsy, personally contacting owners to make the move to a larger enterprise.

These efforts could be viewed as the big shark lending a helping hand, but could also mean the monopolization of a very niche industry over time. A shift of this kind is a sounding alarm to the ears of handmade vendors, regardless of which marketplace they use to sell their product. It would give Amazon all the power, but take away all the consequences. Creating a single monopoly over the handmade market, Amazon could charge any fee it desires for vendors to collect profits (currently a 12% transaction fee compared to Etsy's 3.5%) or even to display items for sale. Due to the basics of logical economy, this would mean higher prices for consumers as a whole.

Now, all of this isn’t to glorify Etsy and make Amazon out to be the big, scary monster that it’s viewed as by the small business supporters and radical libertarians.  In fact, Etsy already demands a listing fee for displaying items ($0.20), while Amazon Handmade employs even stricter rules than its competitors on what is to be considered “handmade” and “small-scale.”

Feeling so divided in terms of ethics and economy, at the end of the day, it looks like we’ll have to choose aesthetics and convenience over everything. But whether you choose your online database for handmade novelties based on Etsy’s easier-on-the-eyes grayscale aesthetic or Amazon’s 2-Day Prime shipping, we can all agree on one thing: we’re ever-so-grateful to see an infinitely expanding market for sequined throw pillows and whatever else artists all over the globe have in store.

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