A little competition is beneficial for peer-to-peer businesses, or is it? In an article for The Wall Street Journal, Greg Besinger (@gbensinger) announces that Amazon will dedicate a section of its site to Handmade, a marketplace that resembles Etsy.

Etsy has been around for a decade and amassed a clientele of 22 million consumers. Amazon, however, is at an advantage with 40 million people logging it to purchase their next handmade card, or gnome-inspired coffee mug.

The listing was created in response to customer requests. Sellers on Handmade pay a 12% transaction fee, whereas sellers on Etsy’s pay 3.5%, which also includes a 20-cent listing fee. Although Etsy stock has plummeted 53% since going public last May, from $30 to $11.34 a stock, it seems that the demand for handmade products is strong enough to influence a big brand like Amazon to cash in.

I wrote about Etsy going public, awarding their artisans and partners 5% of company shares. It’s unfortunate that their stock has gone down so much in the last couple of months. I wonder how this latest announcement from Amazon will affect them.

Laura Owens, who began selling her jewelry on Etsy, will list 130 of her her handmade creations on Handmade to test it out. She thinks it will attract new customers and give her a second platform to showcase her creations. Owens says,

“I will not quit Etsy, though, as it is a force to be reckoned with and is also a proven selling platform.”

It’s interesting to see how different factors, such as negative press coverage or questionable business practices, can affect a company’s stock value. Will Etsy be able to survive with a big name like Amazon taking its piece of the peer-to-peer pie? We’ll just have stay tuned to find out. Either way, it’s becoming more and more clear that building a peer-to-peer marketplace, or adding one to an existing business, is much more than a fad.

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