ArtSharks: A Feasibility Study
Online shopping has provided internet users with convenience, affordability and unimaginable access to various choices of products. As long as a buyer has a credit card, buying over the internet is just a matter of clicks. Due to the popularity of online shopping, a lot of brick and mortar based businesses have started to recognize the importance of virtual presence. Online presence is also an advantage for a lot of businesses. Not only is it cheaper than having a brick and mortar shop, it can also be a venue to advertise and promote your business without having to go through a lot of effort and money.
Due to the presence of many online auction and buy and sell websites, even teenagers are able to earn money online. However, selling artworks over the internet is another story. According to an online article, “Selling artworks on the internet is an art form in itself. Even with the rising popularity of online shopping, virtual art vendors have to get creative to gain the trust of the customers” (Bair 2007). The market can also be considered a niche which makes it more challenging for online galleries to be able to attract customers and sellers alike.
This dissertation will attempt to determine the feasibility of an online art community website where people can join forums, do social networking, buy and sell artworks over the internet. A review of literature was done in order to get an idea of this market and to come up with the best models in accessing the feasibility of the business. Results of the analysis will be discussed to clarify concerns and questions posed by this business idea. Objectives With all business ideas, a number of uncertainties always arise and these questions need to be clarified.
This dissertation attempts to clear out the following uncertainties: What is the market demand for social networking sites? What is the market size and market profile of people who use such social networking sites? How popular is selling and buying in the internet? How can these be leveraged by the website ArtSharks? What are the needs of the current customers in this industry? How can these be leveraged by ArtSharks? How can the competitive landscape of the ArtSharks website be described? What are the strengths, weaknesses, opportunities and threats of the business?
How financially viable is the business? Methodology This study analyzes the feasibility of ArtSharks by looking at the market demand for this type of websites and its financial viability. Market demand is determined through Michael Porter’s Five Forces and through SWOT Analysis. This will help the business in understanding the industry that it will be entering and at the same time, leveraging on its strengths and available opportunities while turning its weaknesses and threats into opportunities for improvement.
Financial viability will be measured through different financial models including Revenue Model, Gross Margin Model, Working Capital Model and Investment Model. All these models will determine the financial standing of the company from input to output. Review of Related Literature Promoting and Selling Artworks There are a number of ways for buyers to acquire artworks – thru the internet and thru stores or galleries. Artists may opt to start from a local art store and offer a profit deal with the owner. They may also approach artwork dealers and galleries who are able to promote an artwork.
Another option is uploading your artworks online and advertising in online art galleries. There’s also the flea market, community churches and schools which hold art fairs every year (wikiHow 2009). When selling artworks over the internet, Popkin (2008) believes that eBay is still the best place to sell them. The reason for this is that there are nearly 95 million users in eBay spending a total of approximately US$894 per second. Each day, eBay gets more than 10 million bids and more than 100,000 new people register.
About 2 million new items are posted everyday, as well. Popkin (2008) believes that art buyers can choose to go to online art galleries specializing in the selling of artworks but eBay offers a large number of online buyers who do not aspire artworks but may become persuaded to buy. However, there are also several online art community websites available in the internet to serve this niche market. These websites are being used by different artists to showcase their paintings, photographs, sculptures and installation arts.
One such website is Artspan Contemporary Art. The website boasts of its 2,900 artists, artisans, art photographers and other art sites which other people may browse to see their works. The gallery houses paintings, portraitures, ceramics, sculptures, glass arts, among others, which are done by various artists. Artspan began in 1999 with a mission to “serve the visual arts community: both contemporary artists to create and consumers looking to purchase original contemporary art, contemporary art prints, art photography, and more” (Artspan Contemporary Art 2009).
It currently offers artists with low-cost, easy-to-update, elegant and fully customizable art website templates. The full feature website package ranges from US$13. 95 to US$19. 95 per month which includes hosting. It promises high volume traffic since it has been included in top search engine rankings. It is being ranked first whenever “contemporary art” is typed in Yahoo and Google. Currently, it experiences 171,000 visitors per month and over 6 million hits. On the other end, the customers are being provided with a searchable database where they can input the keywords of the item that they are looking for.
They can browse by artists, category/genre or by region. Everyone, artists or consumers alike, may also join in the discussions in the forum and click on links that will lead to other related websites. Innovation of the website is done by getting new art categories or genres to boost the interest of the members and visitors. In 2008, their collection included Printmaking, Metal Arts, Wood Arts, Art in New York, Black and White Photography, Mosaics, among others. Another such website is Art Gallery Worldwide. This website showcases various artworks categorized by style, media and themes.
For the ease of navigation of visitors, the homepage already shows the most visited gallery portals: original art, abstract art, landscape art, fantasy art and oil painting, as well as the price ranges of the artworks. In each gallery portal, a featured artwork and a featured artist is also shown. Art Gallery Worldwide began in 2003 in Delaware, United States and operated by teams based in the US and Europe. The website accepts membership both from individual artists and galleries with several artists. An individual artist pays at least US$24 to be able to upload 50 artworks within 6 months.
There is also a 14-day free trial for those who would like to try out the system first. Each artists’ website contains a profile of the artists and a preview of the album of artworks. For a gallery to be able to upload its artists’ work on the website, a set-up fee of US$300 and a monthly fee of US$69 for 300 artworks are required. The artists and galleries will be able to monitor traffic and get visitor statistics on their websites. An art forum and support forum are also available. Similar with Arspan, it promises individual artists and art galleries highest internet traffic.
Its unique features are the copyright protection service and fraud protection-scam patrol. Fraud protection-scam patrol helps the artists or the galleries in spotting a suspiscious buyer. It is able to “find a real location, recognizes hiding techniques, checks blacklists and scrutinizes a behavior of the buyer” (Art Gallery – Worldwide 2009). However, there are also some concerns both on the part of the buyer and the seller. One concern of sellers is that artworks become easy to copy when they are posted in the internet.
Concerns of the buyers, on the other hand, are hinged on credit card or other payment securities. Jonas Hair, a web-based art gallery owner, also said that “most people, in my research, that buy art like to see it, feel it, touch it and experience it before they put it” (Bair 2007). He also further cited when selling artworks personally, the manner of marketing and promoting an artist’s self is most important than how great the artwork is. However, when it comes to selling an artwork over the internet, the former because more important than the latter.