Amazon Handmade vs Etsy: What’s the difference?

Amazon Handmade vs Etsy

If you’re already selling on Etsy then you may have thought of selling on Amazon Handmade too (if you haven’t then it’s something you should consider because diversification is seriously important in an ecommerce business – I talked about this recently on Youtube). You only need to look at what happened with the economy over the past couple of years to see that it’s good not to have all your eggs in one basket!

But it’s important to do your research when looking at selling on a new platform. Etsy and Amazon Handmade are both handmade marketplaces but that doesn’t mean they play by the same rules. They both come with different pros and cons and require different approaches.

In this post I’m going to look at Amazon Handmade vs Etsy; the major differences between the two marketplaces and what this means for you as a seller.

Pros and Cons of Etsy and Amazon Handmade

I currently sell on both Amazon Handmade and Etsy, and some products sell more on one platform than the other. I like selling on both, but there are some advantages and disadvantages to both. Let’s have a look at the pros and cons.

What is Etsy?

Etsy is an online marketplace specifically for handmade, vintage items and craft supplies. It also allows print on demand and digital download products. It started off as a small marketplace in 2005 but it has grown a huge customer base of 40 million customers and 2.5 million sellers !

As an Etsy seller, you can set up a storefront to sell your products, and ship them to countries all over the world. Compared to selling products from a market stall or your own website, the reach is massive and you can grow your sales really quickly. 

Pros and Cons of Selling on Etsy

Pros

1. Cheap to get started. Etsy has no monthly fee and you don’t pay anything until you make a sale. Once you have made a sale, the fees are quite cheap. This makes it quite a low risk option for getting started. 
2. Easy application process. Etsy’s application process is very straightforward, so you can be up and selling in a matter of hours.
3. Dedicated customer base. Etsy customers love buying handmade and crafty items on Etsy, and they get a massive amount of repeat purchases as a result. Etsy customers are also a lot nicer than Amazon customers, and rather than give you a bad review will often just give you some private feedback.
4. Etsy does some advertising for you. Etsy will do some external advertising for your products, which means your products get shown to customers via display ads. This can help grow your sales quite quickly.

Cons

1. Complicated fee structure. Whilst Etsy fees are a bit lower than Amazon’s, the fee structure is quite complicated as there are product listing fees, commission, credit card fees, payment processing fees, international sales fees, off site ad fees and others. 
2. Fewer customers than Amazon. Amazon handmade sellers have the advantage of Amazon’s massive customer base. Etsy has fewer customers, but the ones that are there are really committed to Etsy’s ethos.
3. No fulfillment options. Amazon offers FBA and Walmart offers Walmart Fulfillment services. With Etsy you have to handle all the shipping (and returns) yourself, which can be time-consuming. Having said that, FBA can be expensive, so it might not be the best option for you.

What is Amazon Handmade?

Amazon is the biggest ecommerce site in the world, with sales of well over $300 billion a year. It is bigger than many countries’ GDP and they have over 150 million members of Amazon Prime.

Amazon Handmade is a sub category within Amazon where sellers can sell handmade items. Amazon essentially started it to compete with Etsy, and the growth has been quite quick, with over many sellers making more than $1m per year in sales.

Pros and Cons of selling on Amazon Handmade

Pros

1. Loads of customers. Amazon has a mind blowing amount of customers, and as a Handmade seller you get access to this huge customer base. 
2. No monthly selling fees. When you sell on Amazon, there is usually a $39 or £25 monthly charge for a professional account. Amazon waives this fee for handmade sellers, which means you get access to all the Amazon tools for no monthly fee.
3. Straightforward fee structure. Amazon has one fee of 15% for each sale, which includes everything apart from any fulfillment fees if you’re using Amazon FBA. 
4. Amazon FBA. You can fulfill all your sales and let Amazon do the customer service for you. This means that your products can be shipped to the customer with next-day delivery. 

Cons

1. Competition can be high. Whilst Amazon Handmade is less competitive than Etsy, it is more competitive on Amazon’s general searches, as you’re competing against non-handmade sellers too. 
2. Fees are high. The fees on Amazon Handmade are higher than most other marketplaces, including Etsy. However, you do get a lot more traffic in return for the fee.

What is the definition of handmade on Etsy and Amazon?

What does handmade mean?

Amazon Handmade and Etsy have different ideas about what is classed as “handmade”.

Amazon Handmade has quite strict rules about what is handmade and what’s not. They have 3 different types of handmade which they’ll accept:

1. Handcrafted: Made entirely by hand.
2. Hand-altered: Existing products altered or adapted into a new design, for example, a denim jacket you paint or draw your designs on.
3. Handmade customized: For example, if you make jewelry and hand stamp initials on them per the customer’s request.

Etsy has a slightly more relaxed definition of handmade. It includes handmade goods, craft supplies (ingredients, materials and tools used to make something) and vintage goods which are 20+ years old.

Who makes the products?

In order to be accepted to sell on Amazon Handmade you will need to be an independent maker, working alone or preferably, with fewer than 20 friends, family members, or employees to create products or a collaborative group or co-operative.

When you apply to sell on Amazon Handmade you have to complete an application process stating which category you fall into and you’ll have to confirm that you do not outsource production to 3rd parties.

On Etsy you can be a maker OR designer:

• Maker: Someone who is physically making the items. You don’t need to be personally making every part of your product, you can incorporate elements that are not handmade and can have help from others.
• Designer: Someone who comes up with the design, template or prototype and then produces the product with an in-house team or through a production partner.

This means that you can outsource the production process to a 3rd party. Note that you still need to have been involved in the designing of the product. It’s NOT considered handmade if you buy scarves wholesale and then resell them in your shop.

Etsy clearly uses a broader definition of handmade but the big difference though is the checking process. On Amazon you will have to prove that your products fit into one of the three handmade categories whereas on Etsy there is no requirement to show how much of your products are actually handmade.

KEY POINT: Etsy allows a broader range of handmade goods on the platform but this is good and bad. You don’t need to go through the verification process you have with Amazon but you’ll be competing against a lot more sellers (and not all of them will be legit handmade sellers).

If you don’t qualify to sell on Amazon Handmade then you could consider selling in another category on Amazon. 

Categories

Etsy and Amazon also order their handmade products differently on their sites. Etsy groups handcrafted products in the following broad categories:

1. Jewellery & Accessories
2. Clothing & Shoes
3. Home & Living
4. Wedding & Party
5. Toys & Entertainment
6. Arts & Collectables
7. Craft Supplies & Tools
8. Vintage

Amazon Handmade has a narrower range of categories to choose from. These include:

1. Handmade Baby
2. Handmade Artwork
3. Handmade Pet Supplies
4. Handmade Toys & Games
5. Handmade Home & Kitchen
6. Handmade Sports & Outdoors
7. Handmade Beauty & Grooming
8. Handmade Jewelry & Watches
9. Handmade Health & Personal Care
10. Handmade Electronics Accessories
11. Handmade Stationery & Party Supplies
12. Handmade Clothing, Shoes & Accessories

KEY POINT: Etsy accepts a wider range of handmade products than Amazon. This is changing all the time though and Amazon is increasingly offering new product categories within Amazon Handmade.

What are the fees on Etsy and Amazon Handmade?

Both platforms charge a fee per sale, but a big difference between Amazon Handmade and Etsy is how they structure their fees. Amazon has a reputation for charging higher fees than Etsy and while it certainly takes a larger fee from each product sale (what it calls a referral fee), this is the only fee you pay. 

Etsy on the other hand charges a number of smaller fees which all add up. It’s worth looking at how all these fees compare:

In order to sell on Amazon, you will need to sign up to a Professional Selling Plan which comes with a monthly subscription fee of £25 for Amazon.co.uk ($39.99 for Amazon.com). But one of the perks of selling in the Amazon Handmade category is that Amazon waives this monthly seller fee so you don’t pay anything. Amazon doesn’t charge product listing fees, in other words, it doesn’t charge you a fee when you list a product on the marketplace. Instead, it charges a referral fee on each product you sell.  The current referral fee for Amazon Handmade products is 15% of the sale price. This is like Amazon’s commission, which it takes from each sale you make, in return for running the marketplace and bringing potential customers to your products.

KEY POINT: Etsy generally works out slightly cheaper than Amazon Handmade in terms of fees. But it’s important to check how the advertising fees which Etsy has introduced could affect your bottom line. 

Both Amazon and Etsy take multiple payment methods, but the payment processing fee varies, and only Etsy charge any fee to process payments.

How to register on Etsy vs Amazon Handmade 

The registration process and approval process is much more straightforward on Etsy, and you can be selling in hours. Amazon asks a lot of questions to sellers in order to get access to their  handmade market, as they are very strict about only allowing true handmade sellers onto the platform. Etsy’s process only takes a few minutes, and they are less strict about who is allowed to sell.

When will I get paid on Amazon Handmade and Etsy?

Amazon and Etsy also structure their seller payments differently and this can take some getting used to for new sellers. Amazon disperses payments to you every 2 weeks but you can request payments before that time if you need to, providing you have enough funds in your account.

When you sell on Etsy, your funds are available to you as soon as the transaction is completed and you can also request daily disbursements. 

KEY POINT:  For sellers who require payments to cover the cost of creating new products, being able to access your funds immediately through Etsy can be a real bonus. Having said that, I’ve always found the Amazon system useful for forecasting cash flow. Because it’s regular and Amazon shows you in advance what disbursement you can expect, it’s easy to plan.

Which is more competitive, Amazon Handmade or Etsy?

Amazon Handmade is far less competitive than Etsy for handmade items, which is a much more mature marketplace in terms of number of handmade sellers. There are actually only 1 million products listed on Amazon Handmade compared to a whopping 60 million products listed on Etsy.

Amazon Handmade is still a relatively new category and that combined with the application process means that it’s really not very competitive yet.

At some point, it may very well be as competitive as some of the more mature categories on Amazon but right now it’s still in its infancy and this offers sellers a fantastic opportunity to get in early. I talk about this in more depth in this video looking at competition on Amazon Handmade.

As I’ve mentioned Etsy allows a broader range of handmade products and types of sellers and this means there is a lower barrier to entry and more sellers as a result.

KEY POINT:  Amazon Handmade is much less competitive generally but it will depend on your product and it’s important to do your own research. You may find that your product is super competitive on Etsy and it’s really difficult to get onto page 1 while it’s not so saturated on Amazon Handmade and vice versa. 

Which has more customers, Etsy or Amazon Handmade?

Amazon is the largest ecommerce platform in the world by a long way, with the most customers and sales. Amazon operates in lots of different countries and has warehouses across the world. So you would think that Amazon Handmade would win this competition outright. However, not all of Amazon’s customers are looking for handmade products, whereas nearly all of Etsy’s customers are looking for handmade, customized or vintage products. 

Let’s have a look at a comparison of the customer bases.

How many customers does Etsy have?

Etsy has 82 million active customers, and the number of customers has gone up significantly in the last year. Most Etsy customers are looking for gifts or customized products such as greeting cards, t-shirts or other print on demand products. 

Etsy has a huge spike in traffic around particular events or holidays, such as Christmas, Mothers Day or 4th July. 

For Etsy, the largest markets are the USA and UK. There are sales made in Europe and Australia, but not as high as the US and UK.

How many customers does Amazon have?

Amazon has a huge customer base of over 200 million prime customers, and over 300 million active customers worldwide. Amazon’s largest market is the US, followed by Germany and the UK. Amazon also has strong sales all across Europe, Japan, India, Australia and other territories. 

There was a study made showing that 9 out of 10 people in the US used Amazon at least once in the last year. This is an unbelievable statistic, which shows the power Amazon has.

Which is better for Handmade sellers, Amazon Handmade or Etsy?

Etsy is dedicated to handmade sellers and has a very loyal customer base. Amazon Handmade sellers have the advantage of being able to sell their products to Amazon’s enormous customer base. 

If you are just starting out, Etsy is probably a bit easier. However, it isn’t that much work to sell on both, especially if you use FBA, using something called Multi Channel Fulfillment, which I talk about more in this video.

What are the fulfillment options on Amazon Handmade and Etsy?

One of the perks of selling on Amazon Handmade is Amazon’s FBA programme. When you sell on Amazon you have 2 main options for fulfilling your orders – you can either fulfill your orders yourself from your location (known as Fulfilled by Merchant or FBM) or you can pay Amazon to fulfill your orders for you (known as Fulfilled by Amazon or FBA).

Fulfilled by Merchant (FBM)

If you choose Fulfilled by Merchant you will be responsible for storing your products, packing and shipping them to your customers, as well as handling returns.  If you sell custom products or made to order then this is the fulfillment option you would choose. You can choose your shipping options in the back end of Seller Central. You can also charge the customer shipping fees, or you can choose to have the shipping free and absorb the shipping cost into your profit margin.

To help with managing your orders, Amazon allows handmade sellers to set production times in your listings so that customers have a clear timeframe for when they can expect their products, giving you plenty of time to produce and send the products.

Fulfilled by Amazon (FBA)

One of the major advantages of selling on Amazon is that you get access to Amazon’s amazing fulfillment network through the FBA programme.

If you sell via FBA, then Amazon takes care of product storage, packing, shipping and returns. You simply ship your products in bulk to Amazon’s distribution centers and from there Amazon will take over distributing products to customers and handling returns.

If you use the FBA programme then you will pay an FBA fee and storage fees and these will be automatically deducted from your payments from Amazon.

The fees for selling via FBA often work out cheaper than storing and sending products to customers yourself, plus it’s a lot less work! If your products are fulfilled via FBA then they will also be eligible for Prime which gives you a significant advantage over sellers who don’t offer Prime delivery.

Many customers will specifically look for sellers offering Prime delivery/free shipping, particularly during busy buying periods like Christmas, so you have the potential to make a lot more sales

Using FBA also means that you can easily sell your products in international markets regardless of where you are based.

Through Amazon FBA, a UK based seller can sell on Amazon.com and sell products to US customers by shipping products in bulk to an Amazon distribution center in the US.  This is what I do, and it’s incredible when you think about it.

This is a really easy way for sellers to expand their business and build a global customer base without all the challenges that come with building an international fulfillment network. It can be absolutely game-changing for a small business.

On Etsy, you are 100% responsible for storing and shipping your products to customers. Selling to customers in international markets can be very expensive and time-consuming and doing it at scale is simply not an option for a lot of handmade sellers.

KEY POINT: If your products are customized then you would most likely fulfill your products yourself regardless of whether you’re selling on Etsy or Amazon Handmade. However if you can use the Amazon FBA programme then it can be a seriously good way to expand your business and free you up to focus on creating products rather than handling fulfillment. 

Application process

What is the sign-up process on Etsy and Amazon Handmade?

As I’ve mentioned you have to go through an application process to sell on Amazon Handmade and so it can take longer to get set up than it would on Etsy. On Etsy there is no verification process, you just enter your details and you can start selling almost immediately.

For more information on Etsy, check out my guide on how to set up an Etsy shop. 

The application process for Amazon Handmade takes a bit longer and you also need to register for an Amazon seller account if you don’t already have one.

First you need to create a professional seller account – this can take a bit of time but it’s pretty straightforward (I cover this in detail in this comprehensive guide to getting set up on Amazon Handmade). Once you’re registered as a seller then you can sign up to sell on Amazon Handmade. To register as a seller you need some documentation including government issued ID, bank statement and credit card. I go through that more in this mega guide about Amazon Handmade

Before you begin, log out of your Amazon account and make sure you have the following ready:

1. A short summary (around 120 words) describing how you make your products and what materials you use.
2. Images of your products, production area and process in JPEG format

Then start working through the multiple choice questions about you, your products and your production process before uploading your summary and images.  If you would like some help with creating your summary, download my Amazon Handmade application template here.

You should hear back from Amazon within a couple of days although it can take up to 2 weeks sometimes, so don’t panic if it takes longer!

KEY POINT: Amazon Handmade makes you jump through more hoops than Etsy. But although it takes longer to get going, it keeps the marketplace less competitive so it’s worth the effort as far as I’m concerned. 

Which is easier to use?

Etsy’s backend seller software is called Etsy Shop Manager, and it is really straightforward to use. You can use the tool to easily see everything about your store, including the sales and statistics, advertising spend and anything else you need to know about your store. It is all self explanatory and you don’t need any expert knowledge to use it.

Amazon’s Seller Central on the other hand can be very confusing if you are new to online selling. Once you get used to using Seller Central it is very powerful, but at first it can be quite scary. For first time sellers, Etsy will be much easier to get your head around, which is one of the reasons I recommend new sellers start on Etsy.

Both have an advertising platform you can use to promote your products, but the advertising tools on Etsy are much more basic and limited than Amazon. However, on the plus side, Etsy’s advertising tools are much easier to use. 

Can I do customization on Etsy and Amazon Handmade?

Etsy allows you to do customizations for many things such as adding names and dates, changing colors and sizes, choosing materials and many other options. If you are selling custom items, then Etsy is a great place to sell them as customers love buying customized products on Etsy.

Amazon Handmade also allows customizations, but it is not as well known by customers. The options for customization are a little bit harder to access and the back end selection tool is a bit more clunky to use. But once you have got the hang of Amazon Seller Central, you shouldn’t have any problems. 

This is another scenario where both Amazon Handmade and Etsy are good options, and you should be selling on both platforms.

Etsy and Amazon Handmade Software options

Amazon has more software options for doing product research, writing listings and tracking your sales. My favorite tools are Helium 10 and AMZscout for doing product research and Sellerboard for tracking my sales. Helium 10 is the best tool, but it is a little expensive for some people. AMZscout is a great alternative if you are starting out. These tools help you to do keyword research and also show you the sales of your competition on Amazon, so you can get an idea of whether the niche is a good one or not. Sellerboard is really great value, and it gives you a really good breakdown of all your sales and all your fees. It will make end of year accounting so easy, plus it helps with cash flow, and I use it every day to track my sales.

Etsy has fewer software options to help with Etsy SEO and product research, but that is changing. The best tools I have found are Alura and Etsy Hunt. Both of these tools help sellers with their product research dn tracking sales. They also help you to write listings and find the best keywords to target. The good thing about Etsy software is it is much more affordable than Amazon software. 

Overall Amazon has more options for software, but the options are a little more expensive.

Summary

It’s really important to diversify your business so you’re not reliant on one platform. Amazon Handmade and Etsy are both great places to sell your handmade products and they both have different advantages.

For example you might like Etsy for its faster payment terms while you might find Amazon Handmade’s FBA programme really useful for growing your business.

Make sure you weigh up the pros and cons and adapt your approach so you make the most out of both marketplaces.

If you found this interesting, you might like my in-depth video on Etsy vs Amazon:

https://www.youtube.com/watch?v=hlA1Zt_boJI

If you found this interesting, you might like my in-depth video on Etsy vs Amazon: