“Handmade at Amazon” launched today, October 8, and though much of the coverage of today’s storefront launch portrays it as a competitor to Etsy, Handmade at Amazon is a very different business. In our opinion, it could prove to be more complementary to Etsy than competitive.

Background

Last May, we first shared the news that Amazon would be launching a store-front focused on handmade crafts. In that analysis, we explained how Handmade at Amazon would likely differ from Etsy, the decade-old host of handmade craft “seller” shops and the dominant player in the online handmade craft niche.

Now that Handmade at Amazon is live, it’s even more clear that Amazon and Etsy are vastly different. (First off, the URLs you’d intuitively use to visit Handmade at Amazon aren’t going to work.)

Of course, the “Etsy-killer” angle is the focus of much of the news coverage of today’s launch.

Handmade at Amazon by the numbers (at launch)

80,000 | Number of items for sell
5,000 | Number of sellers
60 | Number of countries represented among the artisans

Handmade at Amazon seller requirements

• Artisans must give details of their manufacturing process.
• Artisans must disclose tools and machines they rely on.
• Outsourcing is not allowed. (In certain cases, Etsy does.)

Sources: NYTimes.com, Amazon.com

The notion that Amazon’s revenues from selling handmade crafts is a zero-sum game in which Etsy must lose an equivalent amount of revenues is misguided.

When you take into consideration the thousands of craft shows that take place each weekend across the globe, you begin to understand that slicing up a finite pie is not the economic factor at work here. And even online, the marketplace of crafts found on eBay is a part of the pie that doesn’t fit within the simple Amazon vs. Etsy narrative. Amazon’s entry into this marketplace could grow the pie or help shift craft selling and buying from city parks to the web in a more rapid fashion than Etsy alone could do.

Amazon is an online retailer, Etsy is a craft entrepreneurship ecosystem

Or, “Why Handmade at Amazon and Etsy aren’t head-to-head competitors.”

• Etsy is the nexus of an entire culture and community of crafters who view Etsy as a business, not merely a hobby.
• Etsy is a community with a decade-old culture in which sellers-helping-sellers is a part of the DNA.
• Etsy sellers are already free to sell via multiple channels. Amazon is another channel. It doesn’t have to be viewed as another home base.
• Most of the major Etsy sellers have their own websites where they can sell handmade products directly to customers.
• Etsy even helps sellers find new channels of distribution though such means as Etsy Local that lets craft shoppers know what upcoming events specific Etsy sellers will be attending and Etsy Wholesale, that enables sellers to distribute through shops and other small retail merchants.

(Read our earlier explanation of Etsy’s entrepreneurship ecosystem.)

Why is Amazon doing this?

Handmade at Amazon is part of a trend in which the online giant is creating its version of any buyer-seller online marketplace that any other company proves will work. (This dates back to Amazon’s attempts to compete with eBay’s auction model.) Recently, we provided examples of this trend with reports on Amazon’s Home Services on-demand marketing service and Amazon Exclusives, a gadget and invention marketplace that is somewhat similar to Handmade at Amazon.