Amazon vs. Etsy: what is your best option as a handmade seller

If you want to get the items you create to a wider audience, but you don’t want the hassle of creating and maintaining your own online store, you may want to list them on the two biggest ecommerce platforms or artisans and markers: Amazon Handmade and Etsy. 

Which one is best for selling homemade items? How much do they cost? And what are the benefits or drawbacks of each? Here we compare Etsy vs Amazon so you can decide which one may be right for you. 

Amazon handmade for creators

Amazon Handmade is a part of Amazon’s massive online marketplace but geared specifically to sellers of homemade items made by Artisans. 

With Amazon you’ll have access to millions of potential customers worldwide, including 150+ million Prime members globally. 

As a new Amazon seller based in the U.S., you also have access to 12 months of free 1:1 onboarding support from Amazon account managers, and access to more than 6200 Amazon-vetted service providers and tools. 

Amazon also waives certain fees for Handmade sellers and provides additional free tools, including a custom store and enhanced product listings. 

How to sell handmade on Amazon

You’ll need to set up a Professional Seller account. Amazon waives the normal $39.99 monthly fee for businesses that qualify for Handmade, after the first month. 

After you create your selling account you can apply for Handmade. Amazon says it vets these sellers to help ensure goods are genuinely handmade. The application process can take a while; some sellers say they have waited weeks or a few months to get their approval.  

Once you are approved you can create a free shop on Handmade to sell your goods. 

To do that, you’ll need to create your product listings and upload high quality images to help sell your products. Handmade sellers can apply for the Brand Registry waiver and, if approved, will get access to Amazon’s A+ Content, which offers more detailed listings, and their own Amazon Store. (Normally these benefits are only available for sellers approved for the Amazon Brand Registry program, which requires a pending or approved trademark.) 

Once someone buys one of your products you’ll need to get their order to them. You can do it yourself, choose a third-party e-commerce fulfillment service (3PL), or use Fulfillment by Amazon (FBA) to manage the fulfillment of your Handmade goods. Amazon FBA makes your products available for Amazon Prime and Amazon handles customer service requests. 

Note that in the past, Amazon offered sellers the option to participate in Seller Fulfilled Prime, which allowed them to offer free Prime shipping and fulfill orders themselves. This program is currently paused to new applications. 

Amazon seller fees for handmade store owners

So how much will it cost you to sell on Amazon Handmade? 

Amazon Handmade requires you open a Professional selling account which normally costs $39.99/month. This monthly fee will be waived after the first month for approved Handmade applications.

Whenever you make a sale, Handmade will deduct a flat 15% referral fee. There are no additional listing or payment processing fees. 

If you also choose to use Fulfillment by Amazon (FBA) to fulfill orders,  keep in mind that FBA has its own fee schedule. You can use Amazon’s free revenue calculator to help determine if it’s right for you. As a new seller, you may be eligible for free storage and liquidations on your first 50 orders. 

You can also complete Amazon Brand Registry to be eligible to earn a 5% bonus on up to $1,000,000 in eligible branded sales (up to $50,000 in bonus value). Amazon Brand Registry is designed to help sellers protect their intellectual property (IP), and it’s free. (It requires a pending or current trademark, depending on country requirements.) 

New Amazon sellers may also be eligible for a $200 credit for sponsored products and a $50 credit for coupons along with other discounts and perks. 

Amazon handmade ratings: what you’re rated on

Amazon sellers are judged by performance metrics and customer reviews. 

Performance metrics include: 

• Order defect rate (a measure of a seller’s customer service standards): < 1%
• Pre-fulfillment cancel rate (cancellations initiated by the seller before shipment): < 2.5%
• Late shipment rate (orders that ship after the expected date): < 4%

You’ll be able to monitor these in your Seller Central account. 

Amazon customers can leave ratings and reviews for products, even for ones they have not purchased through Amazon. Amazon uses a 5-star rating system, where 1-star is the lowest rating and 5-stars is the highest. Amazon says it does not average ratings submitted, but instead uses its own proprietary methodology which it does not reveal in detail.

It also says it doesn’t consider customer ratings that do not have an Amazon Verified Purchase status (meaning it’s verified that the customer purchased the product through Amazon) unless the customer submits additional details. 

However, there have been complaints and concerns about fake customer reviews in the past, and given the volume of listings and reviews on Amazon this will likely continue to be a problem for some sellers. 

Pros and cons for Amazon handmade sellers

Etsy storefront

Etsy offers an online marketplace for selling handcrafted items and vintage goods. You must create or design the handmade items you sell on Etsy. (You can partner with a manufacturing partner.) You can also sell vintage items that are more than 20 years old. 

Finally, craft supplies or party supplies may be handmade, commercial, or vintage.

How to start a store on Etsy

It’s quite easy to start an Etsy store to sell eligible items. Etsy offers a helpful step-by-step guide for opening an Etsy store.

Basically, you’ll start by signing up for an Etsy account. You’ll choose a name for your Etsy shop, and then stock your shop with the products you want to sell. You’ll also need to add your payment and billing information so Etsy can charge you fees, and so you can get paid when items sell.

Once you make a sale, you’ll need to get the purchase to customers, either by fulfilling it yourself or using a 3PL firm. You’ll need to state your shipping policies and shipping prices; Etsy offers tools to help you navigate this. 

Etsy seller fees

There are three types of Etsy fees. First, Etsy charges a $.20 listing fee per item. 

When you sell an item, Etsy takes a 6.5 % transaction fee plus a fee of 3% + $.25 for payment processing. 

Etsy may also advertise your product outside Etsy and if a sale is made from one of those ads, there is a 15% offsite ads fee. (Smaller stores can opt out.) 

You’ll let buyers know shipping costs, so you may be able to pass shipping costs to your customers. However, many customers expect free shipping, so Etsy gives you an option of offering a free shipping guarantee for orders of $35 or more within the US. (It offers a smart pricing tool to help you set prices to include shipping.) This will affect your profits even though it’s not a direct fee from Etsy. 

Etsy also has an optional program called Etsy Plus that charges a $10 monthly subscription fee in addition to any selling fees. It offers more shop customization options, the ability to email customers when items are back in stock, a custom web address, and bonus listing and advertising credits. 

Etsy reviews: what you’re rated on

Buyers may leave reviews using a 5-star system with 5 stars being the highest rating and 1 the lowest. Unlike Amazon, buyers may only leave reviews if they purchased the item through Etsy. They have 100 days to leave a review. 

Your score is an average of the star ratings received from buyers. Sellers are allowed to respond to reviews of 3 stars or less. 

Pros and cons for Etsy store owners

Key differences between Amazon and Etsy seller platforms

You’ll find entrepreneurs who are adamant that Amazon Handmade is the best platform for makers who want to start an e-commerce business, and those who take the exact opposite position. Retailers have found pros and cons for each platform. 

Overall, Amazon tends to attract more price-sensitive buyers who want things quickly. Even with Handmade items, customers may expect an “Amazon experience” overall with free, fast shipping. 

Etsy shoppers tend to value unique items made by individuals. They may be more willing to wait for something unique or made to order. 

Competition is fierce on both platforms. Sellers have complained of copycats of successful products on both Etsy and Amazon. Each platform has an increasing number of sellers competing for similar customers, and standing out while keeping prices competitive can be a challenge. 

Here are some key differences in these two e-commerce platforms: 

The bottom line: Etsy Vs Amazon

Both these platforms can make it easy for small business owners to create their own ecommerce company without having to create and maintain their own website, online store, manage payments, etc. It is inexpensive to get started, so you don’t have to arrange ecommerce financing, except perhaps to finance the cost of materials.

In addition some retailers have created a successful retail strategy by using these stores in a strategic way; for example, by selling items on their own website, and offering slow-selling items for sale at a discount on Amazon. 

Keep in mind you don’t have an exclusive with either platform. If you have the time and energy you can set up a store on both Amazon and Etsy, and compare your experience with each.