The Problem with Selling on Handmade at Amazon

The Etsy platform has long existed in a state of inherent tension:  the sellers who depend so heavily upon it are often quick to criticize it as well. Etsy was roundly celebrated as it labored to create an unprecedented market opportunity for makes and product designers, effectively launching a retail rebellion of the very best kind. From its humble beginnings as a scrappy startup way back in 2005, Etsy has evolved into a juggernaut, racking up close to $2billion in sales in 2014 and almost single-handedly launching the “maker revolution.”

 

But a series of missteps and growing pains left many sellers with a less-than-savory taste in their mouths. Etsy sellers have struggled with:

 

    • An ever-evolving definition of “handmade”
    • A perceived lack of commitment to protecting their intellectual property
    • A recent flood of mass-produced products from overseas
    • A corporate IPO, which introduced public shareholder interest into the mix

 

So while Etsy pioneered this space, improving market accessibility for makers and artists over the course of the last decade, the relationship has soured for many of Etsy’s most ardent supporters. Sensing a potentially lucrative opening, Amazon launched a new “Handmade at Amazon” platform designed to compete head-to-head with Etsy.  Amazon wisely put together an attractive package for Etsy sellers and entered the fray with a public launch in October of 2015.

 

For the past four months, I’ve fielded the question “Should I sell on Amazon Handmade?” on a weekly basis as my clients explore all of their distribution opportunities.  And my answer has been a firm and consistent “no” from day one.

 

The debate surrounding Handmade at Amazon continues to rage and thoughtful articles have detailed Amazon’s less-than-intuitive user interface  and the company’s penchant for using the sales data of its own sellers to drive them out of business. While that possibility is deeply troubling, Amazon fans have remained steadfast in their faith in the platform, asserting that the exploitation of sales data of the handmade contingent is speculative at this juncture. Touché.

 

From my vantage point as a business strategist for makers and product designers, there are a host of more fundamental problems with the Handmade at Amazon platform.  I urge every maker who’s striving to build a sustainable business to proceed with extreme caution.  Why?

 

Amazon is a dictatorial platform that exerts almost total control over the sales process, stripping sellers of virtually all autonomy.  And it’s hella expensive, too.

 

AMAZON IS AN EXPENSIVE PLATFORM UPON WHICH TO SELL

 

Let’s start with the money discussion, because a clear distillation of the Amazon fee structure will likely dissuade many makers from sowing deep seeds into the platform. When compared to Etsy, Amazon Handmade takes a larger bite of the apple in virtually every scenario.  A quick side-by-side comparison is revealing…

 

HANDMADE AT AMAZON

    •  No listing fees
    •  $40 Professional Selling Plan, paid monthly
    •  Transaction fee of either 12% or $.50, whichever is greater
    •  Transaction fees are applied to shipping charges as well

 

As a launch incentive for Handmade at Amazon, the $40 “Professional Selling Plan” fee is being waived through August 1, 2016.

 

ETSY

    • Listing fee of $.20 per item
    • 3.5% transaction fee
    • 3% payment processing fee
    • Transaction fees aren’t applied to shipping costs
    • No monthly fee

 

AmazonHandmade
The fee disparity will deepen when Amazon Handmade begins collecting their $40 monthly fee in the fall of 2016.
AmazonHandmade2

 

It’s worth noting, too, than Etsy releases funds immediately, while Amazon holds funds until the order ships. For makers who are shipping premade items, this point of difference is likely insignificant. But for the artists working on custom commissions, this is a critical differentiation that will impact the cash flow of the business.

 

AMAZON’S NOT AFRAID TO STRONG-ARM YOUR PRICING STRUCTURE

 

Amazon is well attuned to their power and the company isn’t timid about applying pricing pressure to those who play in its sandbox. In August of 2015, Amazon dispatched an email missive to an entrepreneur in my circle, effectively announcing that…

 

“We have identified that based on the current cost of some of your products, we are not able to sustainably offer them to our customers despite our highly efficient, high volume retail model.”

 

Mind you, the email was received after 4 successful years of selling via Amazon.  Brand managers hadn’t noted slacking sales, so the trigger for the communication is unclear. Regardless, Amazon offered the brand “suggested” new pricing which equated to a 15% reduction.  The seller was given one week to decide from among three options:

    • Accept the pricing presented, authorizing Amazon to implement it immediately.
    • Accept some of the new pricing “suggestions.” For products which weren’t accepted at the suggested price point, Amazon may elect to drop them altogether.
    • The seller could manually update the pricing themselves.  Amazon noted that if the seller was “unable to give us the costs we’ve requested,” then the products may be dropped from the platform.

 

Let that sink in for a moment: Amazon dictated the prices of an independent brand. Not the price Amazon would pay for the product, but the price they’d allow an independent retailer to charge the customer. Danger, Will Robinson!

 

 

AMAZON IS REVERED AS HOME OF THE CHEAP + READILY AVAILABLE

 

The sale of commodities forms Amazon’s very core… it’s the premise upon which the company was built and it embodies the concept for which Amazon has become famous: cheap prices, fast delivery, and access to an infinite stream of products. But that very premise is antithetical to the handmade movement.

 

Commodities are products that can easily be substituted for one another. They’re items for which a demand exists, but there’s no qualitative difference across a marketplace. For example: the scrubber sponges you grab because they’re on sale at the grocery store and the plant food you select because it’s the first one that catches your eye during a quick run to the nursery. The purchasing patterns of commodity buyers are triggered by two things: price and availability.

 

Amazon has become the largest retailer in the United States, with $89 billion (billion with a B!) in sales collected from 294 million users in 2014. And why do we patronize Amazon so faithfully? Because virtually every product under the sun is conveniently located in one centralized spot, available at our fingertips 24 hours a day at an uber-competitive price. Even better? We can have anything our hearts’ desire on our doorstep within 48 hours. As a shopper, there’s a lot to love!

 

But as a brand, the love affair is increasinly tepid. In contrast to commodities, brands create differentiated products that are highly desired by their ideal customers. Brand customers have some degree of loyalty, seeking out specific goods in the marketplace. These customers are less likely to substitute products based on price and availability.  And they’re precisely the kind of shoppers that handmade artisans need to sustain their business.

 

By pitching your wares via Amazon, you risk commoditizing your brand. And I don’t believe this is an obscure risk… in fact, I believe that makers who sell through Amazon inevitably erode brand value.  The value buyers of Amazon want things fast and cheap (which means their patience is usually in short supply) and they’ll shop next month based on price and availability (which means they’re not inclined to build loyalty to a specific brand). If another seller with a similar item sets up shop on Amazon at a lower price, then your buyers are likely to defect en masse. And if you step off of the Amazon platform, then you immediately decrease the availability of your wares and the Amazon customer isn’t likely to follow you.

 

In short: Amazon buyers likely aren’t your audience. And you likely wouldn’t want them to be. Please know that I’m not anti-Amazon! The almost predictable delivery of Amazon Prime packages to my doorstep is a sign of how often I patronize the platform. But I use it for quick + easy + cheap deliveries of my daughter’s vegan protein bars and the latest business book I want to digest. If fast + cheap + accessible ism’t the kind of customer you ultimately want to attract to your brand, then I’d think twice about crawling into bed with Amazon.

 

A few other important caveats to note: prestige products have no place on Amazon because they’re run contrary to the sales model that Amazon has so carefully constructed.  And as someone who helps makers build wholesale strategies, I can imagine few things which are less attractive to the independent shop buyer than knowing that your wares are available 24 hours a day via America’s largest discount retailer. Crawl inside the mind of a buyer for a few moments and meditate on that through their eyes.

 

AMAZON OWNS THE CUSTOMER + TRANSACTION

 

In essence, Amazon is a closed eco-system and makers are positioned as dropshippers of their own products. The progression of evolving an Amazon customer into a brand customer is a completely passive process over which Amazon sellers have no control.

 

When selling on Amazon, you…

      • Can’t include a link back to your site
      • Can’t include any promotional materials in your shipment
      • Can’t harvest the customer email address to add to your newsletter list
      • Can’t contact the customer outside the Amazon

 

In essence, the customer belongs to Amazon.  Any attempt to establish a relationship with that customer outside of Amazon is sufficient grounds for termination of your Amazon selling privileges.

 

Etsy policies are friendlier to the seller, at least in comparison to Amazon. While Etsy discourages “fee avoidance”, the platform doesn’t forbid you from linking directly to a website that lives outside of Etsy. And you’re free to tuck anything you like into the actual order.

 

the problem with selling on handmade at amazon

 

From Etsy’s Seller Policies page>> “You may receive a buyer’s email address or other information as a result of entering into a transaction with that buyer. This information may only be used for Etsy-related communications or for Etsy-facilitated transactions. You may not use this information for unsolicited commercial messages or unauthorized transactions. Without the buyer’s explicit consent, you may not add any Etsy member to your email or physical mailing list or store or misuse any payment information.”

 

In contrast, Amazon maintains a restrictive set of parameters surrounding the buyers/seller interaction >> “Any attempt to circumvent the established Amazon sales process or to divert Amazon users to another website or sales process is prohibited. Specifically, any advertisements, marketing messages (special offers) or “calls to action” that lead, prompt, or encourage Amazon users to leave the Amazon website are prohibited. Prohibited activities include the following:
•  The use of email intended to divert customers away from the Amazon sales process.
•  The inclusion of hyperlinks, URLs or web addresses within any seller generated confirmation email messages or any product/listing description fields that are intended to divert customers away from the Amazon sales process.

 

In fact, Amazon sellers never even see the email addresses of their buyers…

“Buyers and sellers may communicate with one another via the Buyer-Seller Messaging Service, which assigns unique Amazon-generated email addresses to both parties. Sellers are prohibited from providing or soliciting direct, non-Amazon-generated email addresses on the Amazon website or in correspondence through the Buyer-Seller Messaging Service.”

 

When selling directly through Etsy, you enjoy an opportunity to include promotional materials that fortify the relationship and entice customers to visit your own independent, ecommerce site. When selling on Amazon, however, Amazon controls the process from beginning to end, and sellers are forbidden from including any materials which might potentially “divert” the Amazon-owned customer.

 

Per the Amazon’s Sellers Guide >> “Now that you’ve read your Amazon.com seller agreement and associated policies and guidelines, we want to give you additional information that is key to selling successfully on Amazon. Things to Avoid: Including any marketing or promotional materials with packing materials.”

 

Note: This bit of guidance was originally posted by Amazon behind a password-protected area that’s exclusively accessible by their sellers. The version I linked above is a direct quote on a publicly-accessible Amazon seller’s forum, but the content is identical and the guideline comes directly from Amazon.

 

That policy binds the hands of Amazon sellers and leaves the ball firmly in the customer’s court. There’s no prompting or incentive for any single customer to track down your site, which is the typical catalyst for converting a customer who found you via a third-party platform into a customer whom you “own.”

 

 

AMAZON OFFERS NO HIGHER “HANDMADE” STANDARD

Etsy’s definition of handmade has been a persistent sticking point over the last several years, ruffling more than a few feathers. The “handmade” concept has been iterated in several ways by Etsy executives, and this is the latest incarnation >>

 

“Handmade items are items that are made by you, the seller, or are designed by you and made with the help of an approved outside manufacturer who complies with our ethical manufacturing policies. If you sell in the Handmade category, you must be able to demonstrate that your items comply with our Handmade Policy. You agree that:
•  All handmade items are made or designed by you. If you work with an outside manufacturer to make items that you have designed, you must apply for outside manufacturing and choose ethical manufacturing partners.
•  You accurately describe every person involved in the making of an item in your shop in your About page.
•  You are using your own photographs– not stock photos, artistic renderings, or photos used by other sellers or sites. Read more about using appropriate photographs in this Help article.

 

Sellers have long been frustrated with the ever-evolving definition of the word “handmade” offered by Etsy, but Amazon’s definition of handmade does nothing to “put teeth” into the concept.

“All products available in your Handmade at Amazon store must be made entirely by hand, hand-altered, or hand assembled (not from a kit). Products must be handmade by you (the artisan), by one of your employees (if your company has 20 or fewer employees), or a member of your collective with less than 100 people. Mass-produced products or products handmade by a different artisan are not eligible to sell in Handmade.”

Unfortunately, Amazon’s entry into the handmade world hasn’t helped shore up the definition so many of us seek. It’s interesting to note that the much ballyhooed Three Bird Nest fiasco could easily exist on Handmade at Amazon too, so long as the buttons are lovingly stitched one-by-one onto the fresh-off-the-Chinese boat headbands and assuming that the company constrains its growth to twenty employees or less.

 

NO HISTORY OF SUPPORTING THE HANDMADE COMMUNITY

 

While many sellers have become disenchanted with Etsy as it’s grown, there’s little debate over the amount of seller support that Etsy offers makers and product designers. There are a myriad of support systems in place at Etsy designed to help entrepreneurs get their sea legs beneath them and build more successful businesses.

Some of those support systems include:

    • The Etsy Seller handbook: a collection of 300+ articles on everything from product photography  to brand development
    • Etsy Labs: a “creative community space” in Brooklyn that plays host to craft and business development workshops
    • The Etsy Wholesale Blog: weekly profiles of maker-centric boutiques accompanied by posts filled with strategies designed to fortify your wholesale program
    • Etsy Street Teams: communities of supportive makers centered around common product categories or geographical locations

 

Etsy’s outstanding educational support has spoiled us and Amazon hasn’t risen to the occasion.  Their seller support is anemic at best. In the final equation, Etsy has raised a generation of savvy makers that Amazon can now monetize.  While that’s a brilliant business move on Amazon’s behalf, the maker community isn’t any better for it. Amazon’s roots aren’t in the handmade movement, and I believe they’ve jumped on the bandwagon simply because Etsy has proven the financial viability of supporting makers and artists. I fear that handmade sellers are little more than dollars signs to Amazon.

 

A WORD OF CAUTION

 

I encourage my clients to invest the bulk of their time and energy in building the only platform over which they ultimately enjoy complete control: their own ecommerce site. Depending on any third party platform (Amazon, Etsy, Facebook, Instagram, et al) is a risky strategy that leaves you in a place of vulnerability.

 

Each of those entities is a publicly-traded company with a primary responsibility to return profit to its shareholders. Their ultimate loyalty belongs to their shareholders, rather than their users.

 

Further, because we exert no real control over those platforms, we leave ourselves at their mercy. One round of bad press, one algorithm update, or one policy change could spell disaster. The platform could implode or their customers could revolt en masse. The Powers That Be could simply change the rules and decide that we no longer fit their model, banishing us from the sandbox altogether. If those scenarios feel like obscure or abstract concepts then you either haven’t been playing in these waters for long or you haven’t been paying attention. I say that in love, but I can’t conjure a kinder or more accurate way of expressing that.

 

In order to build a smart, sustainable creative business, I recommend:

    • Building your own ecommerce site as “home base”
    • Amassing a carefully targeted list of email addresses from those interested in your products
    • Sending regular newsletters, brimming with value, to that customer base to fortify the relationships
    • Attracting new customers through intentional, high quality social media content, and thoughtful collaborations
    • Investing at least twice as much energy in your own platform as you invest in third party platforms

 

Have you taken Handmade at Amazon out for a spin? Are you an established Amazon seller who predates the Handmade at Amazon platform? Have you been mulling over the decision to set up shop with America’s largest retailer? If so, I’d love to hear your thoughts!

 

What has your Amazon experience been like?

 

What attracts you to the platform?

 

What fears or uncertainties surround your decision to sell via Amazon?

 

55 comments

  1. We started doing fulfill by Amazon last fall and are doing very very well with it. Lots of webinars to understand how to do it, keyword searches, how to get our things to pop up, and the prime users are our biggest customers. I think it is well worth it if you have the margins to do it. We have wholesale pricing and retail pricing. With all the fees Amazon fulfill by comes in the middle profit wise…worth it for us.
    The biggest drag is filing the sales tax in the states that have warehouses for Amazon, they make each seller do that. I think handmade is an exception.
    But the prime subscribers are the biggest customers on Amazon.

    • Try taxjar! I could import both Amazon, ebay and etsy stores. Only problem if you accept paypal at etsy the sale tax doubled when calculated. So we cancelled paypal at etsy. Then Etsy accepted paypal in direct checkout so no problem left

    • Sarah, are your silks handmade? If so I wonder why you’re on FBA Amazon vs handmade. I ask because I was on regular Amazon, but because I make my products, thinking about moving over to Handmade. But which is better?

  2. I applied for Amazon and got accepted months ago, then decided not to list a single thing for many of the reasons you speak about here. I decided I didn’t want my brand to be connected to them. I do still have my Etsy shop, in addition to growing my own site/shop & email list. I didn’t know this about Etsy: “Once upon a time, Etsy forbade sellers from linking to their websites if the same item was sold on the linked site. That policy was abolished several years ago and sellers are now welcome to link to their site from both product listings and the seller profile page.” Do you have a link to share where I can read that? I did some googling and what I found on Etsy says it’s still against TOU to link to another platform that sells the same items. Thanks and happy new year Lela!

  3. After I applied, I read the small print and decided right quick and in a hurry Amazon wasn’t for me. Great post Lela and thanks for all the hard research.

  4. Thanks so much for the informative article .Do you have any other alternatives to ETSY that do hold true to artisan handmade? It just irks me to see the same pictures and product on ebay as i do on ETSY and find it is very hard to compete in the jewelry category with all the obvious imports.

  5. In really enjoyed reading this informative and relevant newsletter. Thanks putting it so well together, Lela. That Amazon attracts value buyers is a very important point to understand as well.

  6. Thank you for creating an informatice and very well put-together post, Lela. I found it very valuable and agree with everything you wrote.
    I have been doing business on Amazon for several years and my experience has been fraught with a never ending stream of challenges. I have encountered some additional issues that I would like to add to what you have already mentioned. Please check out my follow up blog post at: http://la-isha.com/skin-care-blog/thinking-about-being-vendor-amazons-new-handmade-platform-what-you-need-consider.
    Best,
    Sharon Gnatt Epel
    CEO/Founder
    La Isha Natural Skin Care & Aromatherapy Essentials

  7. Very well done! You have pointed out some of the obvious, and some of the not so obvious, problems inherent in dealing with the devil!
    The other thing that irks me is that there is no Amazon Handmade website.
    If they had made it a separate entity, at least you would get people looking for Hand Made.
    As it is, you are getting there from the Amazon website, so you’re already in ‘value shopper’ land before you can even get to Hand Made.

    Looking for hand made items on Amazon is beginning to look like looking for jewelry in Woolworths; they will have some, but you wouldn’t want to be caught dead wearing it.
    Given all the bad press they are getting, I actually feel sorry for the people who are selling there.

    You might make a buck, but integrity and pride are pretty much down the drain.

  8. While I make every effort to confirm my own sources, as well as to both request and check for myself – the sources to claims made by others, it’s definitely not hard to see the vicious points Lela speaks of. I landed here because I went looking for bits of info to confirm a few suspicions of my own regarding A-capitalon Handmade (excuse the cheesy pun). I’ve since (in the last two minutes) closed my AHM account entirely, an action taken least on a whim.

  9. I have been selling on Etsy for six months, and all in all, quite happy, but still looking for new customers. I applied at Amazon Handmade and was accepted. Been listed there for a month. I am using the same titles and descriptions. So far this month I have had 1200 views and 50 sales on Etsy. On Amazon, only 80 views and no sales. I think your description of Value Shoppers is dead on.

    I will drop Amazon just before the monthly fee kicks in unless things change drastically.

  10. Thank you so much for the info. I’ve been thinking if I should open a handmade shop on Amazon… I have a shop on Etsy HeartStreet.etsy.com and I’m doing OK. I thought opening another shop on Amazon would be good to get some more sales, but now I need to think twice.

  11. Thank you so much for your well-written insights! I’ve been selling on Etsy for 3 years and loving it! I haven’t had any problems to speak of, my customers are amazing, thoughtful and kind, appreciative….I couldn’t ask for a better platform. (My shop is etsy.com/shop/scentualgoddess) I was asked to apply for Amazon Handmade last year. I did, and was accepted, but I never listed anything. Every time I tried to make myself sit down and list stuff I got a sick feeling in my stomach like I was heading down the wrong road, like I was “selling out” or something. My brain would say “Yes, do it, it will open up a whole new sales channel”…..but my gut said “Nope. Not a good idea!” Tonight, after a whole year of not thinking much about it anymore, I was prompted by an email from AH asking why I hadn’t listed anything and wanting to chat with me about it. I went back down that same road of “yeah… why aren’t I doing this? It’s the biggest sales channel around, why am I blocking myself from it?” So for a little bit, I wrapped my brain around the fact that yes I would take the plunge and get on Amazon. The timing is right, the holiday season is coming. If I hurry I can get everything up and running……then that gut feeling came rushing right back again. So I went to Google and typed in “Amazon Handmade seller reviews” and your article came up. After reading your insights I agree wholeheartedly. I’m not looking for bargain hunters, I want to maintain control of my pricing. I can’t stand the thought of having to re-photograph all my items on plain white like they insist on. Their fees are ridiculous after seeing how you laid it out. And if I remember right they only pay once every two weeks with a hold before that. No thanks! Etsy and Shopify are doing just fine for me. I just laid that idea to rest for good. Thank you! And I love what you said about the best thing to do is work on my own website twice as much as I do on any other platform. Right there are the only words I needed to hear tonight! Many blessings to you, and I’m going to check out the rest of your site and join your email list now 🙂

  12. Interesting article. I have applied to sell on Amazon Handmade, not as a substitute for Etsy, but as a supplement to it. A VERY successful Etsy seller recently recommended it as a trial, during the fee waiver period to see if that platform is a good fit.

    I look at Amazon as a parallel of brick and mortar retail options. (I have used Etsy, and sold retail since 2008.) Amazon owns their customers. True. Retail outlets own their customers. Most retail locations that sell on consignment have terms and conditions similar to those of Amazon. I will pay a little more for certain advantages that come with gaining access to someone else’s customers. The retail outlets where I sell do all of the advertising and bring customers to me just by virtue of their reputation of having unique items that are unavailable elsewhere. Amazon has a huge customer base already in existence. It has yet to be seen how they approach their handmade section, but the price squeezing you say it does wouldn’t be possible if what you create and sell is unique enough that you can’t put someone else’s items next to yours and call them “equal”. As a customer of Amazon, I see identical items sold at wildly different prices, which only stands to reason, would not sit well with the parent retailer. I cannot see that being an issue with uniquely handmade articles. I don’t think the experience of a seller of mass produced items compares to that of the handmade seller.

    The writer of this article seems to be a little “Etsy-centric”. I like Etsy. I’ve been selling there for years. But the cost comparison chart is not a realistic view of the average seller’s fees. To gain any kind of success on Etsy, you have to make yourself seen among the million + other sellers on that site, which means you pay for visibility, one way or another. Add promoted listings, extra renewal fees, SEO optimization, and if you take advantage of other offerings such as their “Pattern” website option, add that in. My costs for selling on Etsy rival the cost of selling in retail, except in retail, I don’t have to work constantly on driving traffic into the store, that is done for me. Since brick and mortar retail sales is the most expensive method for selling anything, I would say Etsy isn’t as big a bargain as the comparison chart makes it seem.

    I don’t know enough about Amazon Handmade to make any kind of definitive statement about it. But this isn’t the first go-round for Amazon and Handmade sales. Just as Etsy has evolved over time (and not always in a good way), I think Amazon will evolve, based on making their concept work for every entity concerned. Until the end of 2017, the risk to try it is minimal. One thing I know for sure, if I don’t give it a try, I will never know if it could have worked for me or not.

    • THANK YOU for this! I already signed up and after reading this article and the comments, I was worried I made the wrong choice. I had my items for sale in a craft market (6 month term) where I paid $125/month PLUS 12% of revenue! Needless to say…I only LOST money. Your viewpoint and insight has changed my mind and it’s worth the risk for me. What doesn’t work for one…may work for another!

      Love and light to you all!

    • Hi Mary, and many thanks for your comments. I hope Amazon works out well for you. My primary concerns aren’t financial. It’s true that on the financial end of things, there is little risk in trying out Amazon’s Handmade section because the bulk of fees are waived at the moment.

      However, my work with clients centers upon making decisions that are rooted in the long-term best interest of these small creative brands and I spend a great deal of time working to reposition them from commodities to real brands. And that’s why I stand firm in my assertion that my clients are very wise to steer clear of Amazon. What they gain in the short term in terms of sales pales in comparison to what they lose in terms on long-term opportunities.

      Your mileage may vary and I support your right to build whatever business best suits your needs!

    • I agree that the cost of Etsy fees described here are not entirely accurate. I have sold on Etsy for 10 years and have had a successful shop there. I also have started a shop on Amazon handmade. My Etsy fees over the years have gotten quite high, at least 10% of my sales each month maybe more. Listing fees, transaction fees, and fees charged for credit card processing etc, then your shipping is added to your bill. I pay enough in Etsy fees to rent a small retail office space. I am feeling ripped off. Amazon fees are very expensive for sure, but at least all the fees are deducted out of each sale so you never have a big bill to pay at the first of each month, you pay as you go. I like that. I thought Amazon would be cutting edge technology but it’s not. The Amazon platform is slow and awful to work with. It is not user friendly, is hard to use and so time consuming to list items. The platform seems like old technology, it is “Clunky”, whoever designed it must have worked in the military or at the Post Office! You can’t even upload your listings and photos from your iphone to the” Amazon Mobile Seller’s App”. You have to use a regular desktop to do it, so the seller mobile app is a joke! You can check to see if you have any sales, emails etc but that’s it. You have to wait to get paid on Amazon and I don’t like that either. Amazon Handmade is like an ugly stepchild, or an afterthought for the huge company, just seems thrown/patched together without enough thought for the users. I hope over time it will improve. A lot of the features don’t really work well for custom handmade items. I am still trying to work with it though. I found this blog while I was searching for answers. Do I give 100 percent of my listings over to Amazon? I only have about 30 items on Amazon now, but am considering moving all my 400+ Etsy items to Amazon and shutting down my Etsy shop for good. The Etsy platform is the best user friendly site though, however it is getting so expensive now and they are constantly making stupid changes! I can’t take it any longer. Every time Etsy makes a change, views and sales drop. I have no control over it. Instead of creating, I spend all my time on SEO. Now most of the traffic in my Etsy shop comes from my own efforts promoting on social media, repeat business etc. I am wondering why I pay Etsy such huge fees when I do all the work to get my own traffic! I can do this promotion on my own site and pay no fees. Advice for new shop owners? Definately get your own website FIRST! Work it first, work it best, it can take years to build it up, promote it on social media so you don’t become a prisoner like I am on Etsy. My shop is my full time job. Once you build up your business and have so many customer sales, so many 5 star reviews, for so many years, it is very hard to just walk away and leave them all behind when you want to switch platforms…I am probably going 100% over to Amazon where everyone shops, but I am nervous about it. It is so much work and I don’t know how it will go…trying to decide. Great advice from Lela however

  13. What a good place here to visit just as I’m setting up shop! Wondering if Amazon has any decent market presence for handcrafters I searched and this is on of several sites I’m checking.

    MaryAnn Montour makes a solid case about the Etsy bias presented on this page. Amazon encourages well-valued pricing but not at the cost of losing unique lines of merchandise. I know, as I’m a member of a pre-market product salability forecast group seeking completely unique items to market via FBA. Amazon supports fair margins on valuable unique merchandise as opposed to high margin on competitive items. I think if this author revealed the relative’s products, they would be competing items, and the price drop is to align pricing with standard Amazon pricing for those items.

    Amazon is a mass marketer, so never expect to see similar items carried with large differences in buyer pricing. No big retailer can allow that.

    On the other hand, for unique products that have good market demand, Amazon is all too happy to support higher profit margin, simply as that means more profit in their bank. Smart producers know their sales channels v.s. the market demand of each product they offer. One sales channel does not fit all products normally.

    • Hi Claude,

      Many thanks for taking the time to comment. Though you and I have never worked together, I have a feeling that you’re not working with the types of products I support as a consultant. Amazon may be a wise choice for many products, but I don;t believe it’s a smart choice for the stationers, jewelers, ceramicists, apparel + accessory designers, and apothecary brands that I work alongside.

      You mentioned…

      ” I think if this author revealed the relative’s products, they would be competing items, and the price drop is to align pricing with standard Amazon pricing for those items.”

      I’m not sure what you’d like clarity around, but if you let me know, I’ll be happy to try and help!

  14. I have been on Etsy for many years and struggle to get seen. I make pottery so I don’t feel we are terribly over saturated however on Etsy I am competing against a lot of not really handmade stuff. I started HAndmade on Amazon about a year ago and my sales has surpassed Etsy by a landslide. My feeling on the fee structure is that it will weed out the hobbies that are all over Etsy. Amazon still has lots of work to do but overall I have been very happy at Amazon and very disappointed with Etsy.

    • CONGRATS on your success and THANK YOU for this! I have had the same experience with Etsy! I am moving forward with Amazon Handmade and hopefully will have similar success!!!

      Love and Light to you!

    • Dani,

      I found your website and you make some beautiful things! The black and white mugs in the video on the homepage are especially cool.

      I understand how challenging it is to be seen on any third-party platform, whether it’s Amazon or Etsy. I respect that each of us needs to find what works best and aligns with our goals. For so many reasons that go beyond the simple math of the financials, I continue to advise my clients against Amazon Handmade. You and I haven’t ever worked together but now that you’re on Amazon, I’m glad that you’ve found success there. Best wishes to you!

  15. Etsy nightmare. I had my credit card number stolen by another etsy seller, but no way of finding out just who that would be. $1500 dollars of purchases were made on it. I quickly stopped payment through my credit card holder. Some how now Etsy has shut down my shop until I pay them the $1500. So no they are treating me as the crook, strong arming me to pay them the money. When I try to contact them to explain what has happened. They just tell me to pay up or they will keep my shut down. I ask what they were planing to do with the $1500 but with no reply. This is double trouble when I had nothing to do with this. My shop sales are around $60,000 . I will probably close my shop based on my own principles of not being forced to fess up to something I had nothing to do with. But I will hurt some.

  16. Great article, but you didn’t touch on the most frightening detail. I.E. number 20 in the agreement you have to sign:
    20. YOUR GRANT. By entering into this Participation Agreement and listing an item, you grant us a royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and license to use, reproduce, perform, display, distribute, adapt, modify, re-format, create derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of the content you submit to Amazon and its affiliates and to sublicense the foregoing rights to our affiliates and operators of any website or other online point of presence (other than the Site) through which the Site and/or products or services available thereon are syndicated, offered, merchandised, advertised or described…

    In other words – you give them the license to rip off your handmade item, have it manufactured in some third-world country and then sell it at a price that undercuts you. Any artist that signs that agreement is a fool. When I read that, I ran quickly in the other direction.

  17. I just signed up for Amazon Handmade hoping for another avenue to sell products. (I don’t want to close my Etsy Shop http://www.infinitypaperbtq.etsy.com – just grow my customer base.) Wow…after reading all of this, I have no idea what to do! I hope in a weeks time I will make a wize decision as my business supports 3-4 other women and we donate 10% to showhope.org. I feel like the decisions I make can and will effect everyone involved.

    I’ll keep researching and making my decision soon.

    Thanks Lela for your article and everyone that posted their feedback!

  18. Thank you Lela for this information, and all of the commenters too. The last one that Nancy Sutton wrote is the nail in the coffin for me. That is horrific. Thank you all very much.

  19. I was invited to sell on Amazon Handmade and thought it was a great opportunity. I’ve had alot of sales over the last 18 months (over $40k), but ended up with little revenue in the end. This week Amazon suspended my account for a high “defect” rate. This meant that 3% of my customers were returning my handmade IKEA SLIPCOVERS and marking them “defective” for reasons such as :
    – did not fit a non- IKEA piece of furniture
    – bought by mistake
    – did not read the listing description
    – did not get Amazon-relayed emails regarding product info
    – did not understand what they were buying
    ….the list goes on.
    Aside from the ineffective system, the Amazon customer is a different breed. The mentality is cheap and fast, and if it’s not at least one of those things, you’re in trouble. I will not be appealing my suspension, it’s a blessing in disguise 🙂

  20. To Barbara above.

    I believe that statement about granting rights was for the online content you upload to your Amazon seller account. Essentially you are granting them the rights to use your product image in other marketing materials outside of AHM.

    If you have ever seen Amazon ads on sites like Facebook that contain pictures of items you were recently looking at on Amazon, those ads are what you are granting the rights for them to incorporate your product photographs into among other things.

    With respect to this overall article and specifically the author I say well done. Your closing “Word of Caution” is spot on. I consider this to be the best e-commerce advice ever given. As someone who has been selling online since the 1980’s (pre-internet) I can tell you horror stories. As long as you are selling under some one else’s terms, you are one TOS update away from being shut down.

    3rd party selling sites are fine, as long as those sites are the eggs and not the basket.

    Great read. Thank you!

  21. I Started with Amazon back in 2015 because….it’s Amazon. I thought it was a good idea to get my products on a platform as big as that. I was mistaken. My products are relatively big so shipping would usually be in the teens. But amazon only allowed $7 for shipping so I always had to come out of pocket and sometimes double. Imagine having a $50 product (5lbs) sold plus $6 shipping from Maryland to a customer in California; Amazon takes their cut of about $11, leaving me with $45. Shipping this large box will cost about $22 now I’m left with $23 to cover materials, labor, and other business cost. No room for profit. I removed all my products and decied to sell only small items. But my sales there are VERY few and waiting 2 weeks to get paid is not what I’m about. It’s much better but after reading this article, I am confirmed that its still not worth it. I’ll stick with my site, Etsy, and ebay.

  22. This is an old post I hope to renew. What it boils down to is … the handmade items. Are they really made in the US or just a listing from China. I find that 80% are not US handmade goods, but Cheap factory items from China, When Etsy and Hopefully Amazon can tell the difference, we US companies stand a chance.

    • I have the same concern which is why I make big noise on my Etsy shop about where I am located, how my items are made and where. Each item listed is detailed out in the description…. Motivated by my own shopping experience…sadly few people look at this. So, for instance, in addition to the hand sewn scarves and athletic wear I have on my shop my device cases are assumed made in china when they are, in fact, created by a small 10 person shop I work with in Montreal, Canada… Now as a result my device cases are $35 (excellent materials too) as opposed to my competition who sells them from china for $8-$20….I can’t compete with that and will likely be phasing them out. I like the idea of keeping things made in non-sweat-shop places but monetarily I can’t keep up. I’m just one person trying to make a living doing what I enjoy and I’m quickly feeling deflated…

  23. Great post, I wish I read it prior to opening my Handmade shop. I had a harrowing experience. In a nutshell, Amazon suspended my account for not meeting their less than 1% return rate. Then they proceeded to destroy $7500 worth of my FBA multichannel inventory, that I was also using for Etsy. This discretionary disclosure is in the seller agreement they make you sign. Apparently the “system” does automatic removals of non-listed inventory (I couldn’t list because my account was suspended). Even when I did make money, it was eaten up by fees and advertising campaigns. I have hired a lawyer to try and recoup my loss, but definitely not worth the time.

  24. I realize this blog post is “old” but definitely still relevant. Wonderful post which I found with a Google search after applying and being accepted by Handmade by Amazon. I was reading through the agreement and right off the bat this is why I ran, as an artist I will NOT relinquish my rights to this extent!!! Specifically the part where they have right to “…create derivative works of…” as well as the strong language such as “… irrevocable right and license to use…” I ran, ran, ran, ran and googled it to see if I was perhaps misreading.

    Copy/pasted From the amazon agreement I was sent today (July 2017):
    “4. License.

    You grant us a royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and license to use, reproduce, perform, display, distribute, adapt, modify, re-format, create derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of Your Materials, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties; provided, however, that we will not alter any of Your Trademarks from the form provided by you (except to re-size trademarks to the extent necessary for presentation, so long as the relative proportions of such trademarks remain the same) and will comply with your removal requests as to specific uses of Your Trademarks (provided you are unable to do so using standard functionality made available to you via the applicable Amazon Site or Service); provided further, however, that nothing in this Agreement will prevent or impair our right to use Your Materials without your consent to the extent that such use is allowable without a license from you or your Affiliates under applicable Law (e.g., fair use under United States copyright law, referential use under trademark law, or valid license from a third party).”

  25. Hopefully this will help someone who is just starting out and is thinking about selling on Amazon using the “free” Handmade Artisan account.

    I supplied all the necessary information, bank accounts, credit cards, photos, etc. that were required in the registration process.

    I subsequently received a letter of Congratulations!, that my account had been approved.

    I followed and Tips for New Seller Success, and started listing products, but everything showed up as Currently Unavailable.

    I tried everything I could think of and also looked on the forum for answers. Nothing worked, so I decided to contact Seller Support.

    After chat and phone call with Seller Support I received the message below, even though I had supplied everything they were now asking for again!

    They said that Identity Verification has nothing to do with Registration, it’s a separate Security Step, and I could not sell on Amazon until they were convinced of my identity.

    They kept all my product listings as “Currently Unavailable” for 30 days.

    There’s more about the “Free” account in the following comment.

    ——————– This is the message ——————-

    Upon checking your account, I was able to find that there are some documents missing regarding the Identity Verification. This is the reason why your listings are not displaying on the website.

    Please submit the required documents below

    -1 document proving national identity

    Document must meet the following requirements:

    Submit a scanned color copy of both sides of your government issued national ID and merge the images into one file. Companies/Corporations need to submit a government issued national ID for the primary contact or beneficial owner. Do not submit a screenshot.
    Copies should be legible.
    Your identity document must be in one of the following languages: Chinese, English, French, German, Italian, Japanese, Portuguese, or Spanish. If it is not in one of these languages, provide a copy of your passport or a notarized translation of your document into one of these languages.
    The name on the national ID should match the name on your registered Amazon account.
    The national ID should not be expired.

    -1 bank account statement
    Document must meet the following requirements:

    You may hide monetary amounts, but the rest of the document must be visible.
    Your document must be in one of the following languages: Chinese, English, French, German, Italian, Japanese, Portuguese, or Spanish. If it is not in one of these languages, provide a notarized translation of your document into one of these languages.
    For Companies/Corporations, the name on the bank account statement should match the legal entity name on your Amazon account. For Individuals, the name on the bank account statement should match the name on the government issued national ID and your registered Amazon account.
    The address on the bank account statement should match the address on your registered Amazon account. If you need to change the address on your Amazon account, follow the instructions here first before submitting this application.
    The bank account statement must have been issued within the past 90 days.

  26. I was “invited” to sell on Amazon after they had reviewed my Etsy shop. I was offered a Handmade Artisan seller account with no monthly fee, but very high seller fees. I reluctantly accepted the high fees as their way of making up for the “free” account.

    After registering, I received an email with what sounded like a 6 month trial of a regular Amazon $39.99 per month account for non-handmade items.

    I had no interest in selling non-handmade items nor did want to pay an additional monthly fee, so I contacted support to make sure the Pro Merchant account was cancelled.

    Rather than try to explain what happened, I’m including the content of the chat below.

    Live Chat
    You are now connected to Amazon Seller Support

    Amazon Support:
    Hello and thank you for contacting Amazon Handmade Chat Support. How may I assist you today?

    Me:
    Hello, I would like to cancel my trial account before 12/31/2017.

    Amazon Support:
    No, your account is not on a trial version, you have an account that is fully active and with all features, even after December 31. That date is in reference to the promotion we have on which we waive the monthly fee of the professional selling plan until December 31, 2017. If you continue selling non-handmade items after that date under the professional plan, you will be charge the monthly fee.

    Me:
    I don’t sell non-handmade items. I just want to cancel the professional plan.

    Amazon Support
    : The professional selling plan is a requirement to sell under Handmade, that is why we have the promotion.
    The promotion works like this:
    We have a promotion on which the monthly fee is not charge to Handmade sellers until December 31, 2017. The monthly fee will be charge starting January, 2018.
    However, if you sell more than 40 non-handmade items in any given month outside of the Handmade category, the promotional waiver of the $39.99 monthly Pro Merchant fee will be void, effective immediately. Going forward, the subscription fee will be automatically debited from your seller account on each monthly renewal date.
    If you sell under regular categories after December 31 and keep the professional selling plan, you will be charge
    If you sell under regular categories now, keeping the Handmade feature but you don’t sell more than 40 units of items under regular categories, you are not charge.
    In a 30 day period.
    And if you sell more than 40 units under regular categories in a given month, and before December 31, you start paying the monthly fee.

    Me:
    Okay, you’re saying my “free” handmade account is not a trial version, but I must pay $39.99 per month after 12/31/2017, if I want to continue to use it.

    Amazon Support
    : Yes, that is correct, but not because of a trial, it’s a promotion.

    Me:
    I don’t sell in any non-handmade item categories!

    Amazon Support
    : Then you don’t have to worry, you will remain under the promotion. Until December 31, 21017.

    Me:
    When I was contacted by Amazon about a handmade account I was told that it was free. Not a trial until 12/31/2017 .. just free!

    Amazon Support
    : If you don’t want to be charge, then you can cancel the account before December 31. But as for the promotion, it was on the welcome email sent to you on May 25, if you look for it, you will see it says:
    Dear Art,
    Thank you for registering for Handmade at Amazon. By joining Handmade at Amazon, you are automatically enrolled in a Pro Merchant Amazon account.
    Through 12/31/2017 you will be eligible for a waiver of the $39.99 monthly Pro Merchant fee.
    However, if you sell more than 40 non-handmade items in any given month outside of the Handmade category, the promotional waiver of the $39.99 monthly Pro Merchant fee will be void, effective immediately. Going forward, the subscription fee will be automatically debited from your seller account on each monthly renewal date.
    Referral fees and variable closing fees will still apply to sale of your products.
    We do specify that from the moment you start.

    Me:
    I received this message “AFTER” I registered for the “free” account as if it was a bonus, if I’m interested in also selling outside of handmade account. I’m sure that you can see how “deceptive” this is.

    Amazon Support
    : Is not deceptive. It is an option to sell outside of Handmade if you want to, but you are subject to the fees of the categories and if you continue selling outside of Handmade and under the professional plan after the promotion is over then you are subject to the monthly fee. You can continue selling outside of Handmade after the promotion is over and under the individual selling plan on the categories available for that plan and not being charge the monthly fee.
    I will pass along the feedback that you found the information deceptive so they work on sending a more clear email in the future.

    Amazon Support
    : I want to make sure you are still there, you have been idle for 3 minutes. If you do not reply within the next 2 minutes, the chat session will be closed.

    Me:
    I never wanted to sell outside of handmade account, right from the start. So why would I spend valuable time going through the verification and security process and more time setting up the shop and then find out Amazon wants me to pay for something that I never ordered or wanted and now lose all the time and effort I put into setting up the shop, products, descriptions, etc. This is not a misunderstanding on my part. I believe this “free” Handmade Artisan account promotion was carefully thought out to lure hard working creative people away from Etsy and put them in a position where they’re stuck paying $39.99 per month or lose all their hard work.

    Amazon Support
    : I will pass along the feedback to the applications team so the explanation of the promotion is more detail in future emails. But still, after December 31, 2017, if you continue on Handmade, you will be subject to the $39.99 monthly fee.

    Me:
    If you have any self respect you’ll find an honest employer.

    Amazon Support
    : Thank you for the feedback. Is there something else I may do for you at this time?

    Me:
    Yes .. Enjoy the rest of your day!

    Amazon Support
    : I will do so. I hope you enjoy your day as well. It is a pleasure to assist you.
    Thank you for contacting Amazon Seller Support, have a great day. Please close the chat window to end the session.

  27. I have been a Amazon seller for 2 years and tried their Handmade platform but have not sold a single item on he handmade platform but do well with Amazon otherwise.

  28. This says it all and should make everyone’s hair stand on end. They OWN you and every single piece of Art you make read the Amazon Handmade Agreement (Partial) here:

    You grant us a royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and license to use, reproduce, perform, display, distribute, adapt, modify, re-format, create derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of Your Materials, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties; provided, however, that we will not alter any of Your Trademarks from the form provided by you (except to re-size trademarks to the extent necessary for presentation, so long as the relative proportions of such trademarks remain the same) and will comply with your removal requests as to specific uses of Your Trademarks (provided you are unable to do so using standard functionality made available to you via the applicable Amazon Site or Service); provided further, however, that nothing in this Agreement will prevent or impair our right to use Your Materials without your consent to the extent that such use is allowable without a license from you or your Affiliates under applicable Law (e.g., fair use under United States copyright law, referential use under trademark law, or valid license from a third party).

  29. I have been on HOA for 1 1/2 years and I have thouroughly enjoyed it and success. Yes, HOA is more expensive then Etsy but no more expensive than if you buy into an ecommerce package like Shopify. I understand the Amazon platform since my hipusband has been selling on the professional plan since 2003. It was hard at first to wrap ur heads around all the “negatives” mentioned in the post but we got past it and are now making a great living on Amazon.

    My HOA account is far exceeding my Etsy store to where I have recently decided not to continue with Etsy. I am building my own store using woocommerce. The Amazon audience is far greater than the Etsy audience. Amazon shoppers don’t shop stores, they shop for things so not having a pretty store is fine. Amazon shoppers trust Amazon so more shopping happens there. I hear reports daily of shoppers not happy with Etsy transactions and there is no recourse.

    Amazon is certainly not for the faint of heart, nor is it for the hobby maker, producer however it is a great platform to be on.

    • I setup an account on amazon with a $34.95 item and the Amazon Referral Fee was $4.56, still setting my shipping and noticed today the fee is now $6.54 and I haven’t even sold anything yet… That’s more than I make… Please tell me if I should bother… I feel bad for people who have all their business on amazon and having amazon take a big bit out of your bottom line. I mean… how much money do they need.

  30. I have been selling jewelry on H@A since it opened. It has been life changing for my family. I have made at least 20x more than I ever did in 10 years on Etsy. I have since closed my Etsy shop.

    There is a learning curve. It is not easy.

    It is Amazon’s playground, so you play by their rules in order to have access to billions of customers.

    There are many amazing handmade items on H@A. There is also imported pretend handmade items JUST LIKE ON ETSY.

    I actually take offense by some comments here and some statements in this blog post. My brand is not diluted at all. It has only strenthened!

    The $40 pro account fee has been waived until Jan 2018, and there is talk that it may be waived forever. The fees come out about the same as Etsy when you factor in renewing and advertising costs on Etsy.

    Amazon’s search actually works. Etsy’s doesn’t.

    There is no stupid “matching keywords to title” and other SEO games on Amazon.

    Their FBA program has increased my sales by 50%.

    Amazon customers are not all bargain hunters. I have sold many $100-200 statement necklaces on Amazon.

    I am an artist. I make a living as an artist. I want to make money being an artist. That means, I go where the sales/buyers are.

    Please do your due diligence about H@A, and not make a decision based on one blog post.

  31. Great article!! Thank you for such an in depth breakdown. I upcycle furniture and have been accepted as a seller on Amazon handmade. One of my pieces can cover the cost of the monthly charge and the 15% fee.

    However, I will not be selling 40 items per month, as each piece may take up to a few days to complete. I haven’t liated anything yet for a few of the reasons you stated above. I want to remain in control of pricing, I want to stand out and I don’t want to be bombarded with fees.

    But I know each sellers experience is not the same. Is there anyone out there selling furniture or home decor that can help solidify my decision?

Write a Reply or Comment

Your email address will not be published.