You could argue that a center of the online retail art world is in Kansas. That’s where OverstockArt.com is located, and in nine years it has grown to be a leading online retailer of original art reproductions. Its founder and CEO, David Sasson, has guided the business from its inception to where it is today, and he joined us to discuss it all.
Practical eCommerce: Tell us a little about OverstockArt.com.
David Sasson: “OverstockArt.com was founded in 2002 by myself and my partner, Amit Yaari. We deal in handmade oil paintings, mostly reproductions of paintings by artists such as Van Gogh, Monet, Picasso, Klimt, and many others–mostly great masters. We offer handmade reproductions where most of what you’d find in galleries and such are prints. This is an actual, true, handmade oil painting, starting from a blank canvas and finished with a full work of art. We also frame the product in our facility here in Wichita, Kansas.
“We have approximately 1,500 SKUs on our website running at any given time. We try to expand the variety every month by about 30 to 40 additional SKUs or so because we believe that variety helps our customers choose the art they love. We ship between 50 to 60 orders a day.”
PEC: Tell us a little bit about yourself, your background and how you came to launch an art retail business.
Sasson: “I was born and raised in Israel, in a very small town, a kibbutz, maybe around 700 people. I grew up in Israel and joined the military in Israel, and served for three years. I came to the United States to go to college and after college, I worked with a few ecommerce companies and I saw the power and the effectiveness of that market and the ability of these online companies to sell products and to approach customers from all over the world. And then when I was presented with the product of handmade oil paintings, which were not sold online back then. I thought of online immediately as a different channel for that product.
“My youngest brother worked for a company that dealt in handmade oil paintings and he thought it was an amazing opportunity. He gave me names of a couple different vendors and we called them and ordered a little bit of product, just to take a look. We were so impressed–you can see the brush strokes and you can see all of that. I was amazed and I thought, ‘This has got to sell.’
“I felt that in any business (but mainly online), if you can wow your customers and give them something that’s more than what they wanted or expected, then you’ve got a terrific business. So, when we ship, customers are pleasantly impressed with the product. That creates customer loyalty and all those things that a business needs in order to be successful. Those are the things we saw as a non-traditional online item, but an exciting one.”
PEC: Do actually you stock all of the inventory items that you sell online?
Sasson: “Yes. Everything that’s on our website is stocked in our facility and ships normally the same day or next day. Ninety-five percent goes FedEx ground.”
PEC: Are there any special restrictions or concerns with shipping art?
Sasson: “It’s a light item, but it’s a large item. So, we built a heavy-duty box that supports the product. And then we use bubble wrap to wrap the product three times on every corner, and that protects the product really well.”
PEC: How do you market your site and get the word out?
Sasson: “We invest the majority of our dollars in cost per click marketing, and we work with the big three search engines. Google is where we spend the most, but we use Yahoo! and Bing as well.
“We also do SEO [search engine optimization] and we do very well in SEO. We are number one, for example, in the word oil paintings. Probably our most successful marketing vehicle is our email newsletter. If you look at the return on investment, day in, day out, month in, month out, we get a better return on our newsletter than anything else we do. We send newsletters about three times a week.”
“We also print a catalog. We don’t do mass mailings. We ship catalogs with our orders and for people that are visiting our site and are asking for a catalog. Customers can sit at home and thumb through it. The inventory in the catalog is not equivalent to everything we have on our website, though. It’s a narrower selection because it’s very difficult to print a catalog that size, but the catalog is a very good tool for us.”
PEC: Do you manage all of your marketing activities in-house or do you outsource any of it?
Sasson: “The CPC and the SEO is being outsourced to Exclusive Concepts. We’ve been with them for a long time and it’s been a great relationship.”
PEC: Where do you find your inventory?
Sasson: “Inventory is a challenge in our business. We find everything overseas. We have an office overseas where they do all the purchasing. We work directly with the studio, because ours is a handmade product, and our office overseas ends up quality-controlling the product and collecting the product in our facility overseas, and then putting it together, and shipping it.
“We do about two or three shipments a month of product coming into our facility, and they go through a selection process with the artists. They go from studio to studio, looking for artists that have enough skill to do our product. Then they ask the artist to do a sample. If the sample is adequate then we start small and purchase some from them, and then start increasing the volume with the artist. But, it is an ongoing battle of securing artists and making sure that we get the right quality all the time.
“One additional challenge that we have in inventory is delivery time. It takes about two months, sometimes more, to receive a painting [once we order it]. So we have to anticipate demand two to three months ahead, and anybody that deals in inventory knows that that’s a very difficult task. We built different tools in our supply chain that allow us to anticipate what’s going to happen in the next two to three months based on past performance. But it’s not an exact science.”
PEC: Is your business seasonal?
Sasson: “Yes. The fourth quarter or the holiday season is definitely our best time of year. The rest of the year has its ups and downs.”
PEC: Can you tell us why your business uses the Yahoo! cart?
Sasson: “We actually started out with a different platform early on, but changed to Yahoo! after about a month or two and have stayed with Yahoo! ever since. Yahoo! Merchant Solutions has improved tremendously over the years. It is a solid platform, with very little issues as far as down time. That’s the reason we chose it, so far. In the last couple of years, we’ve had some problems that made us think that maybe we should look at some other platforms, but we have not done that yet. Yahoo! is flexible. It allows us to do almost everything we want and it’s very secure and stable. Those are the main reasons we’re still with Yahoo!.”
PEC: Do you use an order management system?
Sasson: “We use Peachtree accounting system, and it deals with our order management as well. Our supply chain is an independent–basically homegrown. We built it ourselves, and the data could be uploaded from our online sales, from our accounting to our supply chain. They are separate systems. We’ve got our online system, our customer contact management system, and our accounting system; and we’ve got our supply chain. The challenge is they’re all separate. We’re trying to tie them together.
“Mainly, we are addressing everything through a process that is fairly manual. Production gets all the orders in the morning and the orders are completed. They get multiple copies, the labels and such, and that’s what they use to fulfill the orders. We keep the paintings and the frames separate, so from a production standpoint, we need to stretch the paintings, frame the paintings, wrap them, package them, and put on the FedEx label to ship them.”
PEC: What have you done that in hindsight you wished you would have done differently?
Sasson: “In about 2005, we decided that we want to leave the Yahoo! platform and go to an independent cart. We hired a company to develop this great site for us and we invested quite a bit of money in that site. I’ve got a CD in my drawer and that’s what I received from them [the company that developed it]. We even went to court and I lost because I wasn’t prepared. The mistake was being in too much of a hurry to get something done and not doing the right due diligence picking the vendors.”
PEC: Anything else on your mind for our readers today?
Sasson: “The one thing that I would tell any ecommerce business owner is that your number one priority and goal is to take care of the customer. That’s what we’ve believed from day one. Any success that we’ve achieved has been attributed to taking care of the customers and making sure that they are not just ‘kind of okay’ with what they bought, but happy with the art they buy. If they like you, they go on Twitter and Facebook and they are talking good about you, and anybody can find that information. If they don’t like you, they do the opposite. So, treat your customers the way they should be treated. It is really the biggest thing for us.”