Dive Brief:

• Amazon’s new “Handmade at Amazon” marketplace went live in the wee hours of Thursday morning.

• The 80,000 items from some 5,000 sellers in 60 countries are handmade goods of the type that helped Etsy first make its name. 

• But in an effort to broaden its market share, Etsy has pivoted to allow larger companies and now has a serious problem with mass-produced and even counterfeit goods that have upset its sellers, buyers, and investors. 

Dive Insight:

Etsy did the work in demonstrating to the world that carefully constructed handmade goods have wide appeal, and now Amazon appears to be poised to beat them at their own game. Amazon, unlike Etsy in recent years, says it has been careful in vetting sellers interested in the new marketplace to ensure that they’re selling only handmade things. Those that use machinery in their process must describe it to Handmade at Amazon’s satisfaction. 

Any vendor deemed not artisanal enough for the new marketplace are invited to sell their wares at Amazon’s larger Marketplace, which doesn’t have the same restrictions—an option that Etsy doesn’t have. That enables Amazon to maintain the strictly handmade appeal, which Etsy’s moves have lost to a great extent.

Etsy’s pivot to allow more machined-manufactured goods from larger sellers (and its problem with counterfeits) has upset many sellers.

Amazon’s incredible reach and fulfillment capabilities are other boons to sellers. Amazon has 285 million active accounts worldwide, compared to Etsy’s 22 million buyers. And Amazon’s logistics include free shipping to Prime members.

Etsy takes a much smaller cut of its sellers’ earnings, 20 cents for each item listed and 3.5% of sales, whereas Amazon takes a 12% of sales without a listing fee.

But experts say that many sellers will nevertheless gravitate to Amazon’s new marketplace. “We believe many sellers angered by the increasing presence of mass-manufactured and counterfeit goods on Etsy are likely to shift items to Handmade at Amazon,” Wedbush Securities analysts wrote in August. 

“Amazon has all the capabilities they need to make their program a big success. They have all the marketing power in the world, and they’re already so global,” said Dani Marie, CEO of Handmade Seller magazine and author of the independent “The Handmade Entrepreneur,” told the New York Times.