For Hazel Bays, a quilter in the town of Tick Bite, North Carolina, the holiday season has been tinged with disappointment. The handmade felt Christmas tree ornaments she sells on Etsy are normally a popular item, but this year she’s seen far fewer orders than usual, even after reducing prices.
“People are just not buying on Etsy,” she sighs. After five years of selling through the online marketplace, she is planning to close one of her Etsy shops and start listing more items on eBay.
In October, Amazon launched a new “Handmade at Amazon” section, featuring some of the same sellers who also sell on Etsy. A month later, the ecommerce group snatched away eBay’s most high-profile artisanal brand, Martha Stewart American Made, and signed on the media and merchandising executive as part of Amazon Handmade.Etsy, which once dominated online sales of eclectic handmade goods, faces growing competition. Big retailers including eBay and Amazon have stepped up their focus on handmade items.
While the handmade market is small relative to the total sales of companies like Amazon or eBay, it is growing fast.
Etsy’s gross sales were $2.3bn in the past year, up a third from the previous year. At eBay, sales of handmade and craft items come to more than $500m annually.
For Etsy, the additional competition has arrived at a sensitive time. The company went public in April, but its share price has halved since its first day of trading, and profits have not materialised. Online traffic to the Etsy website is still growing, according to ComScore, but sales have not been rising as fast as analysts expected.
Etsy says more than half of its sellers use other sites also, and for those who do, it represents about 30 per cent of their sales.
“Etsy sellers have always sold elsewhere and we want to help them grow however they want to grow,” said Kristina Salen, chief financial officer, at a recent conference. “We think the special sauce here is 10 years of dealing with micro entrepreneurs, providing service for them in a way that none of these platforms do.”
But discontent has been brewing among Etsy sellers. Some complain about changes in the search function and in the website’s layout, which they blame for falling sales. Others say the company has failed to crack down on mass-manufactured items, such as cheap imitations from China, that take traffic away from handmade goods.
Sellers such as Nici and RJ Laskin, a couple who offer handmade jewellery and guitar picks via Etsy and their own site, say they have been spending more time on other sales channels, as their Etsy sales have levelled off.
“Next year we’ll be focusing on our own website, on selling through new start-ups, and not putting all our eggs in one basket,” says Mr Laskin.
However, he does not see Amazon as Etsy’s main competitor.
Rather he is focused on a group of new, mobile-first shopping sites geared toward millennials, such as Wanelo, a social shopping aggregator.
The Laskins realise just one or two sales per week from Amazon, whereas they sell four or five items a day on Wanelo and dozens of items a day on Etsy.
Amazon Handmade has a similar look and feel to the rest of the company’s website, although it features personal profiles and pictures of its sellers just as Etsy does.
But Mr Laskin says that for sellers, the Amazon site has been awkward and difficult to use, as it prevents them from easily uploading their catalogues.
“For the amount of money Amazon has, and what they could have done, it has been a disappointment,” Mr Laskin says. “For me it is not a serious contender yet.”
Amazon has more than 10,000 artisans and 200,000 items on its handmade site. In response to questions about the catalogue uploading process, the company says it requires listing items one by one to maintain quality. “We recently surveyed all of our registered artisans and the listing experience scored favourably,” it says.
Amazon’s fees are higher than Etsy’s, as it takes a 12 per cent commission, compared with Etsy’s 3.5 per cent. Etsy also charges a nominal listing fee.
Ms Bays, the quilter, says she is not rushing to open a store on Amazon.
Like many Etsy sellers, she was selling on eBay before Etsy even existed, and eBay has been luring her back with free listings.
“Fortunately for me, I don’t depend on Etsy,” she says. “Etsy is for extra money and it is fun. If it is not fun any more, I don’t want to do it.”
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