Etsy Teams Up With Postmates in NYC to Compete With Amazon

December 21, 2015 Updated: December 23, 2015

Handmade Christmas gifts anyone? It’s not too late.

Brooklyn-based Etsy offers New Yorker’s same-day service and hopes that with just a few days left before the big gift exchange people care enough to buy local.

Go on Etsy today and you will find over 100 vendors who offer products with the Etsy ASAP option. The service, launched October 26, is the first time Etsy has tried same-day delivery, according to an Etsy spokesperson. Delivery is available at a cost of $15 from sellers who opted in to the pilot based on their ability to fulfill orders. Delivery, available to buyers in Manhattan and parts of Queens and Brooklyn, is fulfilled by Postmates, the scrappy courier platform from San Francisco.

Postmates has been in New York since 2013, when it first launched in the Flatiron neighborhood, best- known for its concentration of like-minded tech startups. Trendy local favorites such as Shake Shack, Blue Bottle, Momofuku Milk Bar, and The Meatball Shop are among some of the other vendors working with the platform in New York today.

Postmates is in direct competition with Amazon and a natural partner for Etsy. Its CEO Bastian Lehmann told Forbes in early November “We’re building the anti-Amazon.” Lehmann suggested small businesses may prefer Postmates’s delivery service over Amazon, since Amazon sells competing products (including prepared food) that risks putting small businesses like restaurants out of business.

Postmates is a delivery service powered by a mobile app that makes it super easy for couriers (often young men on bicycles) to see relevant customer requests based on their location. The couriers then grab the orders and deliver them, within hours or minutes.

The company expanded from 30 to 40 cities three months ago. At the same time it completed 4 million deliveries from 65,000 merchants nationwide, according to VentureBeat. 

For Etsy, Postmates offers its customers a way to get gifts fast and it addresses a major weakness in its business model, particularly vis-a-vis Amazon’s Prime service, which delivers in 2 days or less.

Since Etsy doesn’t warehouse goods the way Amazon does, it cannot control its delivery times. Also because Etsy’s vendors used to only be crafters, many of whom made products to order. Today, manufactured goods are also on offer. 

Handmade at Amazon

Etsy has struggled this year, after a its successful April IPO where shares closed at $30 on the first day of trading. However, lower than expected earnings and weak sales forecasts soon made its shares plummet to $8.71 as of December 21.

The Etsy marketplace is facing stiff competition from Handmade at Amazon, a new platform that makes it easy for artisans to join the efficient retailer. As of today, Handmade lists 250,000 items for sale.

Recognizing that Handmade works differently from mass production, Amazon allows vendors to strech the delivery time up to 30 days, but crafters with enough stock made ahead of time can choose to use Amazon’s fulfillment service, which qualifies for Amazon Prime’s 2-day delivery window.

The world is changing at a dizzying pace, and Postmates is just one of many logistics services out there with the aim of disrupting our wait. SpoonRocket, Sprig, and Uber are all in that space, and venture capital funding can’t seem to get enough of instant delivery.

An Etsy spokesperson said it would evaluate the Postmates pilot “after the holiday season and decide on future plans at that time.”

In the meantime, “We are excited about the response, especially as we lead into the last minute window of the holiday shopping season, with many buyers labeling their purchases as gifts at checkout,” the spokesperson said. 

CORRECTION: A previous version of this article gave the wrong number of vendors who currently offer products via the Etsy ASAP option. The correct number of vendors is over 100. Epoch Times regrets the error.