Etsy, who is dedicated to user-made and vintage items, may be in trouble if Amazon takes over (via Etsy)
Etsy has always been the go-to site for kitchy items for any and all fandoms. Whether it's a homemade Doctor Who beanie or Game of Thrones plushies, you can be sure to find it at Esty. But with Amazon's latest business plans this could be the beginning of the end for the hand-crafted site. The Wall Street Journal recently reported that the online giant has been sending some of Etsy's biggest sellers emails and offering them a platform to sell their goods. The company then asked the sellers to fill out a form with information about the items they sell. Amazon's new section for crafted items is called Handmade, but as of yet there isn't any idea when it will launch.
While this proposed plan of action will offer future sellers a bigger platform and a larger audience, it may not result in bigger sales. Currently, Amazon's cut of sales ranges from 12 percent to 45 percent per item, with a one dollar minimum for sold item. Etsy, on the other hand, takes $.20 for every item listed with a 3.5 percent cut of the selling price. Amazon also has strict shipping demands for their Prime service, which some sellers may not be able to meet since many of their goods are made on demand.
Created by iospace, a small Brooklyn-based company made up of Robert Kalin, Chris Maguire, and Haim Schoppik, Etsy launched in 2005 and gained attention for the new tools it used to promote sellers, such as flash visuals, expansive categories, and tagging. Unlike eBay and other online shops, Etsy focused on vintage and hand made items. It wasn't until 2013 when unique manufactured products were allowed to be listed as well. At the end of 2014, the company boasted 54 million registered users and $1.93 billion in total sales. In March 2015 it was revealed the online retailer is valued at $1.8 billion. But the company isn't experiencing the same amount of success they once were.
Etsy's recent earnings report showed a quarterly loss of $36.5 million compared to their loss of $463,000 in 2014. Their stocks have dropped in price as well. After releasing their quarterly results, their stock dropped 18 percent in price. Previously, the company's shares opened at $31, almost double it's IPO $16 price. But after their abysmal earnings came to light, the stock dropped to $17.
Amazon, who is known for selling anything and everything, has expanded its marketplace over the years to feature in tailored categories, such as fine art and scientific equipment. It already has a section dedicated to “Arts, Craft, & Sewing.” Since Amazon is the one-stop-shop for online shopping, it's very possible the company can overtake Etsy when it comes to hand-crafted items. Will the DIY spirit that Esty encouraged will be lost on Amazon? Only time will tell.
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