Amazon took a crap on Etsy’s stock price yesterday morning when it announced Homemade, a new online store for artisanal goods that’s going to be competing directly with Etsy. As the name implies, Homemade guarantees that all of it’s products are homemade, in contrast to Etsy, which started allowing users to sell manufactured goods back in 2013, and even started a new program recently that puts its artisans in contact with small-scale manufacturers so that they can sell more of their products. You would think that this limitation would hinder Homemade, but it’ll probably do the opposite, and pair that with the fact that the service will use Amazon’s second-to-none logistical infrastructure, Etsy has a lot to worry about.
Online retail giant Amazon has been stepping on a lot of toes lately. In July, it launched Home Services, providing professional help for home projects and challenging startups like TaskRabbit and home improvement stores such as Home Depot. On Thursday, Amazon launched its offensive against the online artisan bazaar Etsy by opening its own store called Handmade, selling an array of handcrafted goods from jewelry to furniture. Amazon’s announcement threw an instant and fleeting gut punch at Etsy’s stock prices early in the morning. Etsy, which went public in April, saw a 7 percent fall in its stock from when the market opened Thursday morning. With Etsy’s stock price about 55 percent down since debut price of $31 on April 16, Amazon pounced by putting its titanic weight behind its newest project. It opened with a catalog of more than 80,000 products from 5,000 sellers in over 60 countries. “We believe we are the best platform for creative entrepreneurs, empowering them to succeed on their own terms,” says Etsy CEO Chad Dickerson on Thursday. “Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can.”