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Etsy may face 'Handmade' rival from Amazon

Craft makers, would you decamp from Etsy for someplace called Handmade at Amazon? The e-commerce giant is looking to gauge your interest.

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Uh-oh, Etsy. Amazon may have a Handmade challenge for you. Screenshot by CNET

A decade into its run on the Web, the crafts marketplace Etsy may soon face its biggest challenge yet.

E-commerce titan Amazon has been putting out feelers to sellers on Etsy, pointing them to an online form thanking them for their interest in "Handmade at Amazon." They're asked to fill out the form with information about their business and the items they sell -- from jewelry to gourmet goods to toys and games -- with a promise to keep respondents updated "while we set up shop."

Etsy's artisans began posting notes about Amazon's inquiries to Etsy's online forums late last week, and the news was noted by the Wall Street Journal on Friday evening.

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Etsy as it appears on iOS. Etsy

Amazon and Etsy both declined to comment to CNET.

Brooklyn-based Etsy has built a business by connecting buyers and sellers of arts and crafts, deriving its revenue from listing fees and from commissions on items for sale. The potential launch of Amazon's Homemade marketplace comes as it enters a new financial phase. In April, the 10-year-old Etsy began trading as a public company on the Nasdaq exchange.

At the end of the first quarter of the year, Etsy reported more than 1.4 million active sellers (up 26 percent year over year) and 20.8 million active buyers (up 37 percent). Its revenue for the period was $58.5 million on gross merchandise sales of nearly $532 million -- increases year over year of 44 percent and 28 percent, respectively.

The Wall Street firm Wedbush Securities last week called it unlikely that a big e-commerce company like Amazon, eBay or Alibaba would want to acquire Etsy "as they already have most of Etsy's customers and many of Etsy's sellers." Rather, Wedbush said in a note to investors, "We believe if the bigger players wanted to specifically address this [niche] ... they would only need to segregate a handcrafted section and funnel existing buyers and sellers."

But as the Wall Street Journal noted, Etsy's fees to sellers are notably lower than those of Amazon.

Amazon, which got its start as a bookseller, now has dozens of marketplaces in areas as far afield as fine art, laboratory and scientific equipment, musical instruments and business supplies. It already has a marketplace dedicated to "Arts, Crafts & Sewing." Through its Amazon Prime subscription service, meanwhile, it also serves up streaming video and music, unlimited cloud storage of photos and other perks.

CNET News' Ben Fox Rubin contributed to this report.

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