Is Shyp Myscalculating on Fine Art?
Ask anyone who’s worked their way up from the bottom of the gallery industry, and they’ll tell you that coordinating fine art packing and shipping is notorious for both its cost and its hassle–especially when the arrangements involve the churning madness of a major art fair. So it makes perfect sense that, as the art and tech sectors continue to tentatively grope each other under a blanket, a Silicon Valley startup might recognize the market inefficiency and try to solve it in an innovative way.
Shyp is doing its damnedest to be that startup. The venture recently announced plans to expand to Miami from its original base in San Francisco and its second zone of influence in New York. And according to Miami.com, Shyp’s explicit strategy is to do so in time for this year's Art Basel Miami Beach, the glitziest and most commercially orgiastic of the US art fairs–not to mention one of the most globally prominent, period.
At a glance, Shyp’s “no sleep til Basel” calculus looks eminently reasonable: huge art fair + huge number of sales + huge number of shipments needing to be sent = huge business opportunity.
But if you know any of the gory details of how fine art packing and shipping actually functions, you’re bound to see all the distressing cracks in the logic structure of that equation. In fact, they become so glaring that it’s giving me minor anxiety sweats to even discuss them now.
Why? Two reasons. Number one, I’m assuming that any Silicon Valley startup worth its series A funding (Shyp closed a $10M round in July per TechCrunch) has run sound analytics on its business plan. So it’s entirely possible that Shyp either mined the data for something I don’t know from my experience in the gallery sector, or they’re using Basel Miami strictly as a piece of publicity flash paper when the move’s real substance is the far less sexy long-term business in a serious international shipping hub–status Miami can claim thanks to geography, an international airport, and Port Miami (not to be confused with Rick Ross’s preposition-happy debut album).
But the second reason I shudder to think about Shyp’s apparent plans for Art Basel Miami is the potential that the startup will be embarrassed on a grand scale, like Carrie White on the prom stage with a vat of pig’s blood poised overhead. From what I’ve been able to glean about how Shyp operates, I just don’t see how the economics or the efficiencies that together form the core of their business plan can ever mesh with the high-stakes particularities of the fine art industry.
To understand my misgivings, we first have to understand how Shyp works. The idea is elegantly simple: Download the app to your mobile device; shoot a photo of the item you want to ship; enter the linear dimensions, weight, destination address, and delivery deadline for the package.
Per its On-Demand Pickup page, Shyp will then “immediately” send one of its “Shyp Heroes” to your location to professionally pack the item “soon after the request is made,” at which point it will be whisked away to whichever of Shyp’s affiliated carriers offers the lowest rate to fit your needs.
The cost for the pickup? A mere five bucks. The cost of the packing? Nada. Zip. Zero. Zilch. The end result is something like a shipping industry hybrid between Uber and Kayak.
Sounds stupendous, right? And considering Shyp is now colonizing its third major American metropolis, it seems fair to conclude (without knowing the numbers) that by and large the customer base agrees.
Frankly, if the economics work out, I think it’s a brilliant idea in a typical consumer context. But when you try to apply the model to a fine art context, the problems start to multiply like sequels to a successful horror movie.
The first vulnerability arises in the way Miami.com describes Shyp’s alleged appeal to Baselites: “This digital service will allow collectors to ship their newly purchased art works home from their smartphone."
The problem is, collectors aren’t responsible for arranging shipping of newly acquired artworks. The galleries or dealers are–at least at any respectable rung of the art sales hierarchy. And any entity able to snag temporary real estate at Art Basel Miami certainly qualifies for that description.
While I can’t confirm this year’s cost because the application process is closed, in 2012 Blouin Art Info surveyed two dozen Basel Miami exhibitors and found the average cost of their booths to be $55,000 for the weekend. That average price excludes all the tandem incidental costs of exhibiting, such as shipping the artwork, installing it, and designing the booth beyond the bare bones minimum. (Basel Miami and other fairs literally have an a la carte menu of options for plussing out exhibitors’ spaces, with per unit costs for extra walls, lighting, furniture, etc.)
As a reference point for the total costs beyond just the booth fee, Blouin gained access to one anonymous exhibitor’s all-in expenses for one weekend of hocking at the "original” (and slightly pricier) Art Basel 2012, i.e. the version of the fair that takes place every summer in its namesake Swiss city. The sum? A pulse-spiking $122,550.
It’s not hard to extrapolate from there about the average price of the artworks being offered for sale at the fair. Suffice it to say that any gallery occupying this lofty tier can count on not only losing the deal, but being paraded around the industry in a clown suit if it asks a blue chip buyer to make her own packing and shipping arrangements for a new acquisition.
Further, it’s not uncommon under certain circumstances for elite gallerists to both coordinate the logistics and to cover the actual costs themselves. It’s a simple but effective ingratiating gesture to a high net worth collector with whom the gallerist wants to do long-term, repeat business.
Shyp’s second fine art vulnerability follows directly from the first: The average buyer and seller involved in a Basel Miami-level transaction are disinclined to worry about deal-hunting when it comes to packing and shipping the object.
In fact, the parties involved frequently and deliberately go in the opposite direction when it comes to incidental costs. The art market, as I’ve argued many times before, is ultimately a presentation-based industry. Gallerists, dealers, and collectors alike are incentivized to opt for the full spare-no-expense, white-glove-only treatment of their assets because doing so elevates the perception of their value. It’s the fine art equivalent of how wine-drinkers judge identical vintages to taste better if they’re ornamented by a higher price tag.
Could you ship a blue chip artwork–like, say, a small framed Ed Ruscha gunpowder drawing worth over $100,000–via FedEx? Sure. I’ve done it, in fact.
But not to a client. To a premium art storage and handling facility at which my boss rented a dedicated viewing room strictly so a collector could see the piece properly lit and installed for probably three minutes. And prior to that, we gave the facility explicit instructions that the first thing their handlers were to do upon receiving the package was to cleave away all shipping labels with an X-Acto knife.
The total cost of that experience landed at a few thousand dollars once receipt at the facility, temporary storage, unpacking, installation, viewing room rental, and repacking for post-viewing storage were factored in. And all of those costs were paid to A) essentially wipe out the evidence that the work had arrived via common carrier, and B) merely create a suitable CHANCE that the collector would want to acquire the piece.
Meanwhile, the single nod to logistical frugality–using FedEx–was OK’d only because our in-house preparator was able to wrap the piece so robustly that the packaging could have safely absorbed a revolver bullet, like one of those life-saving travel Bibles miraculously present in some lucky soul’s breast pocket during an assassination attempt.
My Ruscha anecdote leads us to Shyp’s third fine art vulnerability: the quality of its free packing. No artwork is simple to properly safeguard for the rough and tumble experience of common carrier shipment. If you’ve never dealt with the challenge in a professional context, this instructional video by Saatchi Art provides a good example of the absolute simplest case. And the degree of difficulty ramps quickly from there.
Shyp seems to understand this wrinkle–if not to the extreme degree called for in the fine art realm, then certainly to a more general one. Its “Oversize Pickup” page designates any item over 30 x 30 x 20 inches or 50 lb as a special case that it appears hesitant to make any guarantees about being able to handle. The copy on that page simply states that Shyp will “do [its] best to facilitate” these types of requests.
In addition, the entire special request process has to take place via a separate email inquiry. Shyp also asks that clients making those requests provide a larger window of time before pickup: preferably two to 48 hours. Both of these caveats annihilate key portions of the service’s app-based ease and appeal–in other words, the very traits that act as Shyp’s competitive advantage against standard shippers.
Further complications rise out of the swamp from there. Contemporary art is full of works that would technically qualify as standard pickups by the “oversize” parameters, but are in fact far too delicate or needy to entrust to a non-specialist.
Consider a James Turrell Autonomous Space model, so fragile that it’s not even advisable to clean it with a feather duster. Or an iconic Larry Bell cube of vacuum-sealed glass, which cracks like an egg or explodes like a grenade if punctured. Or an Yves Klein Venus Bleue sculpture, with a pigment coating so anxious to flake off that transporting it without noticeable loss once momentarily reversed my opinion about the existence of God in the universe.
The materials factor is just as crucial as the skill factor. While Shyp claims to use “industry-leading packaging materials and cutting-edge techniques,” there’s a significant difference between standard materials and the archival quality ones expected in a high-end fine art context.
No matter how competently the packing is done, no gallery worth its Artforum ad rate will be cool with just slamming, say, an unframed print into a regular old cardboard portfolio. Instead, they will only release the work from their control after it’s swaddled in a custom-cut envelope of glassine suspended by acid-free paper corners, then sheathed in a layer of poly and secured in an acid free blue board portfolio–BEFORE that museum-quality Rube Goldberg contraption gets tucked into 2-ply brown cardboard and sent on its merry way.
Most importantly, archival materials are dramatically pricier than standard ones. To take just one example, Ashley Distributors here in LA will sell you five sheets of standard 48 x 96 inch, single-wall brown cardboard for $19.50, or $3.90 per sheet. Meanwhile, a single sheet of archival, acid-free 48 x 96 single wall blue board will cost you $26.90, or about 690 percent more. Projecting from that quick and dirty base line, it seems impossible that Shyp could continue offering free packing with archival materials. The numbers just don’t add up.
Perhaps shockingly (or not), I could keep listing incompatibilities between Shyp and the art industry: the reality that newly acquired artworks rarely get shipped immediately to a collector unless the destination is her fine art storage unit (more often it languishes for days or weeks while waiting for an opportune delivery window to open); the frequent need for climate-controlled shipping vehicles or other special requirements; international shipments that regularly involve mail fraud to dodge exorbitant customs duties.
(Note: while that last notion might seem to contradict what I argued earlier about the industry’s high end being unconcerned about packing and shipping costs, in my experience clients and gallerists alike tend to react to taxes differently than safety and security of the asset. And I think everything from tax inversions to off-shore accounts to freeports backs up that statement.)
Is there a segment of the art market where Shyp could serve a need? Yes. It’s just an extremely abbreviated one.
As far as I can tell, it would strictly be for small flat works (paintings, prints, drawings), preferably already framed in standard ways and sold at the extreme low end of the market. In that sense, Shyp is far more likely to score business at the less luminous satellite fairs orbiting the Miami Beach Convention Center during Basel week than the headliner itself.
Again, if the timing of their Miami move is mainly a publicity play, I appreciate the strategy. But if instead Shyp believes it will serve a desperate need in contemporary art during one of its most concentrated blasts of deal-making, then I strongly believe its decision-makers are misjudging the challenges, quirks, and outright absurdities of the art market.
I hope I’m wrong, for both their sake and the sake of the nation’s hog population. Because if I’m not, and Shyp is operating across the entire city of Miami when we find out, that’s a mind-bending flood of pig’s blood gushing down.