Your guide as a Canadian businesses to choose between Amazon and Etsy

Are you a Canadian business looking to start selling your products online? With the rise of e-commerce, reaching customers worldwide is easier than ever. However, with so many options available, it can take time to decide which platform is best for your business, especially between Amazon and Etsy.

In this guide, we'll break down the key differences between Amazon and Etsy and help you make an informed decision for your business. We'll also introduce Wise, a financial technology company that can help Canadian businesses with international transactions.

Breakdown of the guide:
A Closer Look At Selling On Amazon In Canada A Closer Look At Selling On Etsy In Canada Key Factors To Consider When Selling On Amazon Or Etsy in Canada 1. Fees / Pricing 2. Audience / Product Fit 3. Competition / Discoverability 4. Fulfillment / Shipping 5. International Sales Potential 6. Seller Support and Policies Which Platform Is Better For Your Business?

A Closer Look At Selling On Amazon In Canada

Amazon is a global e-commerce giant, with millions of customers globally. In Canada, Amazon has Amazon.ca, which offers a convenient way for Canadian businesses to sell their products online to Canada, the US, and beyond.

The typical customer on Amazon.ca is looking for a wide range of products at competitive prices. This makes it a great platform for businesses that offer a variety of products, from electronics to household items.

Amazon offers two options for fulfilling orders: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).

Amazon handles storage, shipping, and customer service for your products through its FBA program. While this may ease some of the burden on your business, it does come with additional fees.

FBM allows you to handle all aspects of fulfillment yourself. This gives you more control over the process while requiring more resources from your business.

Selling on Amazon offers the significant advantage of global reach. By listing your products on Amazon.com, you can reach customers globally and make more money than you could internally. Amazon has specific marketplaces in countries like Mexico and Brazil, making it easier to expand into these markets.

A Closer Look At Selling On Etsy In Canada

Etsy is an online marketplace for handmade, vintage, and unique items. It has gained immense popularity among Canadian consumers for its wide range of products from independent sellers.

With over 96 million active buyers, Etsy is a great platform to reach a large customer base.¹ Its focus on niche products means less competition for sellers than larger e-commerce platforms like Amazon.

Etsy's customer base is mainly women (58.14%) between the ages of 25 and 34 (29.63%).² If your business specializes in products that appeal to these demographics or the one-of-a-kind items Etsy is known for, it could be a great fit.

Sellers on Etsy can ship internationally from Canada, but they must account for varying shipping costs depending on the destination and weight of the product. As a Canadian business, you may also have to deal with additional customs fees and taxes when shipping internationally.

Etsy has a global reach with customers from the US (57.77%), the United Kingdom (9.15%), Canada (4.87%), Germany (4.09%), Australia (2.88%), and more.² As a seller on Etsy, you can connect with buyers worldwide and expand your customer base and income.

Key Factors To Consider When Selling On Amazon Or Etsy in Canada

1. Fees / Pricing

Amazon charges a monthly subscription fee of CA$29.99 for professional selling accounts, while individual accounts are free but charge an additional CA$1.49 per item sold. On top of this, Amazon also takes a referral fee, which can range from 8% to 45%, depending on the category of your product and the cost.³

Etsy charges a listing fee of CA$0.27 per item and takes a transaction fee of 6.5% of the item's sale price, along with 3-4% of the cost as commission. They also offer optional advertising and promotional features for an additional cost.⁴

Make sure to analyze your profit margins and choose the platform that aligns with your budget and goals as a business.

2. Audience / Product Fit

Amazon has a much larger audience, with over 310 million active users globally.⁵ This means a higher chance of reaching more customers and making more sales on Amazon.

Etsy has a specific niche market of handmade, vintage, and unique items. If your products fall under this category, then Etsy may be the better platform for you to sell on.

3. Competition / Discoverability

Both Amazon and Etsy have a vast number of sellers, which means there is high competition on both platforms. Customers discover products differently on each platform.

Amazon uses an algorithm called A9 to rank product listings based on relevance and performance. Your product will only be visible if it's highly relevant to the search query and has a good sales history. For new or lesser-known businesses, it may take longer to gain visibility on Amazon.

Etsy relies heavily on tags and keywords within listings for discoverability. This gives smaller businesses with niche products a better chance of being found by customers searching for specific items.

4. Fulfillment / Shipping

Amazon has a program called Fulfillment by Amazon (FBA), where sellers can store their products in Amazon's warehouses and have them shipped directly to customers. Amazon’s FBA program removes the hassle of packaging, and shipping from the seller’s responsibilities, but it incurs additional costs.

Etsy allows sellers to handle their fulfillment or use third-party services for shipping. This gives businesses more control over the process but also requires more time and resources.

5. International Sales Potential

Amazon has a larger global reach allowing sellers to tap into a wider customer base. Etsy also offers international sales letting sellers list their products in local currencies, and lets them ship directly from their country of origin.

Regardless of which platform you choose, you'll need a reliable and cost-effective way to handle cross-currency transactions. This is where Wise comes in.

For handling cross-currency transactions, Wise offers a multi-currency account, making international payments easier and more affordable. You can receive payments in the same currency as your customer, pay suppliers in their local currencies, and save on conversion fees. Its batch payments feature lets you make up to 1000 international payments at once, saving you time and effort.

6. Seller Support and Policies

Amazon has a more structured and strict set of rules for sellers, with a focus on customer satisfaction. This means that if you receive negative feedback or complaints from customers, it could affect your overall selling performance.

Etsy has a more lenient approach towards sellers and allows them more control over their shop policies. However, this also means that as a seller, you may have to handle any refunds or reimbursements directly with your customers.

The Wise business account helps sellers with international transactions and refunds, allowing you to receive payments and make reimbursements without hefty currency conversion fees.

Amazon charges a monthly subscription fee starting at $29.99 plus a referral fee on each sale, ranging from 3-45% depending on the category and cost.³ For Canadian businesses, Amazon Handmade charges a 15% referral fee on each sale.⁶

Etsy has lower subscription fees ($0.20 per listing and a 5% transaction fee) but charges an additional payment processing fee of 3-4%.⁴ You should calculate the estimated costs to determine which platform will cost you more.

You can also sell the same items on Etsy and Amazon, but each platform may have different rules and guidelines for selling certain products, and certain products may do better on one platform than another.

Which Platform Is Better For Your Business?

Amazon is ideal for businesses looking to expand their global customer base with services like Fulfillment by Amazon (FBA), which handles storage and shipping. This allows you to focus on other aspects of your business.

Etsy is suited for businesses offering handmade or unique products, with lower fees and an easy setup process. It’s more cost-effective for smaller businesses.

Before making a decision, evaluate your specific products, budget, and goals as a business. If you're selling mass-produced items or are looking for global reach, Amazon may be the better choice. However, if you have unique or handmade products and want low fees , Etsy could be the way to go.

Both platforms offer international sales opportunities for Canadian businesses. However, it's essential to research and compare the fees, features, and target audience of each platform to determine which one aligns best with your business goals.

Wise Business can help manage international transactions, offering a multi-currency account to receive payments in different currencies and avoid costly conversion fees. Wise also provides low-cost cross-border payments and integration with business tools such as Sage Business Cloud for efficient accounting and bookkeeping purposes.

So get started with Wise today and discover the power of finance in your own hands, whether you choose Amazon or Etsy.

Get your Wise business account in a few clicks

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Sources:

1. Business of Apps
2. Skillademia
3. How pricing works on Amazon.ca
4. How to sell on Etsy Canada
5. Yaguara
6. Amazon

Sources verified on 17 June 2024