You may be an e-commerce seller looking to expand your reach or maybe you are starting up your first online business. There are many e-commerce platforms, and two very popular ones are Amazon and Etsy.
They are both great selling platforms, but which one is the best choice for you? It’s not a simple answer because they are catered to different markets and both have their own set of pros and cons for you to be aware of!
This blog post will explore some of the differences between selling on Amazon vs. Etsy, and sharing how my personal experiences can also help you make a more informed decision about which platform is best for the type of business you want to invest your time, effort, and money in.
An Overview of Amazon and Etsy
First, let’s start by saying that selling on Amazon and Etsy can be a very rewarding experience. These two platforms give sellers access to millions of buyers and can be a great way to increase sales if your products are not already being sold online.
Amazon is one of the largest online marketplaces in existence today, with 9.7 million sellers worldwide as reported by Oberlo. Their exponential growth can also be attributed to the many different in-house products, services, and subsidiaries. Almost anything you can think of buying is available on Amazon, and the sellers range from small businesses to big corporations.
Etsy is one of the top platforms targeted towards those who are selling handmade crafts, vintage goods, and a variety of artwork across many categories. It is estimated by Marketplace Pulse that they have 5.20 million sellers. Most often, it is small businesses on the platform, and many of their sellers handle their operations all by themselves.
Now with the kind of business you currently run or plan to start, you may have a better idea now of which platform would work best for you. However, there’s still a lot more to learn and understand before making this decision.
What are the Target Markets of Amazon and Etsy?
The target market of Amazon’s main service is vastly different than the target market for Etsy.
On Amazon, you can sell any type of product, including grocery items, clothing, home goods, and a whole lot more. This makes them very inclusive and they have products for all demographics.
There are several business models to use while selling on Amazon, such as:
- Private Label – Sellers source unbranded products from manufacturers, label them with their own branding, then sell them on Amazon
- Brands – Brands that created their own products from scratch sell on Amazon as well
Even well-established brands across all kinds of categories that have brick and mortar shops often expand their reach by selling their products on Amazon as well.
On the other hand with Etsy, it is those who are fond of arts and crafts, uniquely handmade and vintage items that browse and buy on the platform. Etsy advertises itself as dedicated to this specific group of people.
I have been fortunate enough to experience 3 years of success on this platform selling all kinds of items even though they are not handmade. Buying on Etsy is a great way to support artists and small businesses!
It may sound like Amazon and Etsy are from two different worlds, but Amazon actually has a program for artisans called Amazon Handmade. Sellers who have handmade products on their Etsy page can also sell the same products through Amazon Handmade. The ability to sell through both can drastically increase your customer base.
With that in mind, let’s take a look at the different kinds of fees that sellers have to shoulder on each platform.
What are the Seller Fees on Amazon and Etsy?
There are several different kinds of fees associated with selling on Etsy. All of Etsy’s fees are listed exclusive of any value-added tax (VAT) or similar taxes that may apply.
The most significant ones for new Etsy sellers to understand are including but not limited to:
- Listing Fee – For each new item listed on the platform, Etsy charges $0.20, regardless of if it was posted through the website or mobile app. This fee is charged to sellers regardless of if the product(s) sells or not. The listing exists for a four-month period and if you choose to renew it, you will be charged $0.20 to relist.
- Transaction fee – For each sale on Etsy, sellers are charged a 5% transaction fee of the price that the item is displayed for, plus whatever amount the seller charges for wrapping and shipping the item.
- Payment processing fee – In the US and Australia, Etsy charges 3% + $0.25 per transaction for payment processing. There is a different amount for this fee depending on the country of the seller.
Etsy also offers a paid subscription called Etsy Plus, a package offering a wider range of helpful tools to aid sellers in their growth on the platform. It costs $10 per month.
To learn more about the fees not mentioned above, we recommend that you read about them directly in Etsy’s Fees & Payments Policy.
Offering different options for different ways to sell, Amazon seller hopefuls should be aware of these different expenses, including but not limited to:
- Professional Seller Account vs. Individual Seller Account – A Professional account is for those selling more than 40 units a month and pay $39.99 monthly. Individual accounts are for those who sell 40 units or less per month, and they pay $0.99 per item sold.
- Referral Fee – For each item sold, Amazon charges a referral fee between 8% to 15%, depending on what category your item falls under. These fees have changed over time, and we recommend that you always do your research to check for the latest info. Take note that it is a fee on top of seller plan fees.
Get started here to understand straight from the source about these seller fees and additional fees that were not mentioned above!
How Easy is it to Start Selling on Amazon vs Etsy?
Amazon has proven to be the leading e-commerce platform in the world, and many sellers’ lives have completely changed, including mine. I’ve experienced significant brand growth and the confidence to leave a typical 9-5 job.
But what has worked for us may not work for everybody else, so let’s talk about each platform’s strengths and weaknesses in terms of ease of establishing a successful business.
Etsy Sign Up Process
It is significantly easier to sign up as a seller on Etsy than Amazon.
On Etsy, all you have to do is create an account, open up your Etsy shop with your currency and location, set up your preferred payment method for both paying fees and receiving payments, and finally start listing products through Etsy Shop Manager.
Amazon Sign Up Process
While on Amazon, hopeful sellers have to undergo a more complicated review process by the marketplace by providing information for a registered business. Applying does not guarantee acceptance, and some people have complained of being denied for reasons they don’t understand.
If approved, sellers can then explore and understand Seller Central then start listing their products. If they are listing products through FBA, they will need to manage their FBA inventory and create a shipping plan.
What Are My Growth Opportunities on Amazon and Etsy?
In our experience, the more rigorous process has proved to be worth it because of Amazon’s huge customer base. Oberlo has reported that there are currently 150 million Amazon Prime customers, which is already a huge number to take in considering there are millions more that aren’t subscribed to Prime.
Amazon helps their sellers gain more knowledge on how to properly use the platform and improve as a seller through their Seller University series of free training videos. They are the most competition between sellers out of all the e-commerce platforms, because of the vast number of sellers who sell the same or very similar items.
To stand out from the competition, majority of sellers use softwares that provide data and suggestions to help them optimize their listings in order to keep up with their competitors.
The tool that I personally use and highly recommend is Helium 10, and it has made a world of a difference in how I manage my businesses. They have tools for keyword research, product research, listing optimization, and much more!
Want to save 50% off your first month? Check out Helium 10!
Amazon offers several sponsored ads solutions, namely Sponsored Products (cost-per-click ads for product listings), Sponsored Brands (cost-per-click ads for brands), and Stores, which is a feature of your product portfolio. Sponsored Products ads are the most popular.
Sellers only have to pay for them when a customer actually clicks on the ad.
Etsy’s customer base may be smaller, estimated in 2020 at 39.4 million buyers as reported by Statista, but it is still a community very dedicated to supporting small businesses. They help their sellers by constantly updating their Seller Handbook with best practices and tips for success, as well as providing a forum for their members to freely discuss the selling experience.
Keep in mind that traffic to Etsy does not equal sales for your business. You still need to put in the effort to make your product listings appealing to gain the attention of buyers. Luckily, 81% of Etsy sales are repeat purchases, so once you do catch the eye of a buyer, they’re very likely to buy from you again.
To grow as an Etsy seller, the first thing you need to do is find your niche. Hone your natural talents for the products you handcraft, and if possible, have a theme that all of your products are related to. This will make it easier for customers to rely on you when they are looking for a specific set of products.
Etsy even provides the same kind of advertising as Amazon’s Sponsored Products ads. It is more affordable though, at a minimum of $1 daily, and it can be changed anytime.
Both Amazon and Etsy
Both Amazon and Etsy’s sponsored ads offerings increase the chances of products appearing at the top of relevant search results for products relevant to the search keywords. Because they are based on an auction system, costs per click vary. Your ads compete against other advertisements for a space in search results.
A bid is the maximum amount you’re willing to pay for one click on a specific listing. A higher bid may improve your placement. For example, if one of your listing has a low quality score, you may need to invest in a higher bid to receive competitive placement.
The more traffic you get from these ad placements, the higher chance there is that it will lead to a sale. These types of investments in an online business have been proven to be very effective for online sellers, including me.
What are the Differences in Shipping through Amazon vs. Etsy?
Fulfillment by Amazon (FBA) – A paid service for sellers who store their inventory in the Amazon fulfillment centers wherein Amazon prepares the order for shipment and handles the delivery of the package to the buyer. It is a flat fee per unit, based on the size and weight of the product.
You can also choose to just do Fulfillment by Merchant (FBM), where Amazon sellers prepare orders by themselves and sends their sold products to buyers using traditional methods like UPS, FedEx, DHL. etc.
FBM is a better option for Amazon sellers who don’t sell at a fast rate and consider Amazon as their “side hustle”. This is because you won’t have to invest in the storage fees that Amazon charges for holding inventory in their fulfillment centers. With FBM, you just need to find your own inexpensive way to store your products and ship them on your own.
Etsy sellers are pretty much the same as FBM sellers, because they need to figure out their own way of storing their inventory, and figure out their own shipping or fulfillment service to use. Since majority of Etsy sellers are small businesses, many of them can manage their business right from home.
It is interesting to add, however, that many online sellers from all kinds of e-commerce platforms still choose to use Amazon’s FBA service as their fulfillment method, even when they don’t list on Amazon.
Comparisons of Amazon, Amazon Handmade, and Etsy
|Types of items||Products across all kinds of categories||Strictly one-of-a-kind, unique, handmade items||Marketed towards handmade, vintage, and crafts lovers. However, many sellers are able to list non-handmade items|
|Customer base||For all ages, all races, all genders. Almost everyone knows about Amazon, but not everyone knows about Amazon Handmade.||Marketed towards lovers of items from an artisan-only community||Not marketed towards any particular group of people, but majority of customers are Millennials. More people are aware of Amazon than Etsy.|
|User-friendliness for sellers||Seller Central takes a while to learn and navigate, but the platform offers free tutorials to learn faster||Also uses Amazon’s Seller Central||Etsy’s Shop Manager is reportedly easier to use than Amazon’s Seller Central|
|Order speed||Regular orders can be expected to arrive within 5-8 days, while Prime Shipping can be one day or same day delivery depending on the item(s).||Regular shipping and also eligible for Amazon Prime Shipping||If the processing time for an item purchased is 3-5 business days and the shipping method’s typical transit duration is 2-4 business days, the arrival date can be estimated at 5-9 business days from the order date.|
|Order pages (from seller perspective)||Need to click on each individual order to see further information for order such as Notes to Seller, photos, and more||Same as on Amazon||Includes more information than Amazon’s, including Size of Item, Notes to Seller, Product Title and Photo of Item all on one page|
|Product listing process||Read our tutorial||Same process as Amazon||Read Etsy’s article|
|Seller fees||Varies depending on selling plan, type of items, and additional costs. Read about them here.||Amazon Handmade requires a Professional selling account on Amazon, which will then be waived if application is approved. Read about it here.||Sellers have reported that fees on Etsy are much more practical and cheaper than on Amazon. Read about them here.|
|Seller support||Email, Phone, and Chat. They respond relatively quickly.||Same seller support for Amazon||Less convenient than Amazon’s, but is available over the phone, email, and chat|
|Buyer-Seller communication||Amazon provides an encrypted email address to protect the identities of both parties. It can be inconvenient when emails go to their Spam/Junk.|
Read our article about this.
|Same buyer-seller support for Amazon||Sellers can communicate with buyers through Etsy chat as well as their authentic email address, increasing the chance of a response|
|Returns / Exchanges / Refunds||Most sellers adhere to Amazon’s established policies, however depending on the item, some sellers may be able to refuse returns.Read about it here.||Most sellers do not allow returns of personalized / hand-crafted items. There have been cases where Amazon obliged sellers to accept returns if a customer has made a complaint||Etsy sellers have freedom to determine their policies regarding refunds, exchanges, and returns as long as they are very clearly stated on their shop.|
|Promotions and Coupons||Sellers can run promotions, create bundles, and coupons. They can also take advantage of Lightning Deals and Prime Day||Same as on Amazon||Sellers can run a sale, create a coupon, and send offers to shoppers|
The choice of whether to sell on Amazon or Etsy ultimately comes down to the type of products you are offering, your target market, and how much time you have to adjust to the differences in each platform.
While both platforms offer benefits in their own right, there is no one-size-fits-all solution for every business! There will always be instances where you have to make adjustments to adhere to how the platform does business.
If you want help determining which platform would be best for your company’s needs, consider our Amazon FBA business coaching. We can provide an opinion based on what we know about your business goals as well as our experience with both Amazon and Etsy.
For more e-commerce content, read the Sourcing Monster blog!