What Is Amazon Handmade & Should You Sell Your Handcrafted Goods On It?
Creative, crafty people everywhere have found a home on Etsy, the online marketplace for unique handcrafted items. Since its origin in 2005, Etsy has grown to become a community of 2.5 million active sellers and an impressive 46.35 million buyers. In short, Etsy is a handcrafted powerhouse.
Well, now there’s a new player in town, and it’s not just a powerhouse. It’s a genuine eCommerce behemoth. (Or at least, it’s a part of a behemoth.) Amazon Handmade is a microstore within the Amazon.com framework. It shares some commonalities with Etsy — and some key differences.
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Is Amazon Handmade right for you?
Amazon Handmade is a sales platform within the larger Amazon marketplace. It was carved out for a special type of product: handmade items, as the name suggests.
Amazon Handmade has a distinct advantage: access to Amazon’s enormous customer base. There are 112 million members of Amazon Prime alone. The company’s loyalty program is known for its free two-day shipping on many items. Prime membership represents about 82% of American households, and when you list items on Amazon Handmade, you have access to that existing customer base. They can search Handmade as another category on Amazon, much like appliances or books.
Who Can Sell On Amazon Handmade?
Unlike a vendor selling on the main Amazon platform, if you want to become an Amazon Handmade vendor you must apply and be approved before you can set up shop. For your application to be approved, you must demonstrate that you meet certain conditions:
- Items must be created, altered, or assembled entirely by hand, i.e., not from a kit.
- Items must be handmade by you; by an employee, if you have 20 or fewer employees; or by a member of your business if your business has fewer than 100 people.
- Hand tools and light machinery are allowed in a home studio or workspace, while mass-production using assembly lines or automation technology is not allowed.
- It’s okay to add your own designs to pre-made items, such as fabric or porcelain.
- Upcycling and repurposing are allowed.
- Dropshipping and reselling are off-limits.
Some of those requirements deserve a little more explanation. Amazon Handmade defines as independent makers as those who work alone or with fewer than 20 friends, family members, or employees. The following collaborative groups are singled out and approved for selling on Amazon Handmade.
- Cooperatives: A group of makers working toward common economic, social, and cultural needs
- Nonprofits & Non-Government Organizations: Groups dedicated to furthering a social cause or a shared point of view
- Social Enterprise: Organizations with a goal of empowering and supporting collectives of makers creating one-of-a-kind, handmade products.
Furthermore, only certain types of handmade items are welcome on Amazon Handmade. If you want to be an Amazon Handmade artisan vendor, you can sell products from the following categories.
- Baby items
- Beauty and personal care
- Home items
- Outdoor and home care
- Jewelry and watches
- Kitchen and dining
- Pet supplies
- Sporting goods
- Party supplies
- Toys and games
Note that no digital or downloadable products are allowed. Electronics and food and grocery items are notable exceptions also.
Amazon Handmade Fees & Pricing
Remember that huge customer base Amazon gives Handmade vendors access to? That access comes with a price. Expect to pay a “referral fee” on each sale you make via Amazon Handmade. Amazon will deduct 15% of each sale or $1 per sale, whichever is larger.
Amazon does not charge any other fees associated with Handmade sales. Amazon’s Handmade vendors currently are exempt from the normal $39.99 monthly professional selling fee.
The Pros Of Selling On Amazon Handmade
Intrigued by the thought of gaining access to Amazon’s enormous customer base? Looking for a new marketplace for your handcrafted items? Amazon Handmade is an attractive eCommerce platform, with many good qualities. Here are some of the best reasons to give Amazon Handmade a try.
- No Hidden Fees
- Exposure To A Wide Audience
- Only Handmade Items Allowed
- Artisan Profile
- Access To Prime Shipping
On the surface, those are pretty enticing reasons for giving Amazon Handmade a try. Let’s look at each more in-depth.
No Hidden Fees
With Amazon Handmade, what you see is what you get when it comes to fees. Amazon charges what they call a referral fee that totals 15% of your sales — including shipping and gift wrap charges. That may be a higher rate than you’d pay on a site like Etsy, but it’s a known factor you can consider as you weigh your options and consider your own prices. Amazon Handmade does not charge listing fees for items. Handmade items also do not require a UPC code, so that’s another thing you won’t have to bother with.
Exposure To A Wide Audience
It’s hard to think of any other single eCommerce site that is visited by and accessible to a larger audience than Amazon. Be aware, however, that the best way for customers to find you is for them to search in the Handmade category. If you’re offering handmade soap, your volume of sales will likely place you well below common household names on a typical search. Using keywords, like the scents or oils you add, can boost you, but the fact remains that unless customers specify handmade, you’ll be competing in search results with far bigger players. The good news is that Amazon Handmade listings don’t expire, and you don’t pay a listing fee. So you can allow more time for items to sell.
Only Handmade Items Allowed
Amazon Handmade is strict about allowing only handcrafted items to be listed. Compare that to Etsy’s backdoor policy of allowing third-party vendors for intermediary tasks, and you can see that Amazon offers artisans a more level playing field for selling their wares. When you’re going up solely against other creators, you’ll be better able to compete in important areas like price and speed and volume of sales, things that can impact your visibility on the site.
Once you’re approved to sell on Amazon Handmade, you’ll have a chance to set up your artisan profile. It’s essentially your home page or your storefront. You’ll receive an automatically generated URL based on how you enter your store name, so you’ll get a shareable link that is basically amazon.com/handmade/yourbusinessname. In your profile, you can share a tagline about your products or a mission statement, share how you create the items you’re selling, what inspires you, where you get your raw materials, highlight custom orders — anything that’s important to you and that will help set you apart from your competitor. You can also list your social media accounts.
The Cons Of Selling On Amazon Handmade
Like any good thing, there are some downsides to selling on Amazon Handmade. Overall, you may decide that joining is the right move for you. First, consider these points.
- It’s expensive
- Not all handmade items are allowed
- Amazon can dictate pricing
- Customers expect fast delivery
- It’s hard to market your brand
Here’s what you need to know about the possible reasons for giving Amazon Handmade a pass:
Amazon does charge a monthly fee for a Professional Seller account. However, at this time, that fee is waived for Handmade vendors. Like Etsy, Amazon Handmade makes its money through fees attached to transactions. Unlike Etsy though, Amazon Handmade does not charge a listing fee (20 cents per listing on Etsy) or payment processing fees (on Etsy, that equals 3% plus 25 cents). You will pay a minimum of 15% of the transaction on Amazon Handmade, or a maximum of 15% of the total.
Be aware that Amazon will hold the funds until your orders ship. After that, you can expect to wait up two weeks for payment to be transferred to your bank account, and that transfer process could take as long as 3 to 5 days.
Not All Handmade Items Are Allowed
It’s especially important to understand the limitations Amazon Handmade places on vendors regarding what can and cannot be sold in the marketplace. Right now, you may want to sell only items that make the list, which is great. As you grow and learn more about selling online, you might wish to expand your offerings. Amazon Handmade may change the list of acceptable items, but for now, you should proceed as if restrictions on categories and on the creation process are here to stay. Factor those limitations into your business plan.
Amazon Can Dictate Pricing
Amazon.com is known for three things: the ability to order practically anything, to get it quickly, and to pay relatively little. How do you feel about having each of those applied to handcrafted products? Some vendors have reported explicit pressure from Amazon to lower their prices; we were not able to confirm that, but it’s something to be aware of. The bigger threat, however, is probably built-in to the Amazon model. Remember, people visit Amazon to buy low-priced merchandise. Sure, they’re willing to pay for what they want. But handmade items will always cost more than mass-produced merchandise, and you need to be aware of what products you’ll be going up against.
Customers Expect Fast Delivery
What were the three things Amazon shoppers want again? Variety, low price, and speedy delivery. With the prevalence of Amazon Prime, the majority of Amazon’s shoppers now expect free two-day delivery on most items they purchase. That expectation can be hard to meet if you create custom items, for example, or make products to order, rather than holding stock on hand. Although you will have the option of setting your own timeline for shipping, and you can explain to customers why you set that timeline, you likely will be competing with vendors who are selling mass-produced items similar (at least on the surface) to what you’re offering. Given the choice, how many customers will choose quality over speedy delivery?
Also: How will you respond if your Handmade store becomes a little too successful? If an item draws a lot of positive interest, are you prepared to ramp up production to meet demand?
Hard To Market Your Brand
Amazon asks vendors to abide by a list of selling policies and a code of conduct that can be restrictive. Some of those requirements could limit your ability to market yourself and build your brand. For example, you are not allowed to contact your customers outside of buyer-seller messaging system. All messages to customers must be related only to fulfilling the order and customer service matters. Marketing messages are completely forbidden.
Furthermore, any customer information you receive, such as address and telephone number, may be used only in the process of fulfilling the order and you’re required to delete it after the sale is completed. And you may not provide prompts or links that encourage your customers to visit any external websites, including your own. Amazon goes so far as to forbid Handmade sellers from including any promotional or marketing information in shipments if that material includes links to non-Amazon websites or logos that contain links to other websites. If you want to include a business card in your shipments, you must update your card to show your Amazon URL, to drive customers to your Handmade store.
Violations of these policies could lead to your removal from the platform or even prevent Amazon from forwarding payments to you.
How To Sell On Amazon Handmade
Having weighed the pros and cons of selling on Amazon Handmade, you may be ready to give it a try. Once you understand the potential downsides, remember that it’s free to join. You’ll pay only when you make a sale. So the risk of joining is relatively low, and you may decide you have very little to lose from doing so. Here’s how to get started:
Step 1: Complete An Amazon Handmade Application
Remember, Amazon screens participants in its Handmade marketplace. So if you want to sell there, you will need to apply online. It’s a relatively simple application, with five parts.
- Input some basic information such as your name, email, and what type of Maker you are (solo, collaborative, etc.).
- Categorize your work as handcrafted, hand-altered, customized, or purchased. As you probably already know, Amazon Handmade does not allow the reselling of premade items. You’ll be asked about your design process and what percentage of production is done by you and/or your employees.
- Provide a step-by-step description of your creation process.
- Show your creations. Images are required.
- Choose your category from a list of 12 options. Remember, if your items don’t fit in one of those categories, you are not able to list them on Amazon Handmade.
Amazon does not offer any official information about how long you can expect to wait for your application to be approved. Anecdotal reports collected on various online forums suggest you could be waiting anywhere from one to four weeks. So if the items you want to sell have any seasonal urgency, or if you want to be up and selling before the holiday season, don’t delay in submitting your application.
Once you’re approved as an Amazon Handmade seller, it’s time to take the next step toward online sales.
Step 2: Create Your Artisan Profile
Before you can list any items for sale, you will need to complete your Artisan Profile. This is your chance to tell your own unique story and inform potential customers why they should buy from you. Describe your Handmade listings in detail, including the materials you use to create them and what makes them special. Explain what inspired you to create these items. List (but don’t link to) your social media accounts. Add some photos, too, of yourself and your products. Don’t worry; you can always come back later and edit this information.
When you’re done setting up your Artisan Profile, Amazon will assign you a unique URL that you can use to drive traffic to your Handmade storefront.
Step 3: Create Your Store
Amazon offers support for new vendors as they set up their Handmade stores, including a thorough 38-page guide, dedicated support, and online help. Start by exploring Seller Central. That’s where you’ll track inventory, add new products, find information about orders and returns, and more. It’s also where you’ll find advertising functions, reports, shipping settings, and customer metrics, among other important functions. There’s also a seven-part Handmade 101 email series that covers some basic important items.
Step 4: Add Your Items
From Seller Central, you will be able to list your first products. Click on Inventory and choose Add a Product. From there, you’ll be guided through a series of steps that includes choosing the right categories to list your product, so it reaches the right buyers. Include a short product title describes the product so it appears in searches. You don’t need to add specifications or options yet. But you will need to include price and production time. You will have up to 30 days to ship from the time of order. But remember, Amazon shoppers have come to expect speedy shipping. So if there’s a reason your shipping takes longer than they hope for, explain why.
You will have the chance to add images, too. Amazon’s rules for images require that you show your products without pros, distractions, or watermarks. You can include alternate images that show more detail, the item’s scale, or what kinds of customization you can offer. There’s also a box that lets you tell customers how your product was made. Be sure to use that to highlight what makes your items special.
You’ll be guided to choose keywords that will make your listings show up in customer searches, too. After you go through all the prompts Seller Central offers, you will be ready to publish your listing. Don’t worry, you can come back and make changes any time. Listing multiple items is made easier by a copy feature that lets you duplicate a listing, transferring most of the product information from a completed listing. You’ll have to add new images for each listing, though.
Step 5: Optimize Your Listings
Amazon offers an online style guide that’s full of helpful information you can use to fine-tune your listings. There’s a whole section on creating effective product images, for example, followed by specific recommendations for several categories of listings allowed on Amazon Handmade. Amazon has experience using visual imagery to draw customers in, and from general tips on how to make it easy to zoom in on your images or how many pixels images should be, to specific advice on showing your jewelry in the best light or what to include in alternate images, it’s advice you can use to make listings that move products.
Step 6: Set Up Your Shipping Policy
Seller Central is also the place you’ll go to set up your store’s shipping policy. As you create your site, Amazon sets up a default shipping cost for your store. You can choose to set up your shipping charges by weight or by a price banded model. You cannot set different shipping rates for each item.
Amazon assigns expected shipping dates based on the production time you enter in Seller Central when you create a listing. If you put down a production time of eight days, that falls within a preset range of six to 10 days. (Other ranges include one to two days and 23-30 days. There is no way to alter these ranges.) You have the full 10 days to ship that product before Amazon marks it as late. So be certain that you enter accurate production time when you list products. Remember that while you can always update product information, including shipping time, you won’t want to do it after a customer places an order and receives an estimated ship date.
Step 7: Add Other Amazon Services
Once your Handmade store is up and running, there are two Amazon services that could make running your store easier.
Amazon offers a service, Fulfillment By Amazon (or FBA), that lets you hand off the chore of storing your products and shipping customers their orders. Vendors who use FBA allow Amazon to store their products and ship them from Amazon warehouses. From there, Amazon handles all the elements of shipping, customer service, and returns. That means customers’ orders for your items can be shipped faster, and you’re able to continue crafting those handmade items to sell, instead of pulling and packing orders.
When you sign up for FBA, your products become eligible for Prime, which can make them more attractive to Amazon shoppers. FBA comes at a price, of course. You’ll pay a fee to Amazon for storing and shipping your products. What you’ll pay will depend on what you’re selling, its size, and how much it weighs. Learn more on Amazon’s FBA page. In general, smaller, lighter items tend to incur lower fees.
One word of caution. When you use FBA, you commit to having enough stock in the Amazon warehouse to fulfill orders as they come in. Think about the time it takes you to create your products, then factor in the time it will take to ship them to the Amazon warehouse and have them processed there. It can be a successful business strategy for many. Just make to allow enough time to continuously create adequate stock of all the products you list with FBA.
When you sign up for Seller-Fulfilled Prime (SFP), you agree to deliver products to Amazon Prime customers directly from your own stock. That means you are committing to two-day delivery at no additional charge to customers. Remember that you can factor in shipping charges when you set prices for the items you list on your Handmade store.
To participate in SFP, you must ship almost all of your product via Amazon’s Buy Shipping Services and pass a trial period to prove that you can ship 99% of your orders on time with a cancellation rate of 0.5% or less.
Step 8: Connect With Your Accounting Software
Once you’ve got your Amazon Handmade store up and running, don’t forget to connect your online accounting software to keep things running smoothly. Some programs, like QuickBooks Online, make it easy to integrate directly with Amazon. If the accounting software you’re using doesn’t integrate with Amazon, you’ll still need to import your sales to stay on top of your accounting.
If you’re not already using an accounting solution, or if you’re looking for a better option, set your Handmade store up for success by choosing one now. When you start using the right online accounting software, you’ll be able to focus on the part of your business that only you can do best: making great handmade products to sell.
Amazon Handmade VS Etsy
Amazon Handmade and Etsy have a lot in common. So how can you decide which is right for you? Examine the differences between the two platforms.
Amazon Handmade offers a simple fee structure, taking either $1 per transaction or 15% of each sale (including shipping and customization fees), whichever is greater. Etsy, on the other hand, offers a complicated fee structure and two subscription options. If you have been selling with Etsy, you should be able to calculate which platform will cost you more. If you haven’t yet joined Etsy, you can find information at the site’s fees here. One important point that’s worth repeating: Amazon Handmade does not charge listing fees, and listings never expire. That means you may be able to give products the time they need to find their buyers.
Both Amazon Handmade and Etsy have wide audiences and great reach. However, again, there are key differences between those audiences. Etsy is a community of 2.5 million active sellers and 46.36 million buyers who visit Etsy specifically in search of handcrafted items to buy. By contrast, Amazon had over 2.5 billion visits in the month of May, 2020, according to Statista. To say that’s a lot of potential customers would be an understatement. However, those shoppers aren’t necessarily in search of handcrafted items. Their goals are low prices and speedy delivery. You certainly can compete on Amazon, if you’re willing to commit to those two things. Does your production process allow that? Remember that Amazon allows you 30 days from order placement to delivery.
Etsy is almost synonymous with handmade, so it might seem like the natural choice. Yet Amazon has far greater reach overall. To make your store stand out on Amazon, you will need to commit to doing the hard work of earning that visibility. That means driving traffic to your store through online marketing and social media campaigns. You’ll need to choose the right items to list at the right price and tinker with your listing titles until you find the right keywords. You should also encourage customers to leave feedback and reviews after they purchase from your store.
The Bottom Line: Is Amazon Handmade Right For You?
Amazon Handmade won’t be the best choice for every vendor. However, it makes sense for anyone who has an established production procedure that is reliable and speedy. If that sounds like you, and if you’re ready to jump into the biggest online marketplace in the world, you should have all the information you need to make an informed choice about Amazon Handmade. If you meet all the criteria listed and can pass the application process, you won’t pay Amazon anything until you make a sale.
If you’re still weighing your options, make sure you have the information you need to make the right choice. After learning about Amazon, get to know more about Etsy next. The good news is, you can start an account with Etsy at a cost of $0 and give it a try, too. The results you see after a trial period will help you decide which platform will work best for you.