Handmade at Amazon deals a blow to Etsy
- Amazon on Tuesday announced that products from artisans selling through its Amazon Handmade marketplace, the company's answer to Etsy, will be available for delivery through its Prime Now one- and two-hour delivery service, available in certain cities.
- Amazon Handmade goods are available for the delivery as of Tuesday in Austin, Brooklyn, Manhattan, Minneapolis, Phoenix, Portland, OR, Raleigh, San Diego, the San Francisco Bay Area and Seattle through the holiday season, according to a company press release.
- Last minute shoppers can order gifts from Amazon Handmade Artisans for delivery until 11:59 p.m. on Christmas Eve, the company also said.
Amazon's move to include its Amazon Handmade artisan sellers to the swift Prime Now delivery services comes as rival Etsy, which innovated an artisans marketplace 12 years ago but has struggled since its initial public offering two years ago, is increasingly facing investor pressure to turn around.
In May, private equity firms TPG Group Holdings Advisors and Dragoneer Investment Group revealed significant stakes in the company, which were purchased "on the belief that they were undervalued," and the firms noted in a Securities and Exchange filing dated May 4 that they had "contacted representatives of Etsy to offer to engage in discussions regarding strategic alternatives."
That came after the marketplace retailer replaced Chad Dickerson with Josh Silverman as CEO, likely a response to hedge fund Black-and-White Capital, owner of 2% of Etsy's shares, which had released two letters highlighting critical issues and necessary steps to address them back in May. Layoffs in May and June brought the total planned staff cuts at Etsy this year to 230 positions, or 22% of its workforce.
Etsy has already seen good progress in its turnabout effort. The company said that its third quarter gross merchandise sales rose 13.2% year over year to $766.4 million, reflecting growth of 140 basis points from the second quarter following the launch of new features and tools, as well as 10.8% year-over-year growth in active sellers and 16.7% year-over-year growth in active buyers.
Of course, Amazon, backed up by its wider retail, marketplace and cloud services operations, doesn't face the same investor pressure over its smaller crafts unit and doesn't even break out those sales. But Handmade at Amazon has been a thorn in Etsy's side since the e-commerce giant launched it two years ago. While Etsy struggled with accusations that its marketplace had become replete with counterfeit and mass-produced products, Amazon established a strict hand-made credo from the get-go. Another symbolic blow was crafts maven Martha Stewart passing over Etsy when she left eBay, in preference for the Amazon site. Handmade at Amazon has expanded apace, moving into five European countries last fall to take on Etsy overseas, and now offering Prime Now delivery.
The Prime Now delivery option could be a further boon to Handmade sellers as the holiday season ramps back up after the blockbuster Black Friday weekend. Those sellers already benefit from Amazon's free two-day delivery for Prime members, much faster than most Etsy sellers (many of whom also sell at Amazon).
"Amazon is thrilled to continue expanding on our commitment to small businesses and artisans who can leverage Amazon's last-mile delivery technology to get their handcrafted items to Prime members in an hour or less," Stephenie Landry, vice president of Prime Now, said in a statement. "This holiday season, customers can shop an even greater selection of handcrafted, giftable items and have the products delivered through Christmas Eve — the ultimate solution for those procrastinators who still want to get a unique, quality gift for their loved ones."
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