$10.46 billion. That is how much Etsy sellers generated in gross merchandise sales during 2025, spread across a marketplace that counted 86.5 million active buyers and 5.6 million active sellers by year's end, according to Shopify's 2026 platform comparison. Yet even with numbers that large, a growing share of those sellers are looking for the exit.
How Etsy and Amazon Handmade Fees Stack Up
The two platforms take very different approaches to cost. Amazon Handmade charges approved sellers a 15% referral fee on every order's total price, which covers both payment processing and the platform cut in a single line item. There is no ongoing monthly subscription after the first month's $39.99 Professional plan charge, and there are no per-listing fees.
Etsy selling fees start with a lower transaction rate but layer on additional costs. For a US seller with a US bank account moving a $30 item with $5 shipping, Shopify's analysis shows Etsy costs $1.47 less on that specific order. Etsy's processing fee for US accounts is 3% plus 25 cents, assessed on the gross order amount, while Amazon folds processing into its flat referral rate. Sellers outside the US face different processing rates on Etsy and different referral rates on Amazon, so comparing average order value against sell-through rate is the practical way to model true costs.
Etsy also admits sellers openly and enforces its handmade scope after listing, while Amazon runs an application and audit process before approving sellers to list in any of its 14 eligible handcrafted categories. Approved Amazon Handmade sellers can fulfill orders themselves or route them through Fulfillment by Amazon.
Source: Shopify
Buyer Intent Differs More Than Traffic Does
Amazon's raw traffic advantage is hard to ignore. David Shoap, who sells handcrafted pins as Sarah's Treats and Treasures, described the effect bluntly in Shopify's guide: having a listing on Amazon increases exposure "by thousands of percentage points" just by virtue of the platform's daily visitor volume. But that volume comes with a caveat. Amazon shoppers arrive looking for a product; Etsy shoppers arrive specifically seeking handmade or vintage goods. That distinction shapes conversion rates, customer relationships, and the kind of buyer a maker actually attracts.
Neither platform, however, gives sellers ownership of the customer relationship or the storefront itself.
Sellers Are Fleeing Etsy Over AI and Drop-Shipping
Behind Etsy's headline numbers, a quieter crisis is unfolding. Wired reported that longtime sellers are migrating away in large numbers, frustrated by what they describe as lax enforcement of platform standards. One illustrative case: a watercolor artist who made more than $40,000 on Etsy in 2021 watched her sales fall 30% in 2022 and then another 50% the following year as AI-generated pet portraits flooded search results and undercut her prices.
In 2024, Etsy officially announced it would continue allowing AI-generated art on its platform as long as sellers disclosed it. That policy decision pushed the artist to post a video in January 2025 announcing her departure from the platform. Seller frustration is visible across Reddit threads in r/EtsyCommunity, where posts describe an influx of unlabeled AI content that Etsy has not meaningfully addressed.
Source: Wired
A New Competitor Targets the Gap
The dissatisfaction is large enough to attract new entrants. Fybe, an online crafts marketplace, opened to vendors on August 1, 2026, explicitly prohibiting AI-generated content and drop-shipping. The platform relies on human moderation and direct seller conversations to verify that all products are genuinely handmade. Fybe founder Rachel Powell told Wired that both buyers and sellers on Etsy "are a little discontented" and that a moderated alternative fills a real need in the community.
For sellers weighing all three options, the Shopify guide also walks through signs that a maker has outgrown any marketplace model entirely, including case studies from Old World Kitchen and Oakywood, both of which moved to independent storefronts.
Final Thought: Etsy's scale remains formidable at $10.46 billion in annual gross sales, but the platform's AI content policies are accelerating seller departures and opening the door to fee-competitive rivals on both ends of the market.