The online e-commerce market is highly competitive, with many options for sellers. Among the most popular choices, Amazon and Etsy are two platforms that offer unique selling points when compared to one another.
If you are an online seller, it is essential to consider the pros and cons of each marketplace to make an informed decision about the best option for your business.
In this blog post, we will compare Amazon vs Etsy to give you more insight into both website marketing as a seller and determine which may benefit your business more.
1. What is the Difference Between Amazon and Etsy?
The primary difference between Etsy and Amazon is in their business models; Etsy is an online marketplace for handmade, vintage, or one-of-a-kind products, while Amazon sells mostly mass-produced merchandise from various different brands. This means buyers on Etsy can find unique items that cannot be found anywhere else, whereas many items sold on Amazon can also be found in physical stores or other online retailers.
Etsy has seen tremendous growth over the past decade.
As of April 2020, it had more than 60 million buyers, over 2.9 million active sellers, and a total of 55 million unique items listed on its platform, more than double what it was five years ago.
Today, Amazon is one of the leading e-commerce companies in the world and is valued at more than $800 billion. Its popular services include Amazon Prime, Amazon Video, Kindle Direct Publishing, and Alexa. It has even entered into grocery market with its acquisition of Whole Foods Market in 2017. Furthermore, it has recently begun offering virtual healthcare services through its new venture “Amazon Care”.
On other hand, Etsy transactions are worth around $35 per order, with a total of $10 billion in sales generated over the last 12 months alone. Etsy has reshaped the way people shop for unique items and gifts by connecting buyers with independent makers from all over the world. The site provides a one-stop shop for customers looking for handmade items, vintage goods, and custom-made products such as furniture, jewelry, clothing, home decor, and much more.
Etsy also features a robust digital marketplace where buyers can find irreplaceable new items or seek out rare finds from past generations.
The mission of Etsy is to keep commerce human. It aims to direct buying and selling between customers and sellers to a more personalized experience rather than just a transaction. This is achieved through their suite of services that support individual buyers and sellers.
While Amazon’s retail marketplace is easy to use, with product reviews that help shoppers make informed decisions about what they buy, millions of third-party sellers offer competitive prices, making it an excellent option for shoppers seeking quality items at low prices. Many buyers appreciate Amazon’s Prime service, which offers free two-day shipping and access to thousands of exclusive deals each month.
2. The Pros of Selling on Amazon
● Wide range of potential customers: Amazon is the world’s largest online marketplace, with customers located in over 180 countries. By selling on Amazon, you can access an enormous customer base that would otherwise be unreachable. Furthermore, sellers can target buyers by creating tailored ads and implementing Amazon’s sophisticated marketing tools. Additionally, Amazon cross-sells items to increase your sales exposure even further potentially.
● Convenience: There are numerous advantages to selling through Amazon compared to Etsy; for example, setting up a store is simpler than ever. The Seller Central interface allows sellers to quickly create their page and start listing products in no time. Furthermore, sellers can manage their entire business from one centralized location. Amazon has features such as tracking orders and inventory management, allowing them to keep track of everything they need to ensure smooth operations.
● Fulfillment Services: For those without a warehouse or logistical team, selling on Amazon will enable them to access fulfillment services such as Fulfilment by Amazon (FBA). This service simplifies managing a business by handling things like shipping orders and providing customer support services like returns processing and customer service queries.
● Competitive Pricing: Sellers can choose from different tiers regarding fees, meaning they have more flexibility when deciding how much they want to spend on fees while still making profits from their sales. Moreover, several discount programs are available for sellers looking for additional savings on these fees, allowing them more control over their budgeting costs while remaining competitively priced against other marketplaces.
3. The Cons of Selling on Amazon
● Unpredictable Changes: As Amazon is constantly updating its algorithms and introducing new policies, sellers must keep up with any changes in order to remain competitive and successful on the platform. Failure to do so could mean that your products no longer appear in search results or shoppers don’t find them appealing due to poor presentation or slow loading times – all of which could lead to fewer sales and lower profits over time.
● Heavy Competition: Amazon is one of the most popular e-commerce platforms out there which attracts many sellers. This means that you’ll face stiff competition when selling on Amazon, which can make it difficult for new entrants and small businesses who lack resources or visibility compared to larger sellers already established on the platform.
● Uncontrollable Market Fluctuations: Selling on Amazon can be risky as the ever-changing market, including fluctuating consumer demand and competitor prices, can cause product prices to become highly unstable. This could lead to unexpected losses for all sellers, especially if they fail to keep track of price changes and adjust the pricing accordingly. Furthermore, if the market takes an unexpected downturn, it could mean that sellers have too much inventory sitting in their warehouses with no customers willing to buy it. Additionally, if Amazon decides to raise or lower its fees or alter any of its policies in a way that might limit sellers’ profits or activities, this could also cause financial losses for sellers.
● Brand Dilution: Another issue associated with selling directly on Amazon is that brands can sometimes suffer from brand dilution when competing with unauthorized resellers who may not offer original items at discounted rates or even counterfeit items that damage buyer trust by providing inferior quality goods compared with genuine products sold by authorized dealers like yourself. This can cause frustration among loyal customers who bought directly from your store only to find out they are no longer getting exclusive deals or, even worse, being offered fake goods instead of genuine ones – something that reflects poorly upon your business as well as possibly leading them away from your store altogether!
4. The Pros of Selling on Etsy
- Targeted customer base: Etsy’s focus on handmade, vintage, and unique items draws a specific audience interested in creativity and craftsmanship. This niche market consists of customers who value originality and quality over mass-produced items. By selling on Etsy, you can tap into this highly engaged audience, which is more likely to appreciate and purchase your products. The platform’s reputation and existing customer base can help you build brand recognition and reach potential buyers who share your values and aesthetic.
- Ease of setup: Etsy’s user-friendly platform makes setting up your online store seamless, even if you are new to e-commerce. You can quickly create a professional-looking storefront with customizable shop sections, product listings, and shipping options. Etsy’s straightforward fee structure and built-in payment processing system also simplify the financial side of your business. With minimal technical expertise required, Etsy allows you to focus on creating and selling your products without the need to build and maintain your website.
- Global reach: Etsy provides an opportunity to connect with customers worldwide. With millions of shoppers visiting the platform each month, you can expand your market beyond local buyers and gain international exposure for your brand. Etsy offers tools and resources to help sellers navigate international shipping and customs, making it easier to reach a diverse and global audience. This international reach can help you grow your customer base, increase sales, and establish a stronger presence in the creative community.
- Supportive community: Etsy fosters a supportive and collaborative environment for sellers. The platform offers various resources, such as the Etsy Seller Handbook and the Etsy Success newsletter, to help sellers improve their businesses. The Etsy forums and Teams provide opportunities for sellers to connect, share experiences, and seek advice from one another. This sense of community can be invaluable, especially for small business owners and artisans looking for guidance, inspiration, and networking opportunities. By selling on Etsy, you can benefit from the collective knowledge and support of fellow creative entrepreneurs.