Selling on Etsy and Amazon: Fees, Competition and Fit

Etsy and Amazon are the two marketplaces beginners hear about most for selling products online. Both hand you real, built-in buyer traffic in exchange for fees and competition. But they're built for genuinely different kinds of products and sellers, and treating them as interchangeable is one of the more common early mistakes in this method.

Etsy: handmade, vintage, and craft-adjacent

Etsy's entire platform identity is built around handmade items, vintage (items over twenty years old), and craft supplies, and its search and buyer expectations reflect that. Shoppers arrive specifically looking for something with a handmade or curated feel, not mass-market manufactured goods. This makes Etsy a strong fit for print on demand products, genuinely handcrafted goods, and digital downloads (a category Etsy also supports well), and a poor fit for generic manufactured products better suited to Amazon.

Etsy's fees include a listing fee per item (charged whether or not it sells, and renewing periodically), a transaction fee on each sale, and payment processing fees. That is meaningfully different from Amazon's fee structure. Calculate it into your pricing from the start rather than discovering the real margin after your first several sales.

Amazon: manufactured products at scale

Amazon's marketplace is built for a much broader range of product types, generally leaning toward manufactured, mass-producible goods rather than handmade or one-of-a-kind items. Selling on Amazon typically means one of two things. You can source existing manufactured products to resell. Or you can use Amazon's fulfilment network (FBA, Fulfilled by Amazon) to store and ship your own inventory, which removes your own shipping logistics in exchange for storage and fulfilment fees.

Amazon also hosts Kindle Direct Publishing (KDP) for self-published books and Merch for print-on-demand apparel sold directly on Amazon's own marketplace. These are distinct programs from general product selling, each with their own fee structures and requirements. Each is worth understanding on its own terms rather than assuming "selling on Amazon" means one single thing.

Competition and visibility on both platforms

Both platforms are genuinely competitive, and simply listing a product doesn't guarantee it gets found. Search ranking within each platform depends on factors like listing quality, pricing competitiveness, and, especially on Amazon, sales velocity and review count. Listing quality means titles, descriptions, and photos optimised for the platform's own search behaviour rather than general SEO. Sales velocity and review count create a real chicken-and-egg problem for new sellers with no reviews yet. Many sellers on both platforms use the marketplace's own advertising tools to gain initial visibility while organic ranking builds, which is a real cost worth budgeting for rather than assuming organic discovery alone will be enough early on.

Customer service and reviews

Reviews matter enormously on both platforms, more than on a standalone store, because they're often the primary trust signal a shopper has before buying from a seller they've never heard of. Responding promptly and professionally to customer messages, and handling returns or issues fairly, protects your review profile. On Amazon specifically, seller performance metrics (order defect rate, response time) can directly affect your account standing and visibility, not just your reputation.

Choosing between them, or using both

Some sellers use both platforms for different parts of their product range — handmade or custom items on Etsy, manufactured or bulk items on Amazon — rather than treating the choice as exclusive. If you're starting with one product idea, let the product itself decide the platform rather than picking a platform first and forcing a product to fit it.

Getting your first reviews

Both platforms have a genuine chicken-and-egg problem for new sellers: search ranking and buyer trust depend heavily on reviews, but reviews only come from sales, and sales are harder to get without reviews. There are a few honest ways through this. Price slightly more competitively on your first several listings specifically to encourage those early sales. Use each platform's own promotional or advertising tools to gain visibility while your organic ranking is still low. For Etsy specifically, lean into the platform's emphasis on your shop's story and photos, which can build buyer confidence even before you have many reviews to show.

Shop policies and what buyers expect

Clear, upfront policies on shipping times, returns, and customisation (where relevant) reduce disputes and improve buyer confidence before a purchase, rather than leaving buyers to guess or contact you with basic questions a clear policy would have already answered. This matters especially for Etsy. Buyers there often expect more direct, personal communication with a small or solo seller than they would from a large, anonymous Amazon listing. Treating buyer messages promptly and personally is itself part of what differentiates a well-regarded Etsy shop.

Understanding each platform's algorithm, roughly

Neither platform publishes its exact ranking algorithm, but both have well-documented general principles worth understanding. Etsy search weighs listing relevance (how well your titles, tags, and descriptions match a buyer's search terms), recency and renewal activity, and increasingly, factors like shipping cost and processing time. Amazon search weighs sales velocity and conversion rate heavily, alongside listing quality and keyword relevance. A listing that converts well once it gets traffic tends to be rewarded with more traffic. That creates a compounding effect, either in your favour or against you, depending on early performance.

Fulfilment: doing it yourself versus using FBA

For sellers choosing Amazon, deciding between self-fulfilment (storing and shipping inventory yourself) and Fulfilled by Amazon (FBA, where Amazon stores and ships on your behalf) is a genuinely consequential early decision. FBA typically improves buyer trust and shipping speed, both of which affect conversion and search ranking. In exchange there are storage and fulfilment fees. Factor these into your margin calculations from the start, not after your first shipment arrives at Amazon's warehouse.

International selling considerations

Selling internationally through either platform introduces additional complexity — currency conversion, international shipping costs and customs for physical goods, and potentially different tax obligations depending on where your buyers are located. Start focused on your home market before expanding internationally. That lets you learn the platform's mechanics without cross-border logistics complicating your early results. International expansion is a genuine growth lever worth returning to once your core listings and processes are already working well domestically.

Photography that actually converts

On both platforms, product photography is one of the highest-leverage things a new seller can invest time in improving. Multiple angles, genuine lifestyle context (a product shown in actual use, not just against a plain background), and consistent, good lighting across a whole shop's listings all measurably improve conversion. Unlike much of what affects marketplace search ranking, this is entirely within a seller's control from day one. It has no dependency on reviews or sales history to unlock.

Calculators that help with this

Marketplace fees, shipping and packaging all come out of your price. The profit margin calculator shows your real profit per item and the price needed for a target margin, and the side hustle income goal calculator shows how many sales a month a profit goal needs.

Who this suits, and who it doesn't

A quick gut check before you commit

Before listing your first product on either platform, it's worth asking honestly: would you personally trust this specific listing enough to buy from it, with no prior relationship to the seller? If the honest answer is no, fix it before launch. Maybe the photos feel thin, the description reads generic, or the price feels arbitrary. Otherwise a few weeks of disappointing traffic will make the same gaps obvious the hard way.

Selling on Etsy or Amazon suits people who already have, or are prepared to develop, a specific product (handmade, sourced, or manufactured) and are comfortable with the fees, competition, and platform-specific rules that come with built-in marketplace traffic. If you'd rather build your own brand and customer relationships outside a marketplace's rules and fee structure, consider print on demand through your own store, or dropshipping. Both give more control, at the cost of having to generate your own traffic from scratch. Whichever route you choose, resist the urge to expand your product range too quickly before your first few listings have proven themselves — a small, well-optimised, well-reviewed initial range tends to build a stronger foundation than a large, thinly-attended one. Depth in a handful of listings, each genuinely dialled in, tends to outperform breadth across many half-finished ones, especially in the crucial first months while you're still learning what your specific product and audience actually respond to. Get that foundation genuinely solid before spreading your attention thinner across a larger catalogue. A shop with five listings that each sell reliably will almost always outperform, and outlast, one with fifty listings that mostly sit ignored. The second version looks more impressive on a dashboard. But it's the first that actually pays rent. Build that reliable core first, and let genuine demand — not ambition alone — decide when it's time to expand beyond it.