Deal Radar 2010: FineArtAmerica.com

FineArtAmerica.com is an online marketplace and social networking site for painters, photographers, and other visual artists. Artists can use to the site to connect with collectors and other buyers and, says founder Sean Broihier, put the business side of their career on “autopilot,” leaving them more time to create art.

FineArtAmerica.com (FAA) has more than 28,000 living artists who upload new images to the site each day, and 6,000 of these artists offer prints for sale. When an artist uploads an image, he or she can offer prints ranging in size from 8″ x 8″ up to 60″ x 108″. Artists specify which sizes they want to offer and exactly how much they want to charge for each size. Works of art range from greeting cards (starting at $1.50) to framed prints (from $25) to stretched canvas prints (from $30). The prints can be of art that was created in any medium: drawings, digital art, paintings, pastels, glass, mixed media, photographs, and so forth.

When a buyer purchases a print, FAA takes care of all aspects of the sale: printing, framing, matting, stretching, packaging, insuring, and shipping the image, as well as processing the buyer’s credit card and sending artists their profits each month. FAA does not take any commission. If artists use the company’s print-on-demand program, a $5 to $10 markup is added to the selling price of their work, but this is paid by the customer.

The company was founded in late 2007 by Broihier, who after college arrived in New York City with a few hundred dollars. He took a job as an engineer and taught himself how to program Web sites at night and on weekends. In 2005, he built a platform that allowed people to upload text and images to the Web. He used that platform to launch several businesses, including FineArtAmerica. Broihier got the idea for FAA after he built a Web site for his brother, who worked at an art gallery in Chicago.

Art dealers and galleries in the United States alone generate approximately $8 billion in revenue each year. FineArtAmerica is going after the art buyers who made those $8 billion in purchases and after artists and galleries to convince them to use FineArtAmerica.com as their “order fulfillment service.” Other target segments the company is pursuing in 2010 are casual home shoppers and interior design firms.

FAA penetrated the market by providing artists with an array of online tools at an attractive price (free to join; $30 a year to use the print-on-demand feature). The social aspect of the site caused it to grow quickly by word of mouth. As artists started to sell, they referred their friends to join, and so on.

Broihier was convinced that he had a unique idea when he launched FAA, but he quickly discovered that wasn’t so when two large competitors launched within a week of him: Imagekind.com and RedBubble.com. Imagekind had $2.6 million in venture backing, RedBubble had several million dollars, and both had reputable management teams. Broihier “was a one-man operation with absolutely no money, no connections in the art world, and no connections in the Internet world, whatsoever.”

FAA was entirely bootstrapped and Broihier remains its sole employee. He built the business through aggressive marketing and developing new features to help artists sell their work, for example, an e-mail campaign feature that allowed members to quickly create graphical, HTML e-mails. Another development was an IP-location algorithm that allowed FineArtAmerica.com to automatically detect the location of its visitors and then display upcoming art events and feature artists in that area on the welcome page. Broihier released two to three features a month for the first year in order to constantly attract new artists. These features include a shopping cart that can be embedded into the artist’s own Web site, previews at full resolution, watermarks to protect low-resolution images, and a Facebook application.

The range of marketing tools and features and FAA’s dynamic and social nature are what Broihier believes separates his site from others. He does not want a site where artists upload their images and then simply hope that someone finds their work and buys it. Rather, he wants to help artists become efficient businessmen and businesswomen through an “upload and promote” approach.

This community of artists interacting with buyers and each other is part of what Broihier believes will help him to build a site that commands brand awareness and loyalty. “When you think of buying books online, you think of Amazon.com. When you think of buying shoes, you think of Zappos. When you think of buying art online, who do you think of? No one. There is enormous potential to become the online destination for art,” he says. He points out that such brand awareness is often missing even from print-and-frame sites that make millions of dollars in annual sales, such as Art.com, which does offer work by emerging artists but mostly sells prints of works by masters who are dead, such as van Gogh, Picasso, and Monet.

FAA has been profitable since launch, thanks in part to its low overhead. Revenues were $175,000 in 2008 and $1 million in 2009, and the company projects revenues of $2.5 million for 2010.

Broihier says that FineArtAmerica.com currently attracts 175,000 unique visitors a day, and traffic is growing by 10%-15% a month. compete.com put unique monthly visitors in December 2009 at  just over 385,700 and visits at just over 600,700. The site had 1,000 member artists at the end of 2008 and now has 28,000 artists who upload an average of 2,000 new images a day.

Broihier would consider working with an investor who is well-connected in the art and consumer-buying worlds with a proven ability to develop a national brand to help him continue to scale the business. He knows that eventually, he will have to sell one of his businesses but would find it difficult to part with FAA entirely. “A big payout would give me the same freedom [I have now] but without a purpose to each day and something to labor over. FAA is my life’s work,” he says.

I am impressed by the wisdom of his words. I have come to same conclusion myself, that once you have found something that gives meaning and passion to your daily life, that then becomes the platform for your life’s work. It is not a good idea to “sell out,” however much money is offered, because recreating such a platform from which to continue working is excruciatingly difficult.

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This segment is a part in the series : Deal Radar 2010