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Handmade at Amazon Officially Launches, Factory-Free

Most sellers can’t list jewelry on Amazon.com because it’s a restricted (“gated”) category. But now thanks to the launch of Handmade at Amazon, they may be able to – if they make their items themselves.

Amazon finally launched the long-anticipated category on Thursday, and featured front-and-center on the home page of Amazon.com/Handmade are rings, necklaces and earrings. But the retail giant’s handmade category is also restricted – artisan sellers must apply and be approved before they can set up a shop.

The list of categories featured on the home page includes Jewelry, Home Decor, Artwork, Stationery & Party Supplies, Kitchen & Dining, Furniture, and Bed.

Etsy sellers have been particularly interested in the new site since we first wrote about it in May. Many have wondered how a marketplace so structured for commodity goods with a pressure on sellers to lower prices could work for makers of handmade goods.

We also wondered what prompted Amazon’s move into the space. Amazon category manager April Lane explained how it got on the company’s radar screen. Two years ago, Amazon noticed that its search data showed an increasing number of searches related to handmade. “That drove our decision,” she told EcommerceBytes.

Amazon now gets thousands of searches a day relating to handmade goods, Lane said.

Amazon began slowing building out a team to add the features necessary for the handmade listings, and a year ago began building the business team to focus on issues such as branding and how to attract artisans to the platform.

Interestingly the timing coincided with the news that Chinese firm Alibaba was building a marketplace in the US called 11 Main. The company had begun actively recruiting merchants in the fall of 2013 for its marketplace that prominently featured seller profiles and unique inventory. Alibaba Group has since sold the 11Main.com marketplace and subsidiaries that ran it.

In the meantime, Etsy has redefined what it considers to be handmade, now allowing sellers to use help – and it will soon launch Etsy Manufacturing, a marketplace that helps designers and manufacturers “build responsible partnerships.”

The decision is controversial among Etsy purists, so it will be with great interest they read on Amazon Handmade that mass-produced products are not allowed. Specifically, Amazon states:

“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.”

But is that too simplistic an edict? While Amazon is doing a good job of branding the site as “factory-free,” the truth is that sellers can have up to 20 employees, itself a difference from what had been Etsy’s longstanding policy.

Etsy has struggled with this issue – the bigger the site gets, the harder it is to enforce the rules, especially with so many gray areas. Amazon already has 5,000 sellers in Handmade at Amazon listing 90,000 items (that’s an average of 18 items each), with 800 of those items sitting in Amazon Fulfillment Centers that are Prime eligible.

Etsy CEO Chad Dickerson released a statement on Thursday:

“We believe we are the best platform for creative entrepreneurs, empowering them to succeed on their own terms. Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can. Our platform attracts 21+ million thoughtful consumers seeking to discover unique goods, and build relationships with the people who make and sell them.”

Jason Malinak of Etsy-preneurship.com said he isn’t seeing many sellers jumping ship from selling on Etsy – many are hoping both ecommerce platforms can help their businesses grow, he said.

Abby Glassenberg of WhileSheNaps said Amazon’s new handmade marketplace presents an opportunity for crafters and makers to reach new customers. “Being able to buy a special handcrafted necklace or piece of art for their home right on Amazon is going to make sense for customers and will mean an increase in sales for crafters.” She also says it could be good for Etsy. “Up until now there really hasn’t been an equal competitor to Etsy when it comes to web traffic. Now that there is I think Etsy will work to differentiate themselves both for buyers and for sellers and that’s going to be a good thing.”

Some sellers are uncomfortable with Amazon fees. There’s no arguing that Amazon commissions are significantly higher than Etsy’s – 12% instead of 3.5%. As we noted in Thursday’s AuctionBytes Blog post, sellers paying Etsy 88 cents commission for a $25 sale will pay Amazon Handmade $3. On the other hand, listing on Amazon Handmade is free til next August, and Etsy charges 20 cents per listing.

But on an Etsy Chit Chat thread, sellers were already reporting getting orders on Handmade on Amazon on the first day of launch, generating some excitement.

Artisan sellers have a range of concerns about Amazon Handmade, from the difficulty of the listing process to the way it treats sellers, employees, and warehouse workers, to concerns about Amazon’s returns policy.

Should artisan sellers be rejoicing, and should Etsy be worried? Take a look at Amazon’s new offering, and let us know what you think.

Comment on the AuctionBytes Blog.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.