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Etsy Vs Amazon | An In-Depth Comparison

by | Oct 30, 2018 | Business

Disclosure: Some of the links below may be affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase. This goes to help support me and The Success Mountain website – which I am so thankful for!

Choosing a platform is one of the most important decisions you’ll make when you first start your online eCommerce business.

And with all of the different ecommerce options out there, which one is right for you?

Well, if you’re a creative entrepreneur selling handmade products for your business, you’ll consider the top two specifically created for you.

Luckily, this post compares Amazon vs Etsy in-depth to help you make the right decision for your company.

Will you choose Etsy where the competition is increasing but a higher product standard resides?

Or will you choose Amazon, with their built in customers but with a larger fee cost per product, cutting into your profit margins?

We’ll cover the pros and cons of these two platforms, and outline the information you need to determine which platform to start with.

It’s also increasingly important to stay informed and learn about each platform, and perhaps choose more than one platform to operate on.

The importance of diversifying your platforms can save your business in a rough patch.

What if you get suspended on Amazon, who’s known to easily suspend but not easily forgive for minor errors, often a mistake you never made?

What if the competition on Etsy starts to trump the traffic you get to your store, lowering your sales?

Even Steve Chou from My Wife Quit Her Job calls that gambling

Building a contingency into your business could mean life or death for your company if you’re a small business owner – so it’s important to consider the facts. Let’s start with Amazon, and go over all the different optiosn available with it. THen we’ll cover Etsy and all of it’s pros and cons as well. Finally, we’ll finish off by comparing the two.

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The Amazon Platform

Amazon’s focus is bigger brands and large volume online stores. This means you as the seller gets access to their 95 million customers all over the US to sell your products to, meaning your business could experience exponential growth and customer familiarity as time goes on.

After all, all legitimate companies are on Amazon, right?

There’s actually quite a few different programs that Amazon offers to sell on. You can choose to sell on Amazon Handmade, or through Amazon FBA, or you could just use a regular Merchant-fulfilled account.

We’ll outline all of these in detail in this section. We will cover:

– The different Amazon programs
– The different Amazon accounts
– How much it costs to sell on Amazon
– What are the options for listing on Amazon?
– What payment options are available?
– What is it like shipping products on Amazon?
– What happens when a customer wants to return something they bought from you on Amazon?

What are the different Amazon accounts available?

There’s a difference between Amazon accounts, and Amazon programs. When you first set up your Amazon account, you’ll need to decide between an individual sellers account, or a professional sellers account.

Then, you can decide which Amazon program to sell through.

Should I get an Individual or Professional Amazon Sellers Account?

Individual Selling Plan:

This plan does not have a monthly fee associated, while the professional selling plan does.

The individual seller plan is good for you if you want to sell a smaller amount of products per month, or if you are just starting out.

You can sell up to 40 items before you are required to upgrade to the professional selling plan. The fee is $1 per item, so it works itself out if you upgrade to a professional plan.

You are not allowed to have an individual selling plan if you sell with Amazon Handmade, only for FBA.

Professional Selling Plan:

This plan requires a $39.99 monthly fee, but this ends up being a wash. If you sold 40 items exactly on the individual selling plan, with a $1 fee charged per item, it would also be $40

But good news! Currently through December 31, 2019, your professional selling plan subscription fee is waived for Amazon Handmade artisans!

This means if you end up selling in other  categories other than Amazon Handmade, you will be required to pay the $39.99 monthly fee.

Click here for more information.

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Next, Let’s Discuss Each Amazon Program

After choosing your account, you’ll then decide what program to join. There are 3 main programs available.

I won’t be discussing Amazon Merchant-Fulfilled because the Handmade program uses the same MF shipping style in most cases. The only difference with Merchant Fulfilled is that you are allowed to sell in any ungated category, in other words, you don’t need to sell handmade products to ship items yourself. 

Amazon Handmade

Best for Etsy sellers coming over to sell on Amazon. You are required to have handmade items only. Amazon is currently waiving the $40 fee for artisans. You pay shipping costs and an item fee. This method requires more work than FBA because you are shipping your own orders.

Amazon FBA

Ship your items directly to Amazon where they will be housed until your customer places an order. They then ship the item to the customer for you and handle all returns and customer concerns. This costs $40 a month plus extra fees for items, shipping and customer service, but is relatively hands-free.

Amazon MF
(Merchant-Fulfilled)

You house the items until an order is placed, where you then ship the order like you normally would. You pay shipping cost and item fees, but do not have to pay a monthly fee.  This method requires more work than FBA.

Amazon Handmade

Amazon is the  biggest conglomerate for selling ecommerce that currently exists. Even older eBay can’t compete with Amazon nowadays. But does that mean it’s good for selling your handmade goods or promoting your boutique?

Amazon Handmade means strictly products that are made entirely by hand, hand-altered, or hand assembled (not from a kit). Amazon is strict when they say your products must be made from a team of less than 100 people. Anything mass-produced will be rejected. This is Amazon’s way of protecting the Amazon Handmade category on their website.

You can access the most up-to-date requirements for the Handmade program here, but the main requirements will likely stick around:

– To be considered an artisan, you must work alone or with less than 20 members

– You must be making or designing your products yourself

– Products can’t be mass produced using an automated mechanical process. You are also not allowed to outsource productions, but you can use hand tools and “light machinery” such as printers. You ARE allowed to use printing machines for things such as art prints or stationary – but there are some category specific policies you must follow

– You can let customers customize their products to allow for a more custom customer experience (say that 5 times fast).

– You can take advantage of Seller Fulfilled Prime to get the Amazon Prime badge, one of the biggest benefits of selling on Amazon to begin with. To do this, you will need to go through a trial period of shipping your products on time.

– Amazon will take care of your customers and all customer support, as well as returns.

– You are allowed to use their Amazon affiliate program to gain a commission for items bought and clicked through you website in conjunction with your products selling on Amazon – aka, double dipping.

– The seller support team can help you with any problem or issue you have.

– Your customers can choose gift-wrapped and gift message options (professional seller account only).

– Not everyone on Amazon wants a specifically handmade or kitschy product, and if you want to scale your company to include anything else that’s not handmade, you will need to change to a regular FBA account which requires you to pay the $39 fee. 

– You do have more requirements than Etsy to keep your account health up – just because Amazon is very particular about their service and taking care of their customers, naturally.
This means you can’t have low marks on your account. Amazon monitors things such as a high cancellation rate, order defect rate, or late dispatch rate.

– You must also respond to customer messages within 24 hours or less.

– There are some limited categories that you can sell in Amazon Handmade versus regular Amazon FBA.

– Strict shipping requirements to keep your prime badge, if you opt for the Seller-Fulfilled Prime program.

Rumor has it that the max amount of production time that you can put in your account is 30 days

Amazon FBA

Coming with a variety of categories on Amazon, you can choose to sell your print on demand products using the FBA program.  Paying more fees, you get benefits such as Amazon shipping your products for you, and taking care of customers.

– To get an account, you must sell only in particular categories.

– You will need to have an individual social security number or EIN number to set up an account for tax purposes

– You must keep your account in good health otherwise you will lose time in the buy box (the main box that sellers rotate through on a product listing).

– Your products are picked packed and shipped by Amazon for a fee, so you don’t have to worry about shipping every order, or worry about speaking with customers about returns.

– You get access to the Prime badge

– You get increased buy box exposure (if your item has multiple sellers – but if you’re selling on Handmade you should have no additional sellers hop onto the listing)

– FBA is great for increased volume of products with their simplified structure and processes.

– The program costs $39.99/month + other additional fees

– The fees can be steep depending on your profit margin, which include picking and packing, weight handling fees, storage fees, and order handling fees.

– You don’t have control over your customers experience, because the packaging will likely not be up to the same standard as a carefully packed product like an Etsy order.

– You won’t be able to ask for your sale funds until the Amazon payout date, which is every two weeks unless you use a software progrma called Payable which requires you to pay a percentage of your profits to pull out the funds before your “pay date”.

Next, let’s discuss the fees and costs with Amazon’s programs.

How much does it cost to sell on Amazon? This is where things get a bit tricky.

Overall, you have a monthly subscription fee, referral fees, and FBA fees. If you don’t have FBA, you will have one additional fee in place of that. It sounds like a lot but honestly it’s not too much. Arguably, you are getting a lot more in return for paying these fees.

Monthly Subscription Fees

Professional Selling Plan: $39.99/month

Individual Selling Plan: No subscription fee

Referral Fees

The fee you pay after you sell a product on Amazon. This may depend on category.

For Amazon Handmade – 15% Referral Fee (minimum $1.00)

Amazon Fulfillment (FBA)

These are fees such as pick, pack and ship fees, shipping and handling, customer service and product returns.

These are often pennies on the dollar. It’s usually less expensive to have Amazon do this than to pay a fulfillment center or to do it yourself.

For example, for normal sized items:
1 lb or less – $2.41-$3.19
1-2 lbs – $4.71
2+ lbs – $4.71
+0.38/lb over the first 2 lbs

Over-sized items have an increased fee structure and there are quite a few exceptions of fees per category.

Non-FBA Fees

This fee is only if you have an individual seller account and don’t pay the monthly account subscription.  This is $1.00 fee per item you sell.

Storage Fees (FBA)

If you have slow moving products, you eventually will be charged a storage fee calculated per cubic square inch of space that you store your products in Amazon’s warehouse.

Storage fees increase around the holidays due to the volume of Q4.

If you sell on Amazon Handmade, you will be merchant-fulfilling your products. The fees below reflect the prices of shipping your sales.

 Shipping costs vary depending on weight and size, of course.

 The $39.99 monthly fee for a professional sellers account is waived for artisans using Amazon Handmade until Dec. 2019!

 There is no fee for your listings, unlike Etsy!

 There are resources to go to such as the Fulfillment by Amazon revenue calculator that you can search your charges for using FBA or merchant-fulfilling your products, before you sell them.

 Also, for a more in-depth look at the fees and their structure, with examples, you can read these additional resources below – I couldn’t have said it better myself! 

 Fit Small Business talks Amazon Fees

Fundera on Amazon Fees

JungleScout, a leading software program in the Amazon web space, explains fees in depth

What’s it like listing on Amazon?

Listings on Amazon are free, and they never expire, unlike Etsy!

The products are assigned an ID, called an ASIN, and it’s what Amazon uses to assign products codes.

When you want to upload or update a listing, you can click into the listing and make limited changes. Often, you will have to contact Amazon Seller Support in order to change information in the listing, unless you are the owner of the listing.

You can promote your listings using the Sponsored Products advertising program.

You don’t need to have a UPC or barcode to sell your own handmade products, which saves you money.

For regular Amazon FBA sellers (non-handmade products) you will need to have a UPC code or GTIN exemption for any products or bundles you sell.

Do I really need photos with white backgrounds for my products on Amazon?

When researching for this post, I did find a discrepancy where Amazon mentioned that Handmade sellers don’t need to have photos with white backgrounds. Then in another post on Amazon they said Handmade artisans do need to comply with all listing guidelines, including photographs.

I expect Amazon might change this at some point – so I recommend getting high quality white background photographs for your products, to avoid problems.

(source)

How Shipping on Amazon Works

What’s it like to ship packages to Amazon FBA?

Arguably one of the best (if not the best part of Amazon FBA) is that Amazon fulfills your customers orders. No having to make sure your orders are out every day, no talking with customers about shipping problems anymore.

Instead, Amazon does this all for you!

To do this, you create a new shipment in your Seller account, pack the boxes and tell Amazon what you’re sending in each box. Amazon generates a shipping label for you, and you slap a label on your items and on the box, and drop it off! It’s that simple. You even get to use Amazon’s UPS and FedEx shipping discounts.

ProTip: If you use UPS, you can request UPS to give you free shipping labels (the sheets with two shipping stickers on each page).

What’s it like to ship orders using Merchant-Fulfill or Amazon Handmade to customers?

Amazon has matched Etsy’s shipping guides, making it easy for sellers to choose production processing time for your products. As a handmade artisan seller, you can set up to 30 days of production time for each of your product listings to allow for order creation and prepping.

If you’re shipping orders yourself, you create your shipment in your Amazon account, and utilize Amazon’s partnership with UPS or FedEx to print out a shipping label with the order information. Voila!

If you want to use the Amazon Prime badge for your products, you will need to go through a trial period to prove to Amazon that your products will arrive within the Amazon Prime’s 2-day shipping window.

If you would prefer not to ship yourself, go ahead and use the FBA program. 

Customer Service & Returns

Amazon Handmade Returns and Customer Service:

You can choose your own return policy for handmade and customized products, but you must accept returns within 30 days of purchase.

You aren’t required to accept returns for products that are customized unless the customer informs you within those 30 days – it’s all up to you!

Amazon FBA Returns and Customer Service:

For FBA, there’s no messy returns or customer conversations.
And, you don’t need to worry about shipping orders immediately each day.

Since you’re using the FBA program, you can simply ship orders off once a week or however often you want to keep in stock, and Amazon takes care of the rest. Every once in a while you’ll get a message from a customer, but it’s not often, since Amazon’s got that covered.

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The Etsy Platform

The audience for Etsy is targeted directly towards looking for handmade items. The customers who are on Etsy aren’t looking for paper towels or dog food, they’re looking for crafts, vintage items, and customized pieces.

Etsy’s audience is recorded to have  33 million buyers, which means millions of customers ready to buy a highly-customized customer experience from you, the artisan, who can give them an experience that they simply can’t get using Amazon FBA, although you could mimic the packaging experience if you ship items yourself using Amazon Handmade.

Here’s what we’ll cover in this section:

– How much it costs to sell on Etsy
– How do listings on Etsy work?
– What payment options are available?
– What is it like shipping products on Amazon?
– What happens when a customer wants to return something they bought from you on Amazon

What are the different pros and cons of Etsy?

Pros:

Although the Etsy Wholesale platform was recently closed in June of 2018, you can still offer retailers a wholesale buying experience through Etsy. You aren’t able to do that on Amazon itself. Selling wholesale as a business owner can mean larger volume orders, repeat customers and a whole lot of orders to ship. But it’s the next step in scaling and growing your online business, right next to marketing at tradeshows and conferences.

Etsy gives you your sale funds directly after the sale, while Amazon pays you every two weeks.

You can link to personal websites and grow your email list on Etsy, but that’s not allowed on Amazon.

Cons:

Etsy used to be a lot more strict about this, but it’s stated that you  need to have a made-by-hand vintage item in order to sell.

You need to put more thought and money into your packaging than you do with Amazon. With Amazon, they literally throw it in an empty box with a packing pillow and off it ships. With Etsy, you’re curating an experience for your customer. You’ll need to think more about the packaging than you would otherwise.

You have to market your business by yourself. Amazon gives you a “similar products” section to show off your product, but with Etsy it takes a lot more work to get your product known or seen.

You need to do a lot more work and research when creating listings to optimize your listing

Your shop is the first place that people will likely click over to before they purchase an item from you. With Amazon, most people aren’t even aware that there are different storefronts that you can click on. This means that you have about two seconds to convince them that they want to stay. If you don’t have a curated set of items and they are all mostly random, you’re likely to lose sales.

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Next, let’s discuss the fees and costs with the Etsy platform

How much does it cost to sell on Etsy?

There’s three main fees for selling on Etsy.
– A listing fee
– A transaction fee
– A payment processing fee

You can also opt for a “Plus” account for $10 a month that gives you benefits such as shop customization, discounts on web domains, packaging and promotional materials.

Each listing is 20 cents, and they last 4 months before they expire. Each time you renew a listing (as frequently as you want) you will be charged an additional 20 cents.

There is a 5% transaction fee

This fee is 3% of the purchase + 0.25 cents

How do listings work on Etsy?

You can upload up to 5 photos

To get your listing seen, you need to have more knowledge about keywords and tags. While Amazon does utilize keywords in their listing, it’s not as prominent as Etsy’s platform.

You will do more work researching keywords and finding the right ones vs the competition than you will listing items in most cases.

If you utilize a “production partner”, in other words, someone such as a printer, caster, engraver, cutter or sewer to help you finish or create a product, you must disclose the name, location and details about the process in your listing.

Customer Service & Returns

You can add your own shop policies, which is a nice benefit in comparison to Amazon.

You can choose processing times, and estimated shipping times.

You can also choose if you’re going to accept returns, exchanges or cancellations, and the time frames to do so.

The laws differ if you are in Europe, so be sure to check the documentation for your neck of the woods.

You do have to enter in tax calculations to charge your customers tax, just like Amazon – but that’s simply a part of running an eCommerce business, of course.

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What’s the verdict between Amazon and Etsy?

The key reason why you have to choose between Amazon and Etsy is to run your online ecommerce business. As you know, it’s important to be knowledgeable about your options and choose the right fit for your business.

So when you’re deciding between both of these platforms, remember that there’s no right answer. In fact, you could choose both platforms and expand your reach and avoid the possible pitfalls that comes with selling on only one platform.

In fact, neither platform will allow you to have absolute full control like running your own shop online. But utilizing the tools and benefits that both Amazon and Etsy gain you as a business owner can be worth it in exchange for less control.

With Etsy, you need to hit it perfect when it comes to product choice. The online marketplace quickly gets saturated with popular products, which is difficult to compete with unless you’re first on the scene.

Fads, which seem to sell out quickly and fade just as fast, need to be balanced with evergreen products.

Because Etsy is such a niche product marketplace aiming for products or gifts that are popular or trendy, it can be hard to find those evergreen products.

With Amazon, it’s just as difficult as Etsy because you need to float the marketplace wave to see what’s currently popular before choosing a product.

Again, if you miss that boat, you’ll drowned in the competition and be swept away in the tide along with the thousands of business owners that quit their business each year.

With Amazon, you are charged more fees than Etsy, but you can scale and grow your company more hands-off using the FBA program.

Etsy has less fees but a more tailored audience for those creative entrepreneurs selling handmade and highly customized products. Amazon can also be seen as a catch-all, while Etsy has a more tailored customer experience.

We can go back and forth all day comparing, but which platform is right for you?

Only you know which one fits best with your business model and the future goals of your business.

What is most important to you?
Do you want less fees?
Do you want a more hands-off day-to-day business operations?
Do you want to customize your customer experience?
Or maybe you want to expand your shop to more than just handmade products and as such, require the needs of Amazon or Ebay to do so.

Only you can decide – but hopefully my analysis has been thorough enough to help you make your decision! I personally love both platforms, and will likely try both over time for several different businesses.

If I didn’t answer something that you had a question about, please comment below and I’d love to answer your question!

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#amazonfba #etsy #handmade #sellonline #ecommerce Best Ecommerce Platform Amazon FBA or Etsy Handmade. Looking to start or expand your ecommerce shop and not sure which platform you should use? If it's between Amazon FBA, Amazon Handmade or Etsy, read this post to compare the best ecommerce platforms and make the best decision for your business.
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#amazonfba #etsy #handmade #sellonline #ecommerce Best Ecommerce Platform Amazon FBA or Etsy Handmade. Looking to start or expand your ecommerce shop and not sure which platform you should use? If it's between Amazon FBA, Amazon Handmade or Etsy, read this post to compare the best ecommerce platforms and make the best decision for your business.
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#amazonfba #etsy #handmade #sellonline #ecommerce Best Ecommerce Platform Amazon FBA or Etsy Handmade. Looking to start or expand your ecommerce shop and not sure which platform you should use? If it's between Amazon FBA, Amazon Handmade or Etsy, read this post to compare the best ecommerce platforms and make the best decision for your business.
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#amazonfba #etsy #handmade #sellonline #ecommerce Best Ecommerce Platform Amazon FBA or Etsy Handmade. Looking to start or expand your ecommerce shop and not sure which platform you should use? If it's between Amazon FBA, Amazon Handmade or Etsy, read this post to compare the best ecommerce platforms and make the best decision for your business.
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#amazonfba #etsy #handmade #sellonline #ecommerce Best Ecommerce Platform Amazon FBA or Etsy Handmade. Looking to start or expand your ecommerce shop and not sure which platform you should use? If it's between Amazon FBA, Amazon Handmade or Etsy, read this post to compare the best ecommerce platforms and make the best decision for your business.
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