Etsy has seemingly hit the big time in the past year.  The artisan’s online marketplace went public this spring, but has had a rocky start as a public company, with volatile stock prices.  Well, when the underdog rises to the top everyone takes notice, including much larger, more nimble competitors.

Yesterday, Amazon launched Handmade, the mega-retailer’s answer to the crafty success of Etsy.   The program will start with 5,000 artists, most from the US, and more than 80,000 listings of artwork, decor and other items.  Each artist on Handmade will have a personalized page for their wares, featuring a bio and any pictures they’d like to include (workshops, tools, etc.).

This is only the latest foray into a diversified area for the company who has recently launched Exclusives, Launchpad, and Home Services marketplaces that cater to specific sellers or demographics.  The question is whether this latest effort will take enough artisans away from Etsy to harm the burgeoning star company.  Etsy has struggled with claims that it has failed to control sales of counterfeit material on its site.  And for a company that outwardly praise handmade unique merchandise, that’s a red flag for buyers and most importantly, the artist-sellers who keep the marketplace running.

There is a big downside for using Handmade to hock goods. Amazon takes 15% of each sale from Artists while Etsy takes 3.5%.  But, Amazon’s active buyers clock in at 280 million, while Etsy’s tally 21 million.  As this CNET article notes, that means a much larger audience for vendors using Handmade.

Will Amazon’s new marketplace displace Etsy? Let me know your thoughts.