Amazon surprised many when it ventured into the artisan/crafter category with the launch of Amazon Handmade last year, but has it been able to make inroads into Etsy territory?
A recent report from Wall Street firm Citi Research about Etsy’s business model took a look and concluded that competition from Amazon and others “hasn’t been meaningful.” One interesting feature of the report is the comparison between Etsy and Amazon by category (as of July 2016).
Citi analyst Mark Kelley estimated Etsy had over 45 million listings compared to Amazon’s estimated 500,000 handmade listings.
Citi estimates Amazon Handmade’s largest category is “Home & Kitchen” with 264,233 listings compared to 16.4 million in the same category on Etsy.
The chart also shows the two categories where Amazon has the largest percentage of goods compared to Etsy are Jewelry and Handbags & Accessories (both much smaller than the Home & Kitchen category.
Kelley also mentioned Etsy’s findings that half of its sellers also sell their goods through other channels (“which is consistent with our interaction with sellers,” he said), but those who do get 1/3 of their sales from Etsy.
Some other findings from Citi:
Amazon fees are too high: “In our talks with Etsy sellers, many viewed Amazon’s fees as too high and the overall offering incompatible with selling handmade items. We believe this mentality among sellers has translated into fewer items listed on platforms outside of Etsy.”
Etsy sellers are sticky: “Approximately 32% of Active sellers who joined Etsy’s platform in 2011 and 2012 remained active sellers in 2014 and 2015, respectively. At the end of 2015, Etsy has 1.6M active sellers, where 13% have been on Etsy for 4+ years.”
Etsy buyers are sticky: “Referencing the figure below, we can see that Etsy has strong retention from their buyers; in 2016, 81% of GMS came from repeat purchasers while 19% came from first time purchasers.”