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Amazon Takes On Etsy With New 'Amazon Handmade' Platform

5/26/15 11:27 AM EDT
Amazon (AMZN) is launching a handmade crafts marketplace to target online retailer Etsy. The ecommerce giant is attempting to lure Etsy (ETSY) sellers to its new platform, offering a first look at 'Amazon Handmade.' The targeted emails stated: 'We’re offering artisans like you a first peek at Handmade, a new marketplace for handcrafted goods,' and asked sellers to fill in an questionnaire detailing the kind of merchandise they dealt with. So far there has been no announcement regarding the price terms or launch date of the new venture. Amazon's latest project looks to be a huge blow to its smaller rival. The move comes shortly after Etsy announced its first earnings report, posting a net loss of $0.84 per share. The online marketplace saw its revenue jump to $58.5 million but losses were up from the previous year's numbers to $36.6 million. The company stock is now down about 43 percent since it began trading back in April. Etsy's 21 million customer base is dwarfed by Amazon's 278 million active users. Amazon also has the full power of its delivery capabilities to help launch it's artisanal goods platform. The retailer launched 'Amazon Prime Now' one hour delivery service back in December and reported a 24 percent growth in North American sales for the first quarter. Amazon has yet to announce its commission structure or shipping policies for Amazon Handmade, the retailer currently charges its third party sellers a 15 percent commission. Etsy on the other hand cuts more competitive terms, taking 3.5 percent of the listing price and a flat $0.20 fee per item. Critics of Brooklyn based Etsy have voiced concerns that the company alienated many of its sellers by growing and restructuring too quickly. Neither Etsy nor Amazon has yet commented on the latest developments.
Stocks in this video: AMZNETSY
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