Amazon Launches Handmade to Compete with Etsy

Etsy Inc that has been buffeted by a slowdown in growth and a stock price that is falling now will have to face a new foe known as

The online giant based in Seattle will launch on Thursday a new part of its site known as Handmade, which pointed directly at Etsy. Amazon recruited possible sellers to Handmade from Etsy.

While Etsy has a head start of 10-years in selling goods that are artisan made, Amazon has over 10 times the sites nearly 22 million active buyers, with an estimated 40 million willing to dish out $99 each year from Prime the program for unlimited shipping.

Amazon said it launched this new site with more than 5,000 sellers that will offer more than 80,000 items. The goods will appear in general searches on Amazon’s site and an Amazon spokesperson said close to 600 items would be eligible for the Prime program’s two day shipping.

Etsy has over 1.5 million sellers.

Amazon sellers will pay a transaction fee of 12%, nearly four times that of Etsy’s 3.5%, which includes a listing fee of 20 cents. That could drive potential sellers away from Amazon.

Etsy might seem a big vulnerable as it sputtered from the gate since April when it went public and has been tweaking some of its rules to allow its sellers to make some goods using manufacturers that are larger scale.

Shares of Etsy have plummeted over 53% since reaching their high of $30 on the first day they traded in April.

Other sites, said CEO of Etsy Chad Dickerson are really about convenience and price in a Wednesday interview. He added that Etsy does not put its products next to items that are mass produced.

Amazon said that a general search for a pair of earrings could yield results from both large-scale manufacturers and its Handmade artisans.

It also said it was designating a section of its website to the Handmade goods so consumers could seek those out by themselves.

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