International Sculpture Center

   

June 2005 Vol.24 No.5
A publication of the International Sculpture Center

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Benefits and Risks of Selling Artwork On-line
by Daniel Grant

During the summer of 2003, “lightning struck” for Houston, Texas, artist Douglas Hamilton-not literally, but perhaps just as randomly. One of his paintings, Sydney II, was bought from the Internet site ArtQuest (www.ArtQuest.com), which features the work of 500-plus artists. It was Hamilton's first and only sale on ArtQuest.com, and the painting was purchased by husband-and-wife authors Kenneth and Julie Kendall who were looking for a new cover design for the sixth edition of their co-written book Systems Analysis and Design (Prentice-Hall). The cost of the painting and the limited reproduction rights came to $2,200.

This was good news for Hamilton to be sure and perhaps typical news for the still small but burgeoning on-line art market. The Kendalls are not art collectors, and the amount they spent for both the actual artwork and the reproduction rights was quite modest, but it was a sale nonetheless and probably would not have taken place without the intermediary services of an art Web site, on-line search engines, and the Internet in general.

ArtQuest is but one of numerous “mall” sites on the Web where potential buyers can peruse the work of a variety of artists. (ArtQuest is based in St. Louis, Missouri, a point of information that hardly seems relevant anymore, since Web sites exist more as code than as physical establishments, and conversations take place in the form of e-mail.) Other, similar art sites also report lower-end sales of emerging artists' work, or at least house a collection of artists who are excited about the prospect of buyers from anywhere in the world finding them and perhaps purchasing something.

Andrea Miller, an artist in St. Louis Park, Minnesota, “figured it would be worth a try” to put her paintings on the Web-she has a page on ArtCrawl (<www.artcrawl.com>)-and was “bowled over” when someone from Los Angeles contacted her about buying her work. He didn't ask much about her, and she didn't inquire about him, although Miller “got the impression that he was a novice collector. He didn't seem to know much about art and what you talk about with art.” Their initial conversation actually concerned whether or not Miller offered any discounts, and she agreed to take 10 percent off since the buyer was purchasing two paintings, $650 apiece less the 10 percent discount. Again, modest prices were paid by someone who does not appear to be a regular art collector, but actual sales took place through the medium of the Web.

With increased Internet commerce, increased fraud was sure to follow. Scams are now so common on the Web that Craigslist includes a "cashier check and wire transfer scams" section at the top of its for sale listings. Artists and other sellers have experienced a wave of recent Internet scams in which someone posing as an eager buyer e-mails the seller expressing great interest in making a purchase based on having looked through the seller's Web site. A check is sent to the seller, or a credit card number is provided, but for an amount far higher than the stated price; the sellers are then asked to refund the excess money by money order, their own checks, or credit card numbers. Invariably, the buyer's check bounces, or the credit card number is from a stolen card but, by the time sellers learn of this, their money is gone. Tracing the culprit is quite difficult, and a high percentage are overseas (Nigeria is often noted as a haven for Internet scams). Portland, Oregon, sculptor Julian Voss-Andreae came close to becoming an unfortunate victim of just such a trap, receiving an e-mail from someone who gave his name as Benjamin Mascellous with a yahoo.com return address (yahoo is a server of choice for many scammers who look to hide their identities), writing, “I saw your work via Google directory, i will like to purchase an indoor sculpture for my resident i will like to know the sculptures you have available and their prices" (sic). Prices and availability were provided by the artist, and Mascellous made a selection, promising to pay the $8,500 price. However, Mascellous sent a check with a Wisconsin address (“a company that issured the payment on my behalf and not my residence my resident is located in Finland,” Mascellous explained in an e-mail to an increasingly wary Voss-Andreae) for $12,579.80, asking for “excess funds” to be sent by Western Union to his “assistant” Joseph Benson in London, England, with instructions on shipping the artwork to come later. Eventually, Voss-Andreae came to the conclusion that Mascellous was attempting to perpetrate a fraud, refusing to wire any money to England or elsewhere and not even trying to cash the $12,579 check out of fear that whatever personal bank account information he would be obliged to provide could be used to steal from him in some other way. “Can you believe it?” Voss-Andreae said. “Of all the people to try to take money from, going after a poor artist.”

Getting Found on the Web

More and more artists have tried their luck on the Internet, reporting varying degrees of success. Daniel Clark, an information systems manager for the City of Los Angeles and off-duty painter, sold four works in 2003 for a total of $3,000 through AbsoluteArt.com, all to one person in the Midwest who “got turned on to me and kept buying and buying.” On the other hand, Ted Hess, a painter in Scottsdale, Arizona, and Saranac, Michigan, painter Karen Challender, both of whom have pages on the Web site Art from the Source (<www.artfromthesource.com>), report no sales. “I've talked with other artists who are experiencing the same thing,” Challender said. “It's hard to sell art over the Web. People need to see it in person.” Douglas Hamilton may have been one sale removed from saying the same thing, since only that one work sold through ArtQuest.com and his own stand-alone Web site (<www.dghgroup.com>) has not produced any sales.

Every method of on-line selling of artwork has its benefits and drawbacks. The mall sites charge fees for the creation of an artist's home page-ArtQuest charges $10 per image for a renewable period of six months or a sliding scale commission for artworks selling for more than $1,000 (between seven and 20 percent), while Art from the Source asks a monthly “hosting” fee of $19.95 per month; ArtCrawl requires a $250 annual fee, and a portrait painting Web site A Stroke of Genius (<www.prtrait.com>) charges an annual fee of $600-and the amounts may increase with the number of images on the site and the frequency with which they are changed. The owners of these mall sites do not handle the artwork listed for sale, nor do they act as dealers in making a pitch to would-be buyers. The artists' pages include information on how to contact them directly (by e-mail, telephone, or mail) to discuss prices, shipping, and availability.

These on-line malls, however, promote themselves to potential collectors through advertising, reciprocal links to other relevant Web sites and efforts to elevate their ranking among the major search engines, such as AltaVista, Google, Lycos, Vivisimo, and Yahoo. For any number of general searches made, there may be thousands of Web sites found, listed in order of greatest relevance on individual pages that contain no more than 20 sites. According to several studies of Web use, most people using search engines don't examine beyond the first 40 sites, which makes getting into that top tier a source of great competition and strategy for all companies and individuals hoping to be found by an on-line browser. If successful, these efforts result in a considerable amount of traffic through the entire site by users who have come to it by one means or another. Kathy Kahre-Samuels, owner of ArtQuest, noted that the Web site receives between 3,000 and 5,000 “unique visits per day”-a “unique visit” differs from a “hit” (which Kahre-Samuels doesn't count and calls “misleading”) in terms of quality time at the site-that lead to “hundreds of artworks sold every year,” at least in the $1,000 and up range. There may be hundreds or thousands or no works sold in the under-$1,000 range but, because these transactions take place solely between seller and buyer, Kahre-Samuels has no knowledge of them, except perhaps anecdotally. The same is true at all of the other mall sites, limiting the ability of anyone to gauge the true size and nature of the on-line art market. ArtQuest, like many other art mall sites, is not limited to artists-as-sellers but also allows collectors (including dealers) to sell artwork. Kahre-Samuels speculated that the majority of transactions in the $1,000 and up category belong to the resale market.

Art mall sites have their own mini-search engines, allowing browsers to select particular areas of interest, such as colors, subject matter, style, medium, size and price range. (ArtQuest has a color palette behind every image on its site so that potential buyers can match the shade of their walls at home and determine how a given artwork will look.) Besides the wide range of styles and media represented on almost any given mall site, there is also a great variety in the quality of art on display. “There are diverse buyers out there,” Jody Reeb-Myers, owner of ArtCrawl said, “and so we don't turn any artists away. Nobody is juried in or out.” The same sentiment was voiced by Art from the Source co-owner Bette Meritt (“Art is very subjective”) and all other mall site directors contacted, who only draw the line at artwork viewed as hardcore pornography, violent, or derogatory. The open-ended policy may prove beneficial to artists cut out of the traditional commercial gallery field and juried show system, but it can irritate other artists who believe that some works on the site bring down the quality level.

The obvious on-line solution to the problem of guilt by association is for artists to create their own stand-alone Web sites, and many have done just that. As with the mall sites, some artists report sales (usually at the lower end), while others can only describe inquiries or “hits” (if they purchased hitometer software to count them) or nothing at all. Unlike the mall sites, no one (other than the artist him- or herself) will take responsibility for promoting the artist's site or providing it with headings to attract search engines. A landscape painter whose keyword heading is “landscape painter” is apt to have a huge amount of competition and not likely to come up high in any Internet search. “You want to define with laser-like precision the subject of your art and then capture the feeling of that subject for the buyer,” said Chris Maher, a painter and Web designer for artists. “You don't want just 'landscape painter' or even 'Painter of the Maine Coastline' but name the very specific cove on the Maine coast that you paint. It has a chance of coming up, and a chance of selling, if it coincides with the experience of the person making the search and if that person comes to your Web site. Maybe, someone was married at that very cove, and he wants a painting of it to give to his wife.” Similarly, he noted that keywords such as “Arabian horses” would be preferable to “equine artist” for someone with a passion for Arabian chargers, and car buffs are more apt to be led to one's site if its heading is “Historic '57 Cherry Red Chevy” rather than “Paintings of Antique Cars.”

Such buyers are not likely to have art collections or even to know anything about contemporary art-and how much it may cost. “I get contacted a lot through my Web site,” said Karin Wells, a painter in Peterborough, New Hampshire. “People see something they like, and they call me.” However, a number of them “stop the conversation when they hear the prices.” The benefit of the Internet is that it allows people from all walks of life access to a range of goods and services that might have seemed out of reach before. Whereas traveling to an art gallery or museum might never occur to them, browsing an artist's Web site is easy and can be accomplished from home or office. Sales may take place, and a new collector is born (or not).

Who Are the Buyers?

Art galleries have been the greatest beneficiaries of the increased traffic and sales that the Internet promises and delivers, and a growing number of them have established Web sites. For potential buyers across the United States and around the world, the speed and ease of contacting gallery owners about certain sought-after artworks and receiving digital images of these pieces have meant increased sales even during a time of economic recession. “Our Web site produces sales on a weekly, if not a daily, basis for us,” said Scott Lawrimore, director of the Seattle, Washington-based Greg Kucera Gallery, noting that “25 percent of our sales come from people who initially found us through a Web search.” Many of these are first-time buyers of art. He added that, as a percentage of gallery income, the Web-originated sales produce closer to 10 percent, since most of the sales are in the lower price realm, between $500 and $5,000, “and the average sale is well below $5,000.”

Flanders Contemporary Art in Minneapolis, Minnesota, which carries a mix of emerging and established artists, also reported that a quarter of total sales now comes from people who contacted the gallery after first seeing its Web site. Gallery owner Doug Flanders said that many long-time art collectors have purchased works by Willem de Kooning, Hans Hoffman, and Pablo Picasso after making a Web search of available pieces to find just the right piece. “We sold a $250,000 Ross Bleckner to a doctor in Japan,” he said. “He had been searching for a Bleckner, and our name came up.”

For many artists, selling is not the principal purpose of an Internet presence; rather, a Web site offers an always available portfolio of their work to which they can direct people who have purchased their work in the past or have shown an interest in buying. The Web site of figurative painter William Whitaker, who lives in Provo, Utah, for instance, displays a variety of recent images but directs inquiries to his dealer, Nedra Matteucci, in Santa Fe, New Mexico. “I don't like to sell to the public,” Whitaker said. “Answering questions, sending out images, and talking about myself take time away from my painting. It's hard to get back to painting after getting into this other mode, and you still don't know what will come of it: maybe they'll buy something, maybe they won't.” He added that most inquiries are at the lower price end, under $1,000, and that these conversations are “more demanding, have more hassles, and are less gracious than the high end sales” handled by his gallery.

For Whitaker, his Web site (<www.williamwhitaker.com>) is a “reference point” for past, present, and future buyers, and the Nedra Matteucci Gallery reciprocally refers inquiries about the artist's work to his site, because of the quality of the reproduced images. The costs of maintaining a site may be considerably less than producing brochures and postcards for mailings. The old fashioned Rolodex itself is quickly becoming a list of e-mail addresses, through which artists may convey information about upcoming exhibitions, the availability of a new body of work, a studio sale or anything else.

One of the biggest boosters of artists selling their own work on-line, painter Mark Kostabi, who divides his time between New York City and Rome, Italy, noted that he earned approximately $350,000 over the span of several years selling (mostly) drawings and paintings on eBay, the on-line auction company. “You don't find a lot of the major trend-setting New York City art collectors on e-bay, but you do find people who are looking for a bargain,” Kostabi said. “Spending $100-200 on a work of art isn't taking a big chance for these people, and I was willing to sell my artwork for less.”

The Risks of Selling On-line

The benefits of presenting and selling one's art on-line are many-artists control the display of their work and what is written about it, prices need not be inflated to allow for a dealer's commission, and the artwork is accessible night and day to anyone around the planet who can find his or her way to the Web site-but there are also some risks at the point of sale. A worldwide industry of Internet frauds and scams has developed to pick the pockets of buyers and sellers, making both groups quite wary of each other. Art, more than most purchases, relies on a high degree of trust between artist (or dealer) and collector (Does the artist have real talent and artistic vision? Is the artist a serious person? How likely is it that the work will retain its value or even increase?), which becomes far more difficult to build when the primary medium of communication is a picture on a computer screen. Worries about rip-offs only make the process of building a relationship more difficult.

For example, the credit card a buyer uses to pay for the art could have been stolen, a cashier's check might be counterfeit, and the artwork sent to some far-off land may be gone for good, with little recourse available to the artist whose only fault was thinking benevolently of a collector. Buyers, on the other hand, would be loath to send a personal check or money order to someone they don't know. The same types of worries that buyers may bring to the purchase of art they do not see in person, displayed in sites that do not have brick-and-mortar faÁades, artists might have about credit cards that aren't physically handed to them to be swiped by someone who isn't present to physically sign the receipt. There is less protection for buyers and sellers when business is conducted through computers. However, a growing segment of the economy, currently estimated at 2.2 percent, or almost $70 billion in 2004, is transacted on-line, so the increased risk is borne by merchants who see an opportunity for a far larger market.

A variety of ways exist to receive payment for merchandise, some of them more secure than others. (A “secure” Web site, by the way, does not mean that all transactions are legitimate, rather that any information transmitted to it is encrypted and cannot be read by anyone with access to the site.)

Credit cards are relatively safe when the items purchased are to be shipped to the billing address; a red flag is raised when objects are to be sent to a different location. Another warning sign is a buyer seeking to spread payment over more than one credit card; above a certain dollar amount, credit card companies often become suspicious and look to verify the purchase with the cardholder. Sellers should also ask for the three-digit verification code on the back of the credit card where cardholders sign their name. That “V” code is an extra layer of protection from criminals who may have a cardholder's account number but not the card itself; that code may be verified at the same time as the account number when someone is making a purchase.

Obtaining authority to accept credit cards as payment can be a difficult process since the banks that issue MasterCard and Visa cards are wary of extending this authorization to individual entrepreneurs, citing a recurring problem of mismanagement and fraud on the part of these entrepreneurs (refusing to resolve complaints from customers, going in and out of business, running into debt and declaring bankruptcy, relocating elsewhere without revealing their new addresses). American Express and Discover offer their cards and permission to accept payment by these cards directly without the intercession of a bank. There are also a number of bank brokerage firms to which sellers of all kinds, including those who work out of their homes, may apply for permission to accept credit card payment.

A number of Web sites use a third-party on-line payment system-PayPal is the largest of them-that verifies buyers' and sellers' financial information, providing a means by which a purchaser may pay with a credit card or transfer money through a checking account with a measure of confidence. PayPal, through which most sales on eBay take place, requires that both merchants and customers have registered with the system in advance, and it charges sellers a fee of between one and two percent of the cost of items purchased. Additionally, PayPal will indemnify a merchant who has been defrauded, although the process of notifying the service of a criminal act and proving the case is long and multi-stepped. For artists, qualifying to participate as a merchant in PayPal is less complex and more accommodating than applying to a bank to accept credit card payments.

There are other ways in which money can be transferred that provide security to both buyer and seller. These include having money wired from the buyer's bank to the seller's; bank charges for this service range from $20 to $40, regardless of the amount of money being wired. Western Union, which also allows customers to wire money (from one Western Union office to another), guarantees same-day service, which banks do not, although its fees are higher, from a minimum of $15 for a transfer of up to $100 to $220 for a transfer of $5,000, for example. Money orders, which may be purchased for a fee at Travelers Express, post offices, check cashiers, supermarkets, convenience stores, and other retailers, offer less security to buyers; however, since they are quite difficult to counterfeit, money orders may prove attractive to sellers.


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