Amazon takes aim at Etsy with launch of Handmade

Steven Loeb · October 8, 2015 · Short URL:

Etsy has been having a hard time lately, seeing its stock fall as it struggles to keep sellers happy

(Updated with comment from Etsy)

It's good to be Amazon. As the largest retailer in the world, with a built-in customer base of hundreds of millions, the company can go after other established players in the space and pretty much automatically be competitive.

Earlier this year, for example, it launched a professional services provider, directly going after huge companies like Thumbtack and Angie's List, just because it can. Now it has its sites set on a new target: Etsy.

On Thursday the company debuted Homemade at Amazon, a place where “customers can discover artisans from around the world, and shop local from artisans based in their community with the familiar Amazon experience they know and trust.”

Categories on the site include Jewelry, Home Décor, Artwork, Stationery and Party Supplies, Kitchen and Dining, and Furniture.

Amazon is also touting more than 80,000 items, from artisans in all 50 states and in more than 60 countries. International items include things like walnut cufflinks from Australia and handcrafted wooden lamps from Italy.

All items, it said, come from approved artisans who made handcrafted products. Every Handmade product page contains a location icon identifying where the artisan is based, along with a link to the artisan’s profile.

That last part seems to be a bit of a dig directly at Etsy, which has come under fire in recent years, by some of its users, over how it allows some of its goods to be produced and sold. That was especially true after a 2013 decision to allow its vendors to use outside manufacturers to make their goods.

In fact, the timing of this could not be worst for Etsy as just last month the company unveiled Etsy Manufacturing, a way for sellers to source production assistance.

For a long time, people looking for that authentic, homemade feel that they once loved about Etsy had nowhere else to turn. Now Amazon has given them an alternative.

The company, which went public in April, has seen its stock slip drastically. It debuted at $31 a share, almost double its $16 IPO price, but has since crashed hard, going below its IPO price in May.

Etsy managed to beat in its second quarter earnings report, with revenue of $61.4 million, and earnings per share of negative $0.07, coming out ahead of expectations of $0.08 per share, off revenue of around $60 million. It's stock still took a big hit, however, thanks to lower than expected guidance, dropping 13% after hours.

After this news from Amazon, Etsy's stock is being hit hard again, dropping 5.25% to $13.44 a share.

With Etsy currently struggling, Amazon likely smells blood in the water, and a great opportunity to strike at a wounded company.

"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," Chad Dickerson, Etsy CEO, told VatorNews.

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