Thursday, October 8, 2015

Handmade on Amazon

I applied and was accepted to sell on Amazon's new Handmade venture. I have been dragging my feet on doing it for several reasons, the largest being that I don't want to agree to their Terms of Service. I didn't even get to the part where I start to set up my shop after I began to read the fine print:

4. License.

You grant us a royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and license to use, reproduce, perform, display, distribute, adapt, modify, re-format, create derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of Your Materials, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties; provided, however, that we will not alter any of Your Trademarks from the form provided by you (except to re-size trademarks to the extent necessary for presentation, so long as the relative proportions of such trademarks remain the same) and will comply with your removal requests as to specific uses of Your Trademarks (provided you are unable to do so using standard functionality made available to you via the applicable Amazon Site or Service); provided further, however, that nothing in this Agreement will prevent or impair our right to use Your Materials without your consent to the extent that such use is allowable without a license from you or your Affiliates under applicable law (e.g., fair use under United States copyright law, referential use under trademark law, or valid license from a third party).

Because I would be selling greeting cards with reproducible images on them, I was quite disturbed by the "reproduce" part of this statement. As always, when I have questions, I head to the Etsy forums to see what people are saying. A very educated seller posted that, "One of the many complaints about Amazon is that when a product line does really well, they start manufacturing it for themselves or selling direct from manufacturers as indent orders. They have closed sellers' shops in the past when they have started carrying the product themselves."

While I don't kid myself that I would sell enough to be overtaken by Amazon, I refuse to sign up for something that I may regret one day. I am also disheartened by the fees. The monthly fee will be waived until August 2016, but after that there will be a charge of $40 every month to sell. Aside from that, there is also a 12% commission taken by Amazon on every sale as well as listing fees. That's a big chunk of change for the small items I would sell. Perhaps if I sold very expensive items but I sell small, very affordable items. It doesn't add up for me at this time but I am excited for all the artists jumping in and checking it out. For now, I'll hang back and see what they say and keep exploring a more focused way of selling to local shops that is manageable, opens other doors and doesn't cost me anything. But I think The Huffington Post said it best:

If you are a maker, artisan or designer selling on Amazon Handmade, there seems to be a lot to benefit from the platform at first glance. Amazon is the world's largest retailer, attracting 244 million active users. It would be next to impossible to try to duplicate that kind of traffic for your own eCommerce store.

But much of the benefit ends there.

To begin unraveling what you could gain and what you could lose by selling on Amazon Handmade, you have to first look at the risks of building your business on a platform that you don't own.

It's nothing new for Amazon to "partner" with small businesses. Since 2012, Amazon Marketplace has invited Third Party Sellers to sell anything from pillows to jewelry to clothing that is mass produced in factories around the world.

Over time, though, these sellers have seen Amazon increasingly use its Marketplace to undercut third-party sellers using their own sales data, as reported by The Guardian and The Wall Street Journal. Many of these seller have been driven out of business in the process.

Joanne Nelson of Nelson Beads has been a seller on Amazon for 15 years. She developed a profitable business selling overstock books until Amazon purchased from the same suppliers and created their own Bargain Book section. They could buy the books for less and offer them at steep discounts, undercutting the prices third-party sellers were asking for and thereby lowering their margins.

"Amazon has made it possible for I-don't-know-how-many people to create businesses or just bring in a little extra cash," said Nelson. "But make no mistake: if you list on Amazon, you are essentially a drop shipper for them. You are selling to THEIR customers, not your own. Bottom line, don't ever build you business on someone else's platform."

So that begs the question:

Why should we expect anything different from Amazon Handmade?

What's stopping Amazon from using this platform to track the newest trending products by emerging artisans and designers, as they've done to other sellers in the past?

Do we really expect them to sit on that data, instead of using it to immediately offer copies or near-copies of bestselling products at a lower price point?

As someone who works with entrepreneurs and makers, I know firsthand that copies and counterfeits are rampant in this industry -- it's an unfortunate part of doing business.

But combine that with offering Amazon real-time, firsthand access to your sales data, as well as a direct communication with all of your customers, and you're virtually handing over your business on a silver platter.

Sarah Resnick, the artist and maker behind Advah Designs, considered applying to sell on Amazon Handmade and ultimately decided against it.

"As an artist who runs a niche business creating Jewish prayer shawls and wedding canopies, I have little concern that my own work would ever reach Amazon's radar or be worth their effort to copy and sell," said Resnick.

"But as a consumer who thinks a lot about how to support small businesses that nurture my community, I am sad at how much we are willing to give up for the siren call of free shipping, or the convenience of ordering toilet paper, extension cords and a new painting from the same online shopping cart."

We know that Amazon's policies are bad for its workers, bad for writers, bad for local businesses -- and now, it's bad for artisans and designers, too.

We don't need the world's largest retailer to control access to the ideas and designs of some of our most creative people. They already own enough of everything else.

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