Make a lot of money as an International Art Dealer, importing from the Far East
Let us start with the Far East source with the most numerous
sources for low priced products, Hong Kong. Some people
are influenced by a belief that Hong Kong is almost at the end
of the road as a source for cheep goods. Don't listen to the
panic mongers. The reversion to Chinese communist rule is
still some years off. When it does come, do not expect to
see a sudden and total collapse of the free enterprise
system. The Chinese communists know very well which side
their bread is buttered. As is already happening, communism
and capitalism will work hand in hand in the former British
colony.
So if you want to deal with Hong Kong suppliers, do so with
confidence. There is another reason why you can have
confidence when dealing with Chinese businessmen, whether
in Hong Kong, Singapore or mainland China. The vast
majority are honest and have a sense of honour.
Inexperienced mail order dealers who order goods from the
Far East sometimes forget just how long it takes for good to
come by surface route from the other side of the world. So
they sometimes send a nasty letter to Hong Kong
complaining about delay or even worse. Such a letter would
be insulting if sent to a firm in this country. It is doubly
insulting when sent to a place where honour plays such
an important role in business.
You will notice I said the vast majority of Far East
businessmen are honest, not all of them. There are always
one or two rotten apples in every barrel. Happily, it does not
make for a major problem. The Chinese business community
in the Far East are very anxious to protect their reputation for
honest and ethical trading and have methods for policing and
monitoring the activities of their own business communities.
There are various trade associations whose main purpose is
to promote the export potential of their own business
community, but I found them very helpful when checking the
ethical standards of firms which I proposed to consider for
listing in this guide.
This book deals with it's subject with a view to being primarily
of interest to mail order traders. However, I do realise that
those who import, usually on a comparatively small scale,
from the Far East often have other ways of marketing in
addition to, or instead of, operating by mail order. At least
two traders who initially imported original oil paintings from
Hong Kong with a view to operating purely by mail order
found other venues of marketing and now only a small part of
their business is conducted by mail order. Both these
traders have made a great deal of money from their business
activities and as I propose to deal with oil paintings from
Hong Kong, I will provide information on these other outlets
for sale.
The import of paintings from Hong Kong can roughly be
divided into three groups:
- Original oil paintings by Chinese artists, usually in the
western style.
- Reproductions of famous old masters of the western
school.
- Oil paintings, usually portraits of people, based on
photographs supplied by the customers.
Here I would stress that while a great deal of money can be
made from any of these categories, there are certain pitfalls
which the trader inexperienced in importing must avoid and I
will give considerable attention to these.
Firstly, and perhaps most importantly, you cannot
communicate with suppliers in the Far East in the same way
that so many small scale mail order operators do in this
country. You will be dealing with hard-headed businessmen
who are very much profit motivated. They will often send
expensive color catalogues free of charge to those they take
to be bona-fide importers in this country. But these
catalogues and long detailed lists are often expensive to
produce, apart from the postal costs of sending them to the
U.S. So, over the years, Chinese businessmen have become
used to receiving numerous enquiries and requests for trade
catalogues from the West. They have thus developed an
eagle eye, almost an instinct, for spotting the time waster and
the curiosity monger.
The practice of so many home-based mail order dealers in
corresponding with hand-written letters, often with no proper
printed letter heading, or at best, one of those little adhesive
gold labels with the name and address printed on it, or a
rubber stamped heading, all of these are o-u-t OUT. You are
unlikely to get a reply by sending an enquiry or request for a
catalogue in such a cheap, amateurish way. There is a good
chance your letter will go straight into the wastepaper bin
without even being read. Your letters MUST by typed, never
hand-written.
The letters must be sent on properly printed letterheads and
remember that absence of a telephone number on that
letterhead is an instant give-away that you are a small timer
who is not worth bothering about.
If you want to deal with Far East sources you had better give
a professional appearance to your business letters. Do not
ever give the impression you are a part-timer operating from
your kitchen table, even if you are. Many Far East traders do
not mind sending small quantities or samples if, I repeat if,
they think you are a bona-fide businessman or woman who
may order much larger quantities later on. So you either
operate from the start in a professional manner or you forget
the idea of importing from the Far East.
We will start off by dealing with art imports from Hong Kong,
dealing in any or all of the categories I have previously listed.
There are numerous studios in Hong Kong who are eager and
willing to do business with Western businessmen. I
mentioned that there are some pitfalls which need to be
avoided, so I will deal with these next.
One pitfall is that inexperienced beginners do not realise just
how far away the Far East is. Goods coming by sea take a
considerable time to come from the other side of the world.
So it is not really a good idea to take orders and then to send
off the order to Hong Kong. Not, that is, unless you have the
goods sent airmail and that can be expensive and add greatly
to the costs. Far better to build up a stock, however modest,
before you begin to accept orders. Orders coming by
surface mail can take between two and three months,
sometimes longer. Experienced importers may use se freight
instead of surface mail and it is possible thus to cut down on
journey time, but sea freight is really best for larger orders.
In the case of oil paintings, (say) a couple of hundred
canvasses or more.
I will explain the differences between surface mail and sea
freight and also explain certain common abbreviations which
are used in export/import when shipping freight. Let us start
with the abbreviations which one will come across most
frequently when importing. When you receive a quotation
from the Far East, the quotation will either be F.O.B., C.I.F.
OR C & F.
F O B stands for Free On Board
An F.O.B. quotation means the supplier will pay all costs up
until the goods are safely lodged on the ship. So the
quotation includes the actual cost of the goods, plus costs of
transporting the goods to the ship, plus cost of loading onto
the ship.
C I F stands for Cost, Insurance, Freight
This means not only F.O.B. costs but also freight costs up to
the arrival at the unloading port, plus insurance costs for all
the journey from the supplier to when you actually receive the
freight. The goods are usually insured at one hundred and ten
per cent of actual value. You have to make arrangements or
delivery from the loading port to your home or warehouse.
So if the goods are unloaded at (say) Southampton and you
live in Birmingham, you will pay the charges of the freight
forwarder or the Post Office for delivery from Southampton to
Birmingham. C.I.F. quotations are often given if freight is
coming by air. If sent by airmail parcel it will be delivered
free to your home.
C. & F. stands for Cost & Freight
It is the same as C.I.F. except that insurance costs are not
covered. You should arrange insurance with the freight
forwarder. The same goes for F.O.B. as insurance costs are
yours once the goods have been loaded at the point of
departure.
B/L stands for Bill of Loading
This gives information regarding the weight of the goods, the
type of packing and actual number of parcels or crates, the
name of the ship onto which the goods have been loaded and
the ship's date of departure. Whatever you do, do not mislay
that B/L. It is an important document which you will need to
collect your goods. It will also be needed to produce to the
insurance company if a claim has to be made.
I.L.C. stands for Irrevocable Letter of Credit
This will only concern you on larger orders when the value of
the order is getting close to four figures or beyond that point.
It is a simple but safe process which protects both the buyer
and the seller. The buyer pays sufficient into the bank to
cover the cost of the order. The bank then draft a letter of
credit which is sent to the seller (exporter). It is confirmation
from the buyer's bank that they hold the money to pay for the
goods and form a promise to pay that amount of money to
the seller immediately proof is given that the goods have
been dispatched on time and are in accordance with the
description given on the letter of credit. The seller is thus sure
of receiving his money once the goods have been
dispatched, and the buyer is assured of receiving the goods.
But on more modest orders one would not use and I.L.C., but
instead would use a Banker's Draft. Having placed your
order, you will receive a pro-forma invoice from the Far East
supplier with a request that you pay by Banker's Draft. Your
bank will make up the draft and you send it off the supplier.
The bank charge for this varies from bank to bank, but is
usually around $10. If the amount of the order is so small that
it does not justify this charge, you can always send cash. In
Page 5
this case you will get a special envelope from the Post Office
and thus insure the cash at a cost considerably below that of
the Bank Draft fee.
Before leaving the important matter of transportation I would
like to clarify the differences between mail and freight and
ensure there is no confusion. I would also like to clarify the
difference between sea mail and sea freight. Freight usually
only involves orders which are too big to be sent by normal
methods.
SEA MAIL
Cheapest, but with the longest delivery time. You will have
probably heard the song 'Slow Boat to China', but the boat
from Hong Kong to the USA. can seem to take even longer. It
is not just the actual journey time, there are other factors
involved, not least of which is that there are far less ocean
going ships than there used to be. So the frequency of
sailing from a port like Hong Kong is very much reduced.
A few years ago such ports would be crammed with deep sea
vessels, not anymore. Your Hong Kong supplier will take the
parcel(s) to his local Post Office where he will obtain a
Certificate of Posting and he will send you a copy of this.
Unlike the sea freight, you do not know when your goods will
be placed on a ship, nor do you know the date of departure.
Your parcel(s), along with many other parcels, will be put in a
container. Only when the container is full will it go down to
the docks to await a suitable ship. Once on the high seas the
ship might sail directly to the USA, if you are lucky, but it is
much more likely that the ship will call in at other ports to
off-load parcels for that particular country. So surface mail
seldom takes less than eight weeks and that would be
exceptional. Best to estimate at least twelve weeks for the
journey time. There is a surface mail weight limit on parcels
of fifteen kilograms per parcel.
SEA FREIGHT
Strictly for large orders, but it does have certain advantages
over sea mail as you are able to be aware of what is
happening to your order - i.e. actually know the date on which
the ship left port with your order. As you get more used to
dealing with Far East sources, and if the size of your order
justifies the use of sea freight, you can easily obtain
information about shipping movements, such as which ships
are sailing from Hong Kong and when. You can send
instructions to your supplier telling him which ship to put your
order on. You will receive a Bill of Loading (explained earlier)
and from this you will see the date of departure of the ship
carrying your goods.
Airmail is considerably more expensive but so much faster.
Hong Kong has one of the biggest airports in the Far East,
even if it is one of the most hair-raising to land at. With
aircraft constantly leaving for the USA. there is little or no
delay. But you will notice I have refrained from giving airmail
or other postal costs. The reason is that postal rates are
constantly changing (unfortunately always upwards) and any
information given here on postal rates would quickly become
outdated. It is easy enough to find out current postal and
freight rates from Hong Kong.
Now to oil paintings and, for the moment, we will exclude oil
paintings from photographs as this is a subject which
deserve a separate section.
The importation of oil paintings from Hong Kong can be
extremely profitable, but anyone who is inexperienced should
start cautiously and in a small way. There are hundreds of
studios in Hong Kong employing artists of varying degrees of
skill and expertise. Big is not always best in Hong Kong.
One of the best is a very small family studio and they all work
in one room. What Hong Kong sets as standards are not
necessarily the same as those in the West. So when you see
grades given on the literature from Hong Kong, there are
usually three. Very good, good and standard. These grades
are only relevant to western style paintings and not paintings
in the classical Chinese style. I will interpret these gradings
with my own.
HONG KONG GRADING - MY GRADING
VERY GOOD - EXCELLENT TO GOOD
GOOD - GOOD TO MEDIOCRE
STANDARD - MEDIOCRE TO PRETTY AWFUL
These grades refer to original oil paintings. Reproductions of
oil masters by the better studios are generally of a higher
standard. Original paintings not in the western style and which
follow the classical Chinese style are often exceptionally
good.
The reproduction of oil masters is more expensive, but the
profit margin is still very good. It is not usual to buy ready
framed oil paintings from Hong Kong, yet for retail sales it is
essential that paintings are framed. Unless you are an expert
DIY man I do not recommend that you try to make your own
frames. There are plenty of U.S. firms who will supply ready
made frames.
If you are going to sell retail you will need canvas stretchers
which you can buy at almost any art shop. The people in the
art shop will probably show you how to use them if you don't
already know. The canvas is placed on the stretcher prior to
being framed.
Those who have imported oil paintings from Hong Kong have
found several lucrative methods of marketing which do not
involve mail order trading. A favorite method is to hire a hall
or a large room at a hotel and hold an art exhibition. Finding
the right venue and the best methods of advertising such an
event are often part of a trial and error process, but very fat
profits have been made by some of those who have imported
these original paintings from Hong Kong.
One thing I must mention, because at some stage you may
be asked about it. Many of these Hong Kong artists are
incredibly good and are very well known, not only in Hong
Kong but throughout the Far East. Yet when painting for the
Western market they usually use a Western nom-de-plume.
Thus Lin Yong Chuen becomes Harry Brown, or whatever.
There is nothing wrong with this practice. Many creative
people use nom-de-plumes or pen names. The top
professional writers may have several. Peter Head has at
least six to my knowledge. You may get asked why an
original painting by a Hong Kong artist has an Anglo-Saxon
signature. Now you know the reason.
Paintings from photographs is something which is extremely
profitable and the best sources for this work are in Hong
Kong. But past experience has shown that many of those in
this country who operate this service are often unfair to the
Hong Kong studios who undertake this work in that they often
ask them to accept the impossible. If you operate this service
you must insist the customer supplies you with a photograph
which will give the artist a chance to reproduce a good
likeness. I suggest you do not accept Polaroid photos and it
is best to insist that photographs are at least postcard size.
Even then, do not accept if the person is a considerable
distance away from the camera. Remember you are asking
the artist to make a comparatively large painting from a
photograph, so it is no use sending a photograph of
somebody standing at the other side of the garden.
Reject any photograph sent to you which is blurred or out of
focus. It is essential that the facial features of the subject are
clear and distinct. This will enable the artist to produce a
painting which will delight your customer. Asking the artist to
do the impossible will only bring complaints from customers.
Of course, not all the orders for this work are for paintings in
which a person is the subject. A relative of mine used this
Hong Kong service for a painting of her Yorkshire Terrier.
The resultant painting was (in her own words) "absolutely
fabulous", but she did supply a large, good photograph of
the dog. She also supplied a photograph of her very
attractive cottage which resulted in another brilliant painting.
But mention of painting from photographs which are not of
the actual customer brings me to a very important pint, and
this is the thorny matter of copyright. Any person running a
'paintings from photographs' business may run up against
occasional copyright problems. If someone sent you a
postcard photograph for a painting to be made of a
photograph of (say) a Pop Star or other prominent figure, or
perhaps a postcard featuring a famous building, scrutinise
the postcard carefully because most of them are copyright.
Of course there is nothing to stop your customer taking his
own photographs of some familiar building or person and
then there are no copyright problems. But this is something
you need to be very careful about.
Before I close the subject of importing art from Hong Kong,
there are a few further points I must mention, though they
apply to all imports from the Far East. Remember that you
will have to pay import duty. Small samples might get
through Customs with no duty payable, but generally you can
expect to pay between 15% and 20% of the value of the bill or
invoice. Remember to allow for this when working out your
own prices. The other relates to a normal practice of
business courtesy. If you write to the Far East and you are
hoping to get literature sent to you, perhaps even an
expensive color catalogue, then you should at least have
the courtesy to send postage. The international equivalent to
the S.A.E. is the International Reply Coupon, available from
Post Offices. The person you write to can exchange these
I.R.C.s for stamps to answer your enquiry or request for
information. They can exchange each I.R.C. for stamps to
cover a reply at normal surface rate. So if you want an
airmail reply you should send several I.R.C.s.
Earlier, I mentioned using an International Bankers Draft
instead of an I.L.C. when buying small quantities of goods.
To avoid confusion, the drafts are also known as International
Money Orders.
