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Etsy Will Test Same-Day Delivery Option in New York City

An employee walks past a quilt displaying Etsy signage at the company's headquarters in Brooklyn, New York.
Victor J. Blue | Bloomberg | Getty Images
An employee walks past a quilt displaying Etsy signage at the company's headquarters in Brooklyn, New York.

As Amazon preps a handmade goods marketplace that will pit it against Etsy, Etsy is trying out one of Amazon's specialties: Express delivery.

Etsy has partnered with delivery startup Postmates to begin testing same-day and next-day delivery in parts of New York City, the company told Re/code, as it looks to solve one of the biggest complaints from buyers and sellers who transact on its marketplace.

The service, dubbed Etsy ASAP, will launch sometime in the fall and be available to Etsy sellers based in any part of Manhattan and in parts of Brooklyn and Queens where Postmates couriers are stationed. Shoppers based in these areas will see the express delivery option on Etsy product search pages and checkout pages where sellers have enabled the service.

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"We hear from sellers that they get constant requests from buyers for getting stuff really fast," Calia Talmor, Etsy's senior product manager for shipping and order management, said in an interview. "They feel they are in a bind and actually it's technologically almost impossible" for them to get something to buyers the day or day after it's ordered.

"This gives them a way to do it really easily on Etsy," she added.

Etsy sellers who want to offer the delivery option can enable it for some or all of their product catalogue and can choose which time windows they are available to hand off goods to a Postmates courier. Buyers who choose the delivery option will be able to choose a delivery window for the day they place the order, or the next day. They'll also be able to track the delivery while it's in progress. The express delivery method will cost shoppers $20.

News of the delivery pilot comes a few weeks after Etsy unveiled another product aimed at getting stuff from Etsy sellers into a shopper's hand quicker. The company announced last month a feature on its app that shows people which Etsy sellers are hawking their wares nearby at pop-up shops, fairs and boutiques. Since Etsy doesn't hold any of the inventory its sellers offer on its marketplace, it has little control over delivery times, which can be a problem at a time when Amazon has single-handedly made two-day delivery feel like table stakes to compete in online commerce.

Etsy will also soon face direct competition from Amazon as it recruits artisans for a yet-to-launch Etsy-like marketplace it's calling Handmade at Amazon. Handmade sellers who store inventory with Amazon will qualify for Prime shipping, which gets goods into the hands of Amazon buyers within two days. It's not clear if it will be possible for some of these goods to make their way into the selection of Prime Now, Amazon's super-fast delivery option in select cities that takes two hours or less.

Etsy recognizes that the express delivery feature won't be an option that every seller can offer. After all, Etsy was built on the idea of handmade work, which is often equated with long lead times. That means plenty of Etsy artisans won't be able to turn goods around that quickly. But the company knows there's a substantial subset of sellers who offer ready-made items such as vintage clothes and jewelry or arts supplies that they have on hand and can send out on the same day.

For Postmates, Etsy is just the latest in a string of big-name partners it has announced this year. Others include Apple, Starbucks and Chipotle, which have formalized agreements to let Postmates couriers ferry goods and food from their stores to customer doors. Postmates also works with several e-commerce brands, such as Everlane, to give shoppers in some cities a same-day delivery option, while simultaneously providing work for Postmates couriers during times of day when food delivery is less common. Uber plans to announce its own delivery partnerships with brick-and-mortar retailers soon, while the startup Deliv continues to expand its service with chains such as Macy's and Foot Locker.

Etsy went public in April in a highly anticipated IPO that saw the company's stock close at $30 a share after its first day of trading. But it's been a rough road since then. The company recorded a greater loss than analysts expected in its first earnings report as a public company and a weak forecast in its last report scared off more investors. The company is also battling accusations from some investors that its marketplace knowingly sells trademark-infringing goods, while news of Amazon's competitive site hasn't helped. These events combined have hammered Etsy's stock down to around $14 as of Friday morning.

By Jason Del Rey, Re/code.net.

CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.