What's the biggest ecommerce event in the world?
In this episode of the Art Business Morning Show, Patrick delves into identifying the world's largest e-commerce event, Singles Day, and draws lessons from it. He discusses the significance of running sales regularly, likening the process to the rhythm of a typewriter. Patrick challenges the notion that discounting cheapens art, arguing it is vital for business growth. By examining data from live art shows and customer interactions, he underscores the importance of learning from successful e-commerce practices like Amazon Prime Day, recommending artists to capitalize on these insights and create additional sales opportunities throughout the year.
Podcast Transcribe
Patrick Shanahan: All right, coming up on today's edition of the Art Business Morning Show, I'm asking you the question: What's the biggest e-commerce event in the world? Specifically, a primer on sales, what the event is, where it ranks, and what you can learn from it and bolt into your own marketing operation. Okay, get that down, get my other hair pot in. Hey, what's up? All right, okay, welcome to another edition of Art Business Mornings, the show that will put you on the path to a six-figure year art business. Now, I want to start this thing off doing sort of a quick primer on sales just sort of in general at a macro, and you know, let me set the table on this, as it were, and then I'll circle back to my original question. So, pardon me while I place the cutlery in the drinking vessels, the beverage vessels.
I've been doing this for a while now, and this being sorting out how to best sell art and photography both online and offline, how to grow that corresponding business. You do that for any period of time, and you pick up many, many truths along the way. One truth: This business can be fundamentally thought about as a typewriter. Your art or photography business can fundamentally be thought of as a typewriter. If you map out your entire year of work, it's no different than the head of a typewriter skipping along the page. You're pounding the keys, that falls into a rhythm, and then boom, it moves over, and as you're moving along the page, that is all of your normal yearly activities that you're doing to grow the business. Boom, it hits the end of the page, the end of the year, and the typewriting head comes right back. My contention is what that typing is, is normal marketing sale, normal marketing sale, normal marketing sale. Boom, you hit the edge of it, boom, the typewriter head comes right back to the column, and you just go back at it again. It's like that year in, year out, always has been, always will be. That is just fundamentally how this business works.
When you understand that and you couple that with, in order to get human beings to take action or certainly to increase the chances that they will take action, whether you're selling art or typewriters, for that matter, you need to have discount plus scarcity. The discount, in this case, is the percentage off in the sale, how you go about doing that, and it is also the fact that the sale is going to end soon. What's that? You want to push back on the fact of having the sale? That is fundamental to a business. You've been told that discounting just cheapens your work. Is that what you think? I hear that all the time. Earlier in my career, when I heard this often cited response, I responded differently than I did today. When someone explained that fundamentally this business is about running sales and a person says sales discounting might work, I've been told that cheapens my work, that's just not something that I would do. I've heard this a million times, a million times, and again, early on in my career of doing this, I would have responded differently than I do today. I didn't have the experience that I hadn't talked to enough artists and photographers then. I hadn't run enough sales with my own customers then. I was objective to the fact that those words might just hold merit. I still am in some cases, but most importantly though, I didn't have access to the data that I do today. Behind every opinion now, in contrast to then, lies actual sales figures.
Those figures paint a pretty clear picture. Before, you're new and you're coming up in this industry, and there's a bunch of established people, and they're making claims like, "Don't ever discount, it cheapens the work," and you're like, "Well, look, on the outside, that might be a successful artist." The times have changed now with going on 5800 customers. So somebody says something like that, I immediately go and look in their back end and see what they've sold. I see what they sold for their lifetime, I've seen what they sold in the last month. I quote in religion and politics, "People's beliefs and convictions are in almost every case gotten second hand and without examination from authorities who have not themselves examined the questions at issue, but have taken them second hand from other non-examiners whose opinions about them were not worth a brass farthing," end quote. Now, I'm making one slight alteration to that Mark Twain quote: in religion, politics, and selling art. Early, I alluded to the numbers based on opinions. The numbers behind this opinion, discounting my art cheapens my work, 9 out of 10 times and 99 out of 100 times, if I look at the data behind those positions, behind those opinions, i.e., the person that has that opinion, how much have they sold? They barely even sold a brass farthing or two. I have seen conclusively that the people that hold that opinion near and dear to their heart are the ones that are selling the least amount of art, the least amount of photography.
I often cite the only two brands I am aware of that don't discount, and it's Tiffany's and Louis Vuitton. Don't know of any others. I also cite, especially now that I've been through this the first time, the minute the price of a piece of artwork exceeds ten thousand dollars, i.e., you are starting to target the HNWIs, the high net worth individuals, that is when the real discount starts. High net worth individuals, aside from those in the inheritance business, did not become high net worth individuals as a result of paying retail. As a result of paying retail, they negotiate like crazy, like crazy. So it doesn't matter whether you're on the small scale or you're at the very, very top of the chain or anywhere in between, everyone is discounting. It's not cheapening anyone's art. Whoever came up with that opinion first, I don't know where that generated, but my guess is it was from gallery owners that didn't want artists selling in the first place. That's not cheapening your art, that is nonsense. Back to our typewriter: normal marketing sale, normal marketing sale, normal marketing sale.
That's the case. What are the sales we all know about? The meat and potato sales, right? Mother's Day, Father's Day, Black Friday, Cyber Monday, Christmas. You're in that, you're a nature photographer, and you're having a sale for Earth Day, right? We all know about this. Everybody knows about those suits, everybody has those things on their calendar, right? We're all running those sales, aren't we? Oh, Patrick, it's going to discount, he's going to cheat. Don't even get me started with that nonsense. In the last episode that I recorded on this show, I talked about this notion of the collector list, okay, and I'm really hot on this thing, mega hot on this topic right now. Also in that episode, I talked about this notion of how would you value an art business if I was to buy your art or photography business from you today, how would we come up with some sort of equation that values the business that puts a price on it such that I could buy it from you? And without getting into the weeds on that particular topic, let me tell you where the genesis of all of this is coming from. As a business, Art Storefronts, okay, we are running a ton of live art shows right now for customers. We run the show, afterwards we compile the data, we look at their sales year to date before the show, we look at the number of leads that they have, the number of Facebook followers, the number of Instagram followers, and then what the results were for the live show in terms of sales, total sales value plus AOV, average order value of each of the pieces.
When you have the benefit of a lot of data to compare and contrast, things just get super interesting. Now, I remain hot on the topic of the collector list, but there is another variable, okay, in the art business valuation equation that is super, super interesting, and it's not what you think it is either. No, it's not the sales year to date, those are important. It's not the sales year to date, it's not the leads by which I mean emails on the prospective artist's or photographer's list, it's not the Facebook followers, it's not the Instagram followers. Nope. I have seen the results that truly boggle the mind in those data points. I see such a wide variance between the results of the live art show, their Facebook fans, their Instagram fans, their email list. Sometimes people that don't have a lot are selling way more, sometimes people that have an outrageous amount are not selling much at all, and so that part is just crazy. And you see that enough times and statistically you're like, "What the heck is going on?" Because what am I looking for at the end of the day? I'm looking for an equation that somehow says number of emails on the list times Facebook followers times Instagram fans equals the value of that business, equals what that photographer or artist is going to sell on a yearly basis. What's interesting though, okay, when you look at this whole thing, is the most important metric, okay, that I'm finding in addition to the collector list, how well that thing is taken care of, okay, the most important metric that is going to be predictive of what that particular business is going to do in a year, it's the number of sales run a year. That's it. That's it. How many sales did the artist or photographer in question run in a year? I think that is the first or second most important metric predictive of how much revenue that artist is going to earn in a year, that I can get to, and it's
completely imperfect. It's a multivariate equation, but it is just so, so critical.
Is that really a surprise? Is that a surprise to anyone? It shouldn't be, right? This may be a little bit counter-intuitive, but it shouldn't be. Sales run properly, okay, with all of the tradecraft and knowing how to do it, are massive marketing efforts. They take practice, they take know-how, they take experience. In a word, they're just marketing. What do we know about all artists and photographers? Number one, you suck at marketing. Number two, you don't ever do it consistently, right? You don't ever do it consistently, and you don't do enough of it. So what's awesome about that is there's such a tremendous opportunity in just getting people to run more of them. No matter how good you are, no matter what your subject matter material is, or you're an artist, you're a photographer, where you are in this country or others, if you just bring in more of them, it would make a huge, huge impact. When you study GMV, GMV stands for gross merchandise value, and for a company that hosts artists' and photographers' websites and businesses, GMV is essentially the sum total of everything our customers sell on their website. We study this very closely, but we study this all the time. When you do that, oh boy, does it become clear. We have a 365-day-year calendar. It advises our customers what to do. Shocker here, but I see a huge customer-wide spike in GMV every time we have our customers run a sale. Regular marketing sale, regular marketing sale, regular marketing sale. It's just that important, right? It's just that important.
You're tracking with me. We have our meat and potatoes sales days, great, the ones that we all run. Should we just stick to those though and that's our whole year? Marketing sale, marketing sale, marketing sale? Absolutely not. If we know that the number of sales run is pretty much the first or second most important metric in our business, then it stands to reason we need to get creative on how to get some more sales events going into our yearly effort. We can't rely just on Mother's Day, Father's Day, Earth Day, Black Friday, Cyber Monday. There's not enough of them in there. There's just not enough of them in there. As it turns out, the question we need to be asking ourselves is how do we get more sales events, call them reasons, excuses to run a sale, into our yearly marketing effort. It's probably the most important thing that we could be doing.
So that tees me up nicely, I think, back to my original question. What's the biggest e-commerce event in the world? Does anyone know? I'm going to look in the comments. Does anyone know? I'm not seeing anybody. I don't expect you to get it. No one usually gets it. I think I've asked, like last week, when I gave this presentation to a bunch of our customers on an office hour Zoom session, and no one got it, but one person got close, which is Randy. Shout out to you, Randy. I always have a wide range of responses when I ask, "What's the biggest e-commerce event in the world?" Usually they're like, "Is it Mother's Day? Is it Father's Day? Is it Black Friday? It's Cyber Monday? It's Christmas? New Year's?" Everyone just throws out the holidays. As it turns out, the biggest e-commerce event in the world is not Mother's Day, or Christmas, or Black Friday, or Cyber Monday, or Amazon Prime Day. In fact, it's bigger than all of them combined. Combined. It's called Singles Day. Singles Day. It's on 11/11 every year. Started in China. Apparently, the one, you know, 11/11, the one somehow symbolizes to the Chinese people being single and not adding branches to your family. I don't know. I don't really care to get into the weeds on it. It is a sale opportunity that was created out of whole cloth, invented by some creative Chinese entrepreneurs. That's really what it is at the end of the day. They looked at their yearly calendar and they're like, "Hey, we need an idea to run a huge sale on this particular day. We're out of ideas. Where is it?" And they just added this thing to the calendar. In 2020, they did 75 billion in total e-commerce sales. 75 billion. How does that compare to US sales figures? For contrast, the Black Friday to Cyber Monday stretch of last year, a year in which COVID was raging and e-commerce sales as a percentage of total sales was at its zenith, 28 million. So the Black Friday to Cyber Monday 28 million last year, Singles Day 75 million. Staggering, right? Staggering. Singles Day started, I should also say, in 2009. Normal marketing sale, normal marketing sale. Sales are complicated marketing efforts. They take practice and know-how, and you get better at them and better at them the more you practice. Singles Day 2009 did 0.01 billion in sales. That's what Wikipedia told me anyway. 75 billion in 2020. So regardless of where those numbers actually fall, there's a pretty significant swing on how much better the Chinese have gotten on this.
My third part of this story, what is China notoriously famous for? Stealing American ideas, intellectual property of all kinds, industrial designs, military and aircraft tech, and on and on and on. In this particular case, we actually got one. We got one back on them, which is fantastic. Singles Day launched in 2009. Singles Day ran 2009, 2010, 2011, 2012, 2013. It's like, whoa, this thing is kicking butt. What is going on here? Good old Uncle Jeff Bezos saw what was going on in China. He saw they created a holiday out of whole cloth and turned it into a sales monster. If they could do it, he could do it. I couldn't just imagine the meeting where this was discussed too. Man, China is eating our lunch with this Singles Day strategy. You see the results these guys are getting? What a genius move. I have an idea. Oh yeah, what is it? That's coffee. Wonderful idea. Better still, we have an excuse we can use. So 2015, which as it turns out was the 20th year of Amazon's founding, they're like, perfect, we have an excuse to create our own holiday out of whole cloth. We're going to call it, yeah, what do you want to call it? Let's call it Prime Day. Let's call it Prime Day. Six years later, six years later, what did Prime Day do? In 2015, it started. Last year was the sixth year. Ran and what were the figures on it? I had my notes somewhere. 10.4 billion in Prime Day, and that was last year. I know what you're saying, I know where you're going with this. Great, Patrick, wonderful, why are you telling me all of this? You ever see Jaws? The scene where the town police officer is in the back of the boat, they're looking for the shark, and he's scooping fish guts into the water, lit heater of his mouth, screaming the other guy, "You want to come do this?" That's called chum, right? And it's meant to put blood in the water, which as it turns out is catnip for sharks. It brings them from miles around to get to the surface so that they can be caught. What do we know about boats? I'm all over the place on this one. What do we know about boats? The happiest day in a boat owner's life is the day that he buys the boat and the day that he sells the boat. Those are expensive, generally they break all the time normally, and they require constant maintenance, hence the saying. And one good saying deserves another. Best way to approach boating in general? Have a friend that owns one. Have a friend that owns one.
Let's put it together. You have a friend who we're going to call Uncle Jeff Bezos that has a boat. He is paying for everything, and coming up in a few weeks' time as I record this, June 21st or 20th and 21st, is Prime Day 2021 over at Amazon, or it's June 21st, June 22nd, and he is going to be chumming the waters heavy. The fish are going to be whipped into a frenzy, their trigger fingers on their wallets ready to buy. So what does a smart artist or photographer do? What are you going to do? Your business is like a typewriter, a marketing sale, marketing sale. You need to get better at sales. There are a lot of moving pieces to a sale. Best way to do this? Practice. Not only that, the smartest e-commerce merchants in the world invent holidays out of whole cloth whenever they want to. They know what you now know. Always be looking for creative ways to get additional sales onto your yearly calendar. The revenue your business generates this year is going to be directly proportional to the number of sales you run. How many are you running? You have a huge US sale that's about to come up, and you have the ability to water ski right behind it. So run one. Run one. Announcing Patrick's Prime Day sale. If Jeff Bezos can do it, so can I. Or, Bezos can do it, so can I. You might want to come up with a catchier title than that, but you get the gist. Amazon Prime Day is coming. You have plenty of time to get a sale in the water. Come up with some creative name that dovetails to Prime Day and your individual celebration thereof, and run a sale that you've invented out of whole
cloth that did not exist on your yearly calendar of marketing sale, marketing sale, marketing sale last year. That's going to sound weird on the podcast because I'm doing my little finger gestures, but whatever. On that note, thanks for listening and as always, have a great day. Gotta get back to my stream. Christmas of July, buddy. I like it. Side note, I did have a boat in college. I bought it in the middle of winter, sold it in the middle of summer for a profit. That never, ever, ever happens. Anyway, thanks for listening. You guys have a great day.