We hear a lot of success stories about people selling through Amazon FBA, but that doesn’t really appeal to makers who want to sell handmade products on Amazon. That is until Amazon Handmade came along. The real question is this: can you make money selling handmade goods on Amazon, and if so, how?
Getting Started On Amazon Handmade
I currently sell on Etsy and absolutely love it, but we all know that multiple revenue streams are the way to go. Combined with the theory of never building your business strictly on someone else’s platform, I figured I’d try out Handmade at Amazon.
Not everyone can sell on Amazon Handmade, you have to apply to sell. It felt a little intimidating, especially compared to Etsy’s easy sign-up process. They asked for things like examples of your products, photos of your workspace and hand-making process.
Amazon also requires that all products be handmade by you or an employee. If your company has 20 or fewer employees. Handmade specifically prohibits mass-produced products or handmade products from a different artist. These rules are stricter than Etsy’s current guidelines, which allow manufacturing partners.
When Handmade at Amazon first launched, it took four to six weeks for sellers to be approved. I was told that it would take up to a week to receive my invitation to join Handmade, but I got the email within a few hours.
There was also significantly more vetting in the early days of Handmade, with a strong likelihood of the company placing test orders to ensure the products were actually handmade.
Listing Products on Amazon Handmade
Handmade requires a Professional Seller account, which is $39.99 a month. As of now, the fee is waived and Amazon keeps extending the date.
Amazon Handmade doesn’t charge listing fees and the listings never expire- two advantages over selling on Etsy. Handmade does charge a 15% referral fee on the total sales price, including shipping, with a minimum of a $1.00 fee.
For comparison, Etsy has a transaction fee of 3.5% and a processing fee of 3% plus $0.25. We’ll come back to this in a minute.
For what it’s worth, Handmade at Amazon also has an FBA option for products that don’t require or allow customization. A positive is that your items can be available for Prime shipping.
A strong negative is the amount of inventory required to be made ahead of time and also sent off to a warehouse, so you can’t even use those items if you make a sale on a different platform.
Can You Actually Make Money?
Making money in an online product business depends on a handful of things. These can be your customers’ ability to find your products and your ability to charge enough to cover your costs – including your time.
Amazon has an incredibly large reach, so part of the appeal of Amazon Handmade is that makers get access to all of those people – people who already know, trust, and are used to shopping on Amazon.
That large reach only matters if those people can easily get to your products. If you go to Amazon and search for a product it auto-selects a category to display results from. Under normal operating circumstances, that’s fine because it does a pretty good job of giving you the products you asked for. However, since Handmade is a category of its own, those items don’t show up in the initial search.
If you want a pinback button from a certain Handmade seller, you have to manually select that category. That’s not a big deal for someone who doesn’t care who made their product, but it doesn’t help Handmade sellers.
Then there’s the issue of costs.
We’ve already determined that Amazon fees alone are higher than Etsy fees, so if you’re an established Etsy seller, your profit margin will be lower on those sales made on Amazon if you make the listings identical.
There’s also the possible monthly $39.99 charge to consider. You could raise your prices on Amazon… but there are also reports floating around the internet of Amazon requiring sellers to lower their prices.
Another important factor in making money on Handmade at Amazon is whether or not Amazon customers are your target market. Typical Amazon shoppers want things quickly and with minimal effort on their part.
If your products take several days to make, not including shipping time, you’re already at a disadvantage. If your products require any kind of communication or approval by the buyer, you might have an issue. Most people don’t expect to talk to the seller they’re buying from on Amazon – if they even realize they’re buying from an individual seller at all!
Can You Be Discovered?
On Etsy, it’s pretty easy to get to a seller’s profile or see their other items. On Handmade at Amazon, the site operates the same way we’re all used to on Amazon. It doesn’t give much focus to the profiles of individual sellers.
Handmade has plenty of profile space to populate, with pictures of the artist, their workspace, and their products, but it took me several tries to find the profile of a particular artist.
On Etsy, the more popular an individual shops get, the more likely it is to lose some of its brand recognition. Instead of someone remembering that they bought an item from a specific shop, they bought it on Etsy.
This makes it harder and less likely for them to recommend the exact shop to someone else). I fear that that sentiment applies more heavily to selling on Amazon.
I don’t remember which items I bought from an individual seller and which products I bought from Amazon itself. I don’t even check. Even when I rebuy an item, I’ve never attempted to get it from the same exact seller. That kind of thing doesn’t matter on Amazon, but it matters to artists.
Amazon Handmade also doesn’t allow any kind of branding or marketing material to be sent out with your products. As a seller, you’re not supposed to encourage buyers to leave Amazon. This is frustrating and worrying because so much of growing an online business is about creating customer loyalty.
It isn’t an end-of-the-world rule, but it is something that sends up a few red flags in the eyes of this seller.
Etsy also does fantastic marketing for sellers, with regular emails featuring products and search terms. Even if your product doesn’t make one of those emails, the search feature on Etsy works differently from on Amazon. The search results are usually coming from all categories instead of an auto-selected one.
Etsy also sends out seller specific emails with tips and news. Amazon might do that as well, I can’t see those being as valuable or as artist-tailored as Etsy’s.
So What’s a Maker to Do?
Several sellers have reported doing significantly better on Handmade at Amazon than Etsy. There could be a variety of factors behind that. Despite knowing that I sell on Etsy, some of my friends are still wary of purchasing from the platform.
That fear might be assuaged by Amazon’s name but there’s still the issue of purchasing from a unique seller instead of Amazon the company.
Amazon also withholds the money from the sale until the order has shipped. Etsy releases it immediately. I don’t need the money from the order to make the order, but some artists do. This is just another example where Amazon’s platform is built in a way that doesn’t cater to artists selling handmade products.
It isn’t terrible, per se, but it is something to be aware of before making the jump. When Handmade at Amazon launched, media outlets claimed that it would kill Etsy and that artists would be jumping ship left and right. So far, I haven’t seen too many of those. If artists jump ship away from Etsy, it’s usually to their own website.
Finally, Amazon does have a bit of a reputation for taking products that are selling well and making their own version of them – and then selling them cheaper. There’s nothing really stopping them from finding out which products sell well and then replicating them under their own brand. Is it likely? Maybe not, but it’s certainly possible.
Is Amazon Handmade Worth a Shot?
When it’s all said and done, I’ll probably still attempt to sell on Handmade at Amazon, if only because I really like the potential it has.
I hardly see it as competition for Etsy, and quite frankly, when I’m looking for a handmade item, I’ll still go to Etsy first. My favorite university professor told me once that
“When you finally call an ugly dog an ugly dog and stop pretending that it isn’t, you can enter it in an ugly dog contest.”
I’m not calling Handmade at Amazon an ugly dog, but maybe we shouldn’t assume that it’s fantastic just because Amazon made it. Maybe it isn’t the best market to sell handmade products. Maybe it will be one day.
In the end, take a look at your profit margins and decide if they can support higher fees and the learning curve associated with a new platform, and make your choice from there.