Ironic Internet Impact on Art

[tedh]

I've watched as art.com and the others, and art from China and the big boxes, have all killed the retail sale of prints and posters, and decimated art publishers.

Today is a turning point for me: I have a customer wanting an Aaron Ashley print. It is long out of stock, but available only on amazon.com for over $300 framed.

He selected two other possibles, both around $100 at art.com unframed.

Back in the good old days, these would have been available as four-color offsets at prices around $40.

The art-buying public should be prepared to get royally screwed in the future, because art.com has finally reached maturity: they've killed off traditional sources, and now they can set the prices. I actually told my customer that the public is getting what it richly deserves for deserting the old retail model in favour of "lower" prices on the internet.

In a way, this mirrors what's happening in North America as economies move from manufacturing to service. Around here, our economy is welfare-based, with the loss of thousands of middle-income jobs to Mexico and China. I had a browser tell me about starting a new Internet-based giclee printing service, and his canvas and stretcher bars are all coming from China.

We're all selling agents for offshore manufacturers.

 

[GUMBY GCF]

The art-buying public should be prepared to get royally screwed in the future, because art.com has finally reached maturity: they've killed off traditional sources, and now they can set the prices. I actually told my customer that the public is getting what it richly deserves for deserting the old retail model in favour of "lower" prices on the internet.

yep

 

[GUMBY GCF]

The art-buying public should be prepared to get royally screwed in the future, because art.com has finally reached maturity: they've killed off traditional sources, and now they can set the prices. I actually told my customer that the public is getting what it richly deserves for deserting the old retail model in favour of "lower" prices on the internet.

yep

 

[Puppyraiser]

Ditto books, ditto any other commodity. Big Boxes will set the prices, and everyone will pay whatever they say, because choice will have been driven out of business. Shame on all of us who buy from the bloodsuckers. Myself included, sad to say...

 

[tedh]

You're bang-on, Ellen. Couple of comments:

- our town is a good tourist town, with good restaurants, stores and things to do. But every store except two or three is an outlet for Chinese junk. The gift shops, country stores, clothing stores, and garden store would all qualify as Chinese factory outlets.

- I found a source for all kinds of cheap Chinese junk: aliexpress.com. There's a guy in Ottawa who's selling lots of stuff from this site. The most important thing about it is that the vendors are knocking down walls by offering free shipping along with low prices. By doing this, they're targeting the future of big boxes: why shop at Walmart when you can buy a tablet for $150 offshore? Take a look at the selection - this could be the future.

 

[Puppyraiser]

I remember when the Walmart opened their superstore grocery outlet in our town. How the food store chains squawked! Plainly they had forgotten that they had done the same thing to the small corner grocery store in their turn.

 

[Rob Markoff]

Back in the good old days, these would have been available as four-color offsets at prices around $40.

Well, the "good old days" are long past. The days of printing and sitting on 4-color offsets is no longer a sustainable business model - and I don't think we can blame art.com entirely. Take a look at all of the "major" art publishers and I think you will see that most of them have migrated to a POD model. POD also allows for the availability of THOUSANDS of images that would otherwise not have been published (and for some of them, rightfully so )

Interestingly, we did volume framing for years using a Potdevin machine to mount our "posters" - and have a significant investment in that technology. Now, even the low end hospitality imagery is POD and cannot be effectively "wet" mounted, so our machine is basically a dinosaur.

On the positive side, while the "unit" cost of imagery had increased, so has the ability to have the same image in multiple (scalable) sizes and printed on a variety of substrates (paper- and many types, metal, bamboo, acrylic, etc.). Those who cling onto the past ways of doing things are self-limiting themselves out of a whole new arena of sales opportunities.

We have had record years these past two years and this year looks good too. Part of our success was to acknowledge the changing world and change our business model to provide product that isn't the same as what "everyone else" is selling.

I was just talking with a domestic moulding manufacturer yesterday who agrees with me that within the "volume" sector (think large scale hospitality projects) there is a move away from the Chinese market as too many large projects have been "burned" by carp and there is a strong effort to refocus to buying from domestic sources.

Nonetheless - from my Facebook posting today: http://news.yahoo.com/photos/oil-painting-production-in-china-slideshow/

 

[Jos]

Love that link Rob!

 

[Kwik Picture Framing]

It's a shame that things are this way, but I think everyone kind of assumes that Amazon and similar websites will always have the best price.. this isn't the case when it comes to art, though.

 

[RoboFramer]

Nothing to add, just want Kwik off the top.

 

[Jeff Rodier]

It has been a great revival for artists though. Individuals and businesses have been redirected to local artist's artwork since it can be digitally reproduced. The majority of framing I do is artwork created by local artists. While none of them are getting wealthy supplying the artwork it has brought the sales and production directly to this community. Almost all of the work is produced by privately owned businesses with the exception of some online photo products.

 

[tedh]

I'm surprised by the large number of amateur photographers bringing in giclees of their work for framing. I have a special mount and laminate a 16x20 with a Canadian-made plastic frame for just under a C-note. Word got out on Facebook about it, and it has resulted in a lot of takers.

Then there's the Spitfires: I've just about sold out my stock of WW II aircraft prints, and the publisher has gone under. Grrrrrrrrrrr.

 

[Kwik Picture Framing]

It has been a great revival for artists though. Individuals and businesses have been redirected to local artist's artwork since it can be digitally reproduced. The majority of framing I do is artwork created by local artists. While none of them are getting wealthy supplying the artwork it has brought the sales and production directly to this community. Almost all of the work is produced by privately owned businesses with the exception of some online photo products.

I think this is great, but the thing that I like the most is the fact that actually, we never know who is going to be the next "big thing". In years to come, you might be able to think "oh, I framed their early work!"

 

[Alan Yaffe]

"Ditto books, ditto any other commodity. Big Boxes will set the prices, and everyone will pay whatever they say, because choice will have been driven out of business. Shame on all of us who buy from the bloodsuckers. Myself included, sad to say..."

Last Saturday I went to a party and ended up talking with a guy who has been a buyer for Walmart for the past 15 years and spends great amounts of time in China. I told him from what I have seen and been offered out of China, retailers in North America have been marking up the Chinese products 7 to 10 times. That means if my wife spends 100.00 on a blouse that the store probably landed it for around and 10.00. He said if they bought enough it would be even less than 10.00 and he said if the public knew the markup on goods from China they would be livid. He also said a store can put stuff on sale for half price and still make more money than they did when the same goods were being made at home. I think we are in trouble and job loss will not end anytime soon. I just wonder how cheaply the big box guys will sell their Chinese products when most of the people they sell to don't have jobs?

 

[Luddite]

That 7-10 times mark up also covers the shipping,crating,tarrifs( some products are taxed very heavily for various reasons),insurance,and inspections required to get the items here.I kind of recall posts proudly a 600% markup for framing.Not knocking it.......Profit is profit. L

 

[Bob Carter]

I used to do Consulting work for several Art Publishers; one still publishing but under a framework I do not recognize, three either sold or were consumed by a much larger internet driven concerns

I'll share what I thought was the best example

Large BB retailer hired me to examine the 'shelf life' of preframed art. The exercise was to create a time line comparing if it made sense to take the time to have product produced in China acknowledging the additional time of production, transit and distribution vs utilizing several regional 'contract' framers at a higher cost but quicker to 'shelf' time

The amazing Strategic Implication was at the retail poster level (my personal agenda) was when ABC publisher released a new image the traditional outlets enjoyed about a 60 day advantage. The publisher enjoyed his highest margins selling to those 'traditional' retailers and sales had two s p i kes. The following ### are the same word with spaces?? The initial ####e in sales to the retail trade then a second, but, much larger ####e when the 'mass sellers' realized the image was going to be a winner

The next big Implication was the day those framed images found their way into Targets, etc.

The retail trade (you and I) virtually evaporated and the overwhelming numbers of retailer accts dwindled along with the margins.
That point we certified as the Faustian Supremacy LOL.

The framework for publishers became the initial ####e paid for publishing; the internet sales paid for re-printing

the overwhelming conclusion was price was motivating decision in consumer choice killing an entire category of traditional retailing. Consumers were then being 'conditioned' to make internet a 'first look' option

my advice was for these publishers to create 'covert' internet portals where the margins were astronomical. Everyone declined on 'ethical' reasons of not competing with clients and not being victim of 'chicken little' LOL. I suggested that market had shifted and they were simply abdicating that section to other portals.

Not trying to seem 'too smart' but that scenario has replayed itself a ton

and, there you have a slight peek behind the curtain

 

[Cornered One]

That 7-10 times mark up also covers the shipping,crating,tarrifs( some products are taxed very heavily for various reasons),insurance,and inspections required to get the items here.I kind of recall posts proudly a 600% markup for framing.Not knocking it.......Profit is profit. L

I don't think these charges are as high as you think. The shipping of an entire 40 foot container from China is specially priced to Walmart due to volume. I asked my contact and he said normal charge is about 5000.00 (Wally pays a lot less)for a container and duty on clothes is 7% of production cost. I think this might add a dollar or 2? I am no expert just telling you what I was told.

 

[tedh]

Interesting description, Bob. Here are my comments:

- some customers still want to walk in and look at $350 giclees from a still-alive publisher. Not many, but some.

- there's big interest in large bright cheap canvases. I was told yesterday that Canadian factories design and paint an image to reflect a current trend, then scan it and reprint it on canvas with shades of grey. This is the base for a hack minimum-wage painter to reproduce it in full color. It will subsequently wholesale for $70. Today's trend, btw, is birches and aspens.

- my approach it to find a hot seller, buy a print, then mount and laminate it on HDF, frame it in plastic and sell it for as close to $100 as I can get it. If it sells fast, I jack the price on the next one.

- we can still survive in this market by stretching and framing Chinese junk. I'm considering buying good-looking Chinese oils for under $50, giving them the full treatment, and selling them for around $200.

- my daughter is buying iphone cases for $7 from Amazon. This includes shipping from China. How the h*** can China build and ship for $7?

 

[Cornered One]

Interesting description, Bob. Here are my comments:
- my daughter is buying iphone cases for $7 from Amazon. This includes shipping from China. How the h*** can China build and ship for $7?

They get substantial rebates on exports. They can sell at cost and the government kicks them back at the end of the year. They were getting 15% back on glass shipped to the US a few years ago and it almost put a number of people out of business. Then I was told they needed more glass at home because of all the building so the rebate was cut back to 7.5% helping North American producers. If you remember the glass in the new World Trade Center came from China. I was told the same rebate story by an aluminum extruder in Europe who just about went out of business until the EU imposed duties on aluminum out of China.

 

[Randyman]

I began self-publishing my own work in 1980 in either limited -or- open edition offset lithographs. We were about 50% retail and 50% wholesale with a couple hundred mom-and-pop frame shops selling. We exhibited at many of DECOR Magazine's Art Buyers Caravan trade shows and advertized to the trade. There were Chinese "hand painted canvasses" back then as well but our business was good and grew right through the late 1990's (I even appeared on Home Shopping Network a few times).

But something changed about that time which affected not only the art & gallery industry but all manner of collectible companies. That something is called "eBay"

Looking back I can see an inverse decline in all those businesses (including many closures and bankruptcies of galleries, publishers and major collectibles companies) that corresponds directly to the rise of eBay (which began primarily as a collectibles marketplace). Why such a major disruption of the status quo?

Imo, for the first time ever, collectors of limited edition art and collectibles had the ability --because of eBay-- to see actual secondary market values from a truly independent marketplace. Prior to that, the companies themselves (or publications that printed what they were paid to say) published their own lists of what their things originally sold for and what they were supposedly "worth now."

A prime example being Ty Warner's "Beanie Babies" which accounted for a massive amount of eBay's activity in early days. The first nine BB's were produced in 1993 and took off like a rocket. Two years later, eBay was founded but really didn't get rolling big time until it went public in September 1998. In 1999 Ty Warner ceased production of BB's. Why?

Because collectors (i.e. "investors") quickly discovered the things were virtually worthless because of eBay. Warner had lost the ability to strictly control the allocation of product (thousands of shops were typically allowed only 36 units of each bear created which sparked a frenzy.. but they were shipping 15,000 orders per day to retailers at their height). But MOST IMPORTANTLY Imo he lost the ability to dictate what the market value of each was. eBay got in... Warner essentially got out. In 1999 FORBES pegged his wealth at $4 billion...eventually rising to $6B before falling as the BB craze imploded. He's currently personally worth over $2 billion and owns the Four Season's Hotel in NYC. http://www.chicagomag.com/Chicago-Magazine/May-2014/Ty-Warner/

Imo, most collectors of prints.. limited or not.. expensive or not.. used to feel they were able to both indulge their hobby while simultaneously enjoying an investment play. eBay quickly showed them that a few prints appreciated but that most did not. And without this "investment illusion" most could no longer justify spending the amount of money on a framed limited edition print as it now costs to buy a 60" HD flat screen TV.

Ty Warner supplied the demand for BB's. However, the demand only existed to the extreme extent it did because buyers were convinced they were making money.

Imo, only when one has a highly desirable product (subject, media) and enjoys a monopoly on (a) production (b) marketing & distribution (c) pricing and (d) an active secondary market whose values that are proven appreciate --only then will there be a chance of the a return of the enthusiastic collectors of days gone by. Imo it's also important to build a fan base who are given the ability to know and